PRAMOD TANAJI PATE,NAVI MUMBAI vs. ITO, WARD 28(2)(1), MUMBAI

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ITA 4865/MUM/2026Status: DisposedITAT Mumbai23 July 2026AY 2017-188 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the approval for issuing the notice under section 148 was obtained from an incorrect authority as more than three years had elapsed from the end of the relevant assessment year. This vitiated the jurisdiction of the Assessing Officer.

What were the facts?

The assessee's case for AY 2017-18 was reopened due to cash deposits of Rs. 11,00,000. The reassessment proceedings were initiated by issuing an order under section 148A(d) and a notice under section 148. The Assessing Officer made an addition of Rs. 11,00,000 under section 69A.

What were the issues?

Whether the reassessment proceedings were valid when the approval for issuing the notice under section 148 was obtained from an authority not specified under section 151 for cases beyond three years from the end of the assessment year.

Which sections of the Income-tax Act were involved?

Section 147,Section 148A,Section 148,Section 144,Section 144B,Section 69A,Section 151,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “H(SMC

For Appellant: Shri Aditya Ramachandran (virtually appeared), Ld. AR
For Respondent: Shri Pravin Salunkhe, Ld. DR
Hearing: 21.07.2026Pronounced: 23.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “H(SMC)” BENCH MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No. 4865/Mum/2026 (Assessment Year: 2017-18) Pramod Tanaji Pate ITO Ward 28(2)(1) Gala No. G-197/198 4th Floor, Tower No. 6, Vs. APMC Fruit Market, Vashi Station Complex, Vashi Navi Mumbai – Vashi, Thane, Navi 400 705 Mumbai-400 703 PAN/GIR No. AAHPP6943L (Applicant) (Respondent) Assessee by Shri Aditya Ramachandran (virtually appeared), Ld. AR Revenue by Shri Pravin Salunkhe, Ld. DR Date of Hearing 21.07.2026 Date of Pronouncement 23.07.2026 आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: This appeal by the assessee is directed against the order dated 26.03.2026 passed by the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as "CIT(A)"], under section 250 of the Income-tax Act, 1961 [hereinafter referred to as "the Act"], for the assessment year 2017-18, arising out of the assessment order

2 ITA No. 4865/Mum/2026 Pramod Tanaji Pate dated 12.05.2023 passed under section 147 read with sections 144 and 144B of the Act.

2.

The assessee has raised the following grounds of appeal before us:

1.

On the facts and circumstances of the case and in law, the learned Assessing Officer has erred in issuing the order under Section 148A(d) and the notice under Section 148 after obtaining the approval of the approval of PCIT- 27, Mumbai which was not the correct ‘specified authority’ as per Section 151 who should have approved it when three years have already elapsed from the end of the relevant assessment year. 2. On the facts and circumstances of the case and in law, the ITO, Ward 28(2)(1), Mumbai has erred in passing the order u/s. 148A(d) and also issuing the notice u/s. 148 without appreciating that he was not having the jurisdiction for the same in view of Section 151A and the notification issued thereunder notifying e-Assessment of Income Escaping Assessment Scheme, 2022 and, thereby, rendering the said order and the notice as well as the entire assessment proceeding as null and void. 3. On the facts and circumstances of the case and in law, notice issued u/s 148 dated 22/07/2022 is required to be declared as null and void as it suffers from the jurisdictional defect of not complying with the requirements of Circular No. 19 of 2019 dated 14th August, 2019 issued by the CBDT. 4. On the facts and circumstances of the case and in law, the CIT(A) has erred in confirming the addition of the cash deposits amounting to Rs.11,00,000 under Section 69A. The Appellant craves leave to add, alter, amend, vary and / or withdraw any or all the above grounds of appeal. Facts of the Case

3.

The assessee filed his return of income for A.Y. 2017-18 on 19.12.2017 declaring total income of Rs. 5,55,430/-. The case was reopened in connection with cash deposits aggregating to Rs.

3 ITA No. 4865/Mum/2026 Pramod Tanaji Pate 11,00,000/- made during the demonetisation period. An order under section 148A(d) of the Act was passed on 22.07.2022 and notice under section 148 was thereafter issued. The Assessing Officer, vide assessment order dated 12.05.2023 passed under section 147 read with sections 144 and 144B of the Act, treated the cash deposits of Rs. 11,00,000/- as unexplained money under section 69A of the Act and determined the total income at Rs. 16,55,430/-. 4. Aggrieved, the assessee preferred an appeal before the CIT(A). The CIT(A), vide order dated 26.03.2026 passed under section 250 of the Act, confirmed the addition of Rs. 11,00,000/- and dismissed the appeal of the assessee. The assessee is, therefore, in appeal before us. 5. During the course of hearing before us, the learned Authorised Representative (AR) submitted that the order under section 148A(d) of the Act was passed on 22.07.2022 and subsequently notice under section 148 of the Act was issued on 22.07.2022. The learned AR submitted that the approval for issuance of notice under section 148 had not been obtained from the appropriate specified authority as required under section 151 of the Act and, therefore, the notice issued under section 148 and the reassessment proceedings consequent thereto were bad in law. 6. The learned AR placed reliance on the judgment of the Hon'ble jurisdictional Bombay High Court in Alag Property

4 ITA No. 4865/Mum/2026 Pramod Tanaji Pate Construction (P.) Ltd. v. ACIT [2025] 179 taxmann.com 578 (Bom.)/[2026] 487 ITR 440 (Bom.), and submitted that the issue stood squarely covered in favour of the assessee. 7. Per contra, the learned Departmental Representative relied upon the orders of the lower authorities. 8. We have considered the rival submissions and perused the material placed on record. Ground Nos. 1 to 3 raised by the assessee are jurisdictional in nature. Since the challenge raised in Ground No. 1 goes to the very root of the assumption of jurisdiction under sections 148A(d), 148 and 151 of the Act, we deem it appropriate to adjudicate the same first. 9. The assessment year under consideration is assessment year 2017-18. The order under section 148A(d) was passed on 22.07.2022 and the consequential notice under section 148 was issued on 22.07.2022. The specific case of the assessee, as raised in Ground No. 1 and reiterated by the learned AR before us, is that the approval was obtained from PCIT-27, Mumbai, whereas more than three years had elapsed from the end of the relevant assessment year and, therefore, approval ought to have been obtained from the specified authority contemplated under section 151(ii) of the Act. The learned DR has relied upon the orders of the lower authorities and no material has been brought before us to controvert this specific factual assertion of the assessee. 10. We find that the controversy is directly covered by the judgment of the Hon'ble jurisdictional Bombay High Court in

5 ITA No. 4865/Mum/2026 Pramod Tanaji Pate Alag Property Construction (P.) Ltd. v. ACIT (supra). The said decision also concerned assessment year 2017-18 and the issue of approval obtained from the Principal Commissioner after expiry of three years from the end of the relevant assessment year.

11.

For ready reference, the relevant findings of the Hon'ble Bombay High Court in paras 10 to 13 are reproduced verbatim as under:

“10. On perusal of the order dated 18.08.2022, passed under Section 148A(d) of the Act we find that the aforesaid order was passed after taking approval from Principal Commissioner of Income Tax (Respondent No.2). Since the aforesaid order was passed, as well as the notice under section 148 was issued, after the expiry of three years from the end of A.Y. 2017-18, as per the substituted provisions of re-assessment, the authority specified under Section 151(ii) of the Act (i.e. Principal Chief Commissioner or Chief Commissioner) was required to grant approval. Accordingly, we conclude that in the present case, the approval has been obtained from the authority specified under Section 151(i) of the new regime instead of the authority specified under Section 151(ii) of the new regime. 11. The Hon'ble Supreme Court in the above case has drawn an illustration in para 78 of its order in the context of A.Y. 2017-18 (which is also the relevant Assessment year in the present Writ Petition) wherein it is categorically held that the authority specified under section 151(i) can accord sanction only upto 30.06.2021. This illustration makes it absolutely clear that when the period of three years from end of relevant Assessment Year expired between 20.03.2020 and 31.03.2021, the extension by virtue of TOLA was upto 30.06.2021 and not beyond. Thus, it can be said that the period of three years from the end of the relevant Assessment Year (in the present case A.Y. 2017-18) expired on 30.06.2021, whereas Respondent No.1, despite passing order under section 148A(d) on 18.08.2022, and issuing notice under section 148 on 23.08.2022 [in respect of Assessment Year 2017-18], has obtained approval of Respondent No.2 who is not the authority as prescribed under section 151(ii).

6 ITA No. 4865/Mum/2026 Pramod Tanaji Pate 12. Non-compliance by Respondent No.1 with the provisions contained in Section 148A(d) read with Section 151(ii) vitiates the jurisdiction of Respondent No.1 to issue a notice under Section 148 of the Act. 13. We are clearly of the view that the present matter stands covered by the decision of Hon'ble Supreme Court in the case of Rajeev Bansal (supra) and we are bound by it. Accordingly, we hold that the order dated 18.08.2022 passed under Section 148A(d) of the Act and the consequential notice issued under section 148 dated and 23.08.2022 are bad in law, and hence, are required to be quashed and set aside.” 12. The Hon'ble High Court thus held in unequivocal terms that where, after expiry of three years from the end of assessment year 2017-18, approval was obtained from the Principal Commissioner, who was the authority specified under section 151(i), instead of the higher authority specified under section 151(ii), such non-compliance went to the root of the jurisdiction of the Assessing Officer and vitiated the notice issued under section 148.

13.

In the present case also, the assessment year is 2017-18. The order under section 148A(d) as well as the notice under section 148 were issued on 22.07.2022, i.e. beyond the period of three years from the end of the relevant assessment year. The assessee's specific contention is that approval was obtained from PCIT-27, Mumbai. Thus, following the binding decision of the Hon'ble jurisdictional Bombay High Court in Alag Property Construction (P.) Ltd. (supra), we hold that the approval obtained from the Principal Commissioner did not satisfy the requirement of section 151(ii) of the Act. Consequently, the assumption of jurisdiction by the Assessing Officer was vitiated.

7 ITA No. 4865/Mum/2026 Pramod Tanaji Pate We, therefore, hold that the order dated 22.07.2022 passed under section 148A(d) of the Act and the consequential notice dated 22.07.2022 issued under section 148 of the Act are bad in law and are liable to be quashed. Consequently, the assessment order dated 12.05.2023 passed under section 147 read with sections 144 and 144B of the Act and all proceedings emanating therefrom cannot survive and are accordingly quashed.

14.

In view of our decision allowing the jurisdictional ground and quashing the reassessment proceedings, the other jurisdictional grounds raised in Ground Nos. 2 and 3 and the ground on merits relating to the addition of Rs. 11,00,000/- under section 69A of the Act in Ground No. 4 have become academic and do not require adjudication. We, therefore, leave the same open.

15.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 23.07.2026.

Sd/- Sd/- (NARENDER KUMAR CHOUDHRY) (MAKARAND VASANT MAHADEOKAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 23/07/2026 Dhananjay, Sr.PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. संबंधधत आयकर आयुक्त / The CIT(A) 3. आयकर आयुक्त(अपील) / Concerned CIT 4. धिभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, मुम्बई/ DR, ITAT, Mumbai 5.

8 ITA No. 4865/Mum/2026 Pramod Tanaji Pate गार्ड फाईल / Guard file. 6. आदेशानुसार/BY ORDER, सत्याधपत प्रधत //True Copy// 1. उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai

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