DCIT 421, MUMBAI vs. DHWAJA COMMODITY SERVICES PRIVATE LIMITED, MUMBAI

PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by Revenue and Cross-Objection therein by assessee are directed against the order of ld. CIT(A) dated 11.02.2026 for A.Y. 2017- 18. The Revenue has raised following ground of appeal: “1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in quashing the reassessment proceedings and setting aside the order u/s. 148A(d) of the Act and consequent notice issued u/s. 148 of the Act on the issue of sanctioning authority u/s. 151 of the act without considering provisions of Taxation and Other law as (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) and CBDT's Instruction No. 1/2022 on 11th May, 2022.

ITA No. 5248/Mum/2026 (AY: 2017-18) CO No. 271/MUM/2026 (AY: 2017-18) Dhwaja Commodity Services Private Limited 2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating that CBDT's Instruction No. 1/2022 dated 11.05.2022 has been issued in accordance with the provisions of the law and in consonance with the Hon'ble Supreme Court's judgment in the case of UOI Vs. Ashish Agarwal.

ON MERITS: II. Addition of Cash credit U/s. 68 of the Act: 2. The Ld. CIT(A) failed to appreciate that the addition made of Rs. 1,75,00,000 u/s. 68 of the Act, being loan taken from Aneri Fincap Ltd had been repaid alongwith interest thereon, through banking channel, therefore merely relying on alleged statements of third parties, the addition cannot be sustained. 3. The Id. CIT(A) failed to appreciate that the assessee had furnished all the primary evidence in support of the loan transaction namely loan confirmation, bank statement, copy of ITR of the party thus the assessee had discharged the onus laid on it by proving identity of party, genuinenesstransaction and credibility of the party, therefore addition cannot be made by relying on material behind the back of the assessee. 4. The learned CIT(A) failed to appreciate that the Assessing Officer relied on third party statement without providing the assessee copy of the statements and material/ documents etc. for rebuttal nor provided opportunity to cross examine the alleged parties.

III. Addition of Rs. 6,51,047/-: 5. The Ld. CIT(A) failed to appreciate that the income of Rs. 6,51,047/-being shares transaction, had already been offered to tax by the Assessee in the Return of Income, therefore the same may be deleted. 6. The Ld. CIT(A) failed to appreciate that the addition of Rs. 6,51,047/-was made in regards to the genuine shares transaction which were purchased and sold through the demat account and consideration for same were

ITA No. 5248/Mum/2026 (AY: 2017-18) CO No. 271/MUM/2026 (AY: 2017-18) Dhwaja Commodity Services Private Limited through banking channel, all the primary evidence were provided to the assessing officer, therefore the addition is not sustainable. 7. The Ld. CIT(A) failed to appreciate that the Assessing Officer treated the share transaction as non genuine on basis of general information without bringing on record any material/ evidence showing assessee involvement in the alleged transaction of accommodation entry. 8. The appellant craves leave to add, amend, omit any of the aforesaid grounds of appeal as the occasion may arise or demand.” 3. Rival submissions of both the parties have been heard and the record perused. At the outset of hearing, the learned Authorised Representative (ld. AR) of the assessee submits that the case of the assessee for AY 2017-18 was reopened by issuing notice under section 148 on 30.06.2021. Admittedly, the case of the assessee was reopened beyond three years from the end of the relevant assessment year. After the decision of the Hon’ble Supreme Court in Ashish Agarwal vs. Union of India (444 ITR 1 SC), a fresh show cause notice under section 148A(b) was issued and, consequently, an order under section 148A(d) was passed on 30.03.2022. A fresh notice under section 148 dated 30.07.2022 was issued. The AO obtained the approval from the Principal Commissioner of Income Tax (Pr CIT) instead of the Principal Commissioner of Income Tax (Pr. CCIT) or Chief Commissioner of Income Tax (CCIT). A copy of the order under section 148A(d) dated 30.07.2022 is placed on record at pages 72-75 of the paper book. Notice under section 148 dated 30.07.2022 is also filed at page 76. The order under section 148A(d) contains the reference to the approval by Principal CIT-4. The approval of Principal CIT-4 is not valid. Therefore, the notice under section 148 is invalid and the consequential action initiated on the basis of such notice is void ab initio. To support his submission, the learned AR relied

ITA No. 5248/Mum/2026 (AY: 2017-18) CO No. 271/MUM/2026 (AY: 2017-18) Dhwaja Commodity Services Private Limited upon the decision of the Hon’ble Bombay High Court in Alag Property Construction (P) Ltd. vs ACIT (2025) 179 taxmann.com 578 (Bombay) and Mumbai Benches of Tribunal in DCIT vs Padmavati Investment ITA No. 7597/M/2025 & CO No. 241/M/2026 dated 30.06.2026. The learned AR of the assessee further submits that once, the learned CIT(A), allowed relief to the assessee on legal issue, he has not adjudicated various other grounds of appeal on merits. The assessee, in its Cross-Objection, has raised grounds against the additions on merits. In case the appeal of the Revenue is dismissed, the CO filed by the assessee will become academic. Otherwise, the grounds raised in Cross Objection deserve adjudication on merit. 4. On the other hand, the learned Senior DR for the Revenue supported the order of the AO. The learned Senior Departmental Representative (ld. DR) submits that they may be allowed to seek a report from the AO as to whether the reasons recorded were approved by the PCIT or Principal CCIT. In short rejoinder, the learned AR of the assessee submits that such fact is clearly discernible from the order under section 148A(d) as well as the notice under section 148 dated 30.07.2022, and no further verification of the fact is required. 5. We have considered the rival submissions of both the parties and have gone through the orders of the lower authorities carefully.On perusal of the record, we find that notice under section 148 was issued on 30.07.2022. The approval of the reasons recorded was obtained from the Principal CIT-4 on 27.07.2022. Admittedly, the case of the assessee for AY 2017-18 was reopened beyond three years from the end of the relevant assessment year.

ITA No. 5248/Mum/2026 (AY: 2017-18) CO No. 271/MUM/2026 (AY: 2017-18) Dhwaja Commodity Services Private Limited Thus, the approval of Principal CIT is not valid to approval under section 151(ii), as it existed during the relevant period. Thus, the notice under section 148 is invalid and the consequential proceedings initiated thereon are void ab initio. Accordingly, we uphold the order of the learned CIT(A). In the result, the appeal of the Revenue is dismissed. Considering the fact that we have dismissed the appeal of the Revenue, therefore, adjudication on the various grounds in Cross Objection raised by the assessee has become academic. 6. In the result the appeal of Revenue is dismissed and C.O. filed by assessee have become infructuous and dismissed as such.

Order was pronounced on 20/08/2026 in open Court. Sd/- Sd/- ARUN KHODPIA PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER

MUMBAI, Dated: 20/08/2026 Biswajit Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file.

By Order

Assistant Registrar ITAT, Mumbai