SANJAY VIRENDRA SUARANA,MUMBAI vs. JAO, ASSESSMENT UNIT

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ITA 8492/MUM/2025Status: DisposedITAT Mumbai31 August 2026AY 2017-20183 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the approval obtained from the Principal Commissioner was not in accordance with section 151(ii). Consequently, the notice u/s 148 and the assessment order were quashed.

What were the facts?

The assessment for AY 2017-18 was reopened by issuing a notice u/s 148. The approval for this notice was obtained from the Principal Commissioner instead of the specified authority as required by section 151(ii) of the Act.

What were the issues?

The primary issue was the validity of the notice issued u/s 148 due to improper approval under section 151(ii). A consequential issue was the validity of the penalty levied u/s 271AAC(1).

Which sections of the Income-tax Act were involved?

Section 148,Section 151,Section 147,Section 144B,Section 69A,Section 271AAC(1),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: HON’BLE NARENDER KUMAR CHOUDHRY & HON’BLE PRABHASH SHANKAR

Pronounced: 31.08.2026

आदेश / ORDER

PER BENCH:

These appeals have been preferred by the Assessee against the order dated 09.10.2025, impugned herein, passed by the National Faceless Appeal Centre/Ld. Commissioner of Income Tax (Appeals) (in short, “Ld. Commissioner”) u/s 250 of the Income Tax Act, 1961 (in short, “the Act”), for the A.Y. 2017-18.

ITA Nos.8492 & 8493/MUM/2025 Sanjay Virendra Saurana 2. Brief facts relevant for adjudication of the quantum appeal are that the assessment for A.Y. 2017-18 was reopened by issuance of notice dated 28.07.2022 u/s 148 of the Act after obtaining prior approval dated 27.07.2022 from the PCIT-1, Mumbai, instead of the specified authority contemplated u/s 151(ii) of the Act. Pursuant thereto, the AO passed the assessment order dated 23.05.2023 u/s 147 r.w.s. 144B of the Act.

3.

We observe that the Hon’ble Jurisdictional High Court in Alag Property Construction (P.) Ltd. v. ACIT [2025] 179 taxmann.com 578 (Bom.)/[2026] 487 ITR 440 (Bom.), while dealing with A.Y. 2017-18, has held that where the notice u/s 148 is issued after expiry of the period contemplated under section 151(i), approval is required from the specified authority u/s 151(ii) and approval obtained from the Principal Commissioner does not satisfy the statutory requirement. The Coordinate Bench in Pramod Tanaji Pate v. ITO, ITA No.4865/Mum/2026, order dated 23.07.2026 has followed the aforesaid binding judgment on identical facts.

4.

Thus, respectfully following the aforesaid binding legal position, we hold that the approval obtained from the PCIT-1, Mumbai was not in accordance with section 151(ii) of the Act. Consequently, the notice dated 28.07.2022 issued u/s 148 and all consequential proceedings, including the assessment order dated 23.05.2023, are quashed. Accordingly, the quantum appeal filed by the Assessee stands allowed.

5.

Coming to the penalty appeal, i.e. ITA No.8493/Mum/2025, the AO levied penalty of Rs.8,26,575/- u/s 271AAC(1) of the Act consequent to the addition of Rs.1,07,00,000/- made u/s 69A of the Act.

ITA Nos.8492 & 8493/MUM/2025 Sanjay Virendra Saurana 6. As we have quashed the notice u/s 148 as well as the consequential assessment order, the very foundation of the penalty does not survive. Consequently, the penalty of Rs.8,26,575/- is deleted and the penalty appeal filed by the Assessee also stands allowed.

7.

In the result, both the appeals filed by the Assessee stand allowed.

Order pronounced in the open court on 31.08.2026.

Sd/- Sd/- PRABHASH SHANKAR NARENDER KUMAR CHOUDHRY ACCOUNTANT MEMBER JUDICIAL MEMBER (Tarun Kushwaha) Sr. Private Secretary

Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The DR Concerned Bench

//True Copy// By Order

Dy/Asstt. Registrar, ITAT, Mumbai.

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