HITESHKUMAR POPTABHAI BORAD,SURAT vs. ACIT, CENTRAL CIRCLE-2, SURAT

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ITA 1262/SRT/2025Status: DisposedITAT Surat23 July 2026AY 2018-1921 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reassessment proceedings were void ab initio because the approval for issuing the notice under Section 148 was obtained from the incorrect authority, violating Section 151(ii) of the Act. The amendment to Section 151 by the Finance Act, 2023, was held to be prospective.

What were the facts?

The assessee's return for AY 2018-19 was reopened based on information of unexplained cash of Rs. 97,00,000/-. The Assessing Officer issued a notice under Section 148, and upon no reply, passed an ex-parte reassessment order. The CIT(A) dismissed the assessee's appeal.

What were the issues?

The primary issue was the validity of the reassessment proceedings due to improper approval obtained under Section 151 for issuing the notice under Section 148, especially when more than three years had elapsed from the end of the assessment year.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 151,Section 69A,Section 115BBE,Section 270A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH (DB

Before: Shri T.R. Sentil Kumar & Shri Ratnesh Nandan Sahay

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH (DB), SURAT (PHYSICAL HEARING) Before: Shri T.R. Sentil Kumar, Judicial Member And Shri Ratnesh Nandan Sahay, Accountant Member ITA No: 1262/SRT/2025 Assessment Year: 2018-19

Hiteshkumar Poptabhai Borad The Assistant 201, Rushabh Appt, Green Commissioner of Park Soc, L. H. Road, Surat- Vs Income Tax, 395001. Central Circle-2, Aayakar Bhawan, Majura Gate, PAN: ALJPB2256P Surat-395001. (Appellant) (Respondent) Assessee Represented: Shri P.M. Jagasheth, C.A. Revenue Represented: Ms. Neerja Sharma, Sr. D.R. Date of hearing : 05-05-2026 Date of pronouncement : 23-07-2026 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-

This appeal is filed by the assessee as against the appellate order dated 18.11.2025 passed by the Commissioner of Income Tax (Appeals)-4, Surat (in short referred to as “CIT(A)”), arising out of the reassessment order passed under section 147 r.w.s. 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2018-19.

2.

Brief facts of the case are, the assessee is an individual and filed his original return of income for Assessment Year 2018-19 on

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14.07.2018 declaring total income Rs. 3,49,530/-. The return was reopened on the specific information, that the assessee received unexplained cash of Rs. 97,00,000/- during the year under consideration. Therefore, the Assessing Officer issued a notice u/s 148 of the Act on 12.04.2022. The assessee did not file any reply to the reopening notice, which was resulted in passing ex-parte re- assessment order assessing the total income at Rs.1,00,49,530/- by making additions of Rs. 97,00,000/- on account of unexplained money u/s 69A of the Act.

3.

Aggrieved against the reassessment assessment order, the assessee filed appeal before ld. CIT(A) challenging the assumption of jurisdiction and merits of the case. Both the issues were considered by the ld. CIT(A) and decided against the assessee by dismissing the appeal.

4.

Aggrieved against the appellate order, the assessee is in appeal before us, raising the following Grounds of Appeal:-

“1. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in reopening the assessment u/s.147 of the act and issuing notice u/s.148 of the Income Tax Act, 1961.

2.

On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition without any verification of the facts and made baseless addition, hence it is unwarranted and required to be deleted.

3.

On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals)

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has erred in confirming the action of the Assessing Officer erred in making addition of Rs.97,00,000/- on account of alleged cash received remained unexplained treated as alleged unexplained money u/s.69A of the Income Tax Act and also taxed as per provision of section 115BBE of the 1961.

4.

On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has not offered adequate opportunities to hear the case and passed ex- parte order and hence the case may please be set aside and restored back to the CIT(A) or AO.

5.

On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in initiating penalty proceedings u/s. 270A of the Income Tax Act, 1961.

6.

It is therefore prayed that the above addition may please be deleted as learned members of the tribunal may deem it proper.

7.

Appellant craves leave to add, alter or delete any ground(s) either before or in the course of the hearing of the appeal.”

4.1 Additional Grounds of Appeal raised by the assessee reads as follows:-

On the facts and circumstances of the case, ld. CIT(A) erred in not considering the validity of reassessment proceedings on the ground that more than 3 years had elapsed from the end Assessment Year 2018-19, and therefore, the approval for issuance of notice u/s.148 as well as the order passed u/s.148A(d) of the Act ought to have been obtained from the Competent Authority as prescribed u/s.151(ii) of the Act.

5.

Ld. Counsel Sh. P.M. Jagasheth, CA appearing for the assessee by way of Additional Ground raised that the reassessment proceedings initiated for the Assessment Year 2018-19 are entirely void-ab-initio

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and completely lacking valid jurisdictional sanction u/s 151(ii) of the Act and relied upon the list of dates and events as follows:-

Dates Events 31.03.2019 End of the Relevant Assessment Year 2018-19 31.03.2022 Absolute expiry of three years from the end of the A.Υ. 2018-19 25.03.2022 Issuance of Show Cause Notice u/s.148A(b) 05.04.2022 Appellant's Response to the Notice 12.04.2022 Passing of the Order u/s.148A(d) of the Act 12.04.2022 Issuance of the Jurisdictional notice u/s.148 of the Act

5.1 Ld. Counsel submitted that the statutory sanction for passing the order u/s 148A(d) and issuing the notice u/s 148 of the Act was obtained from the Principal Commissioner of Income Tax. Ld. Counsel submitted that the provisions of section 151 of the Act as they stood on 01.04.2022 alone are applicable for determining the validity of the approval obtained for issuance of notice u/s 148 and passing of order u/s 148A(d) of the Act. The amendment brought by the Finance Act, 2023 inserting the proviso to section 151 of the Act has been specifically made effective from 01.04.2023. Therefore, the legality of proceedings initiated in April, 2022 has to be tested only on the basis of the unamended provisions of the Act.

5.2 Further, this issue is no longer res-integra and various Courts and Tribunals have consistently held that for notices/orders issued in April, 2022 relating to Assessment Year 2018-19, where more than

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three years had elapsed from the end of the assessment year, approval was required from the authority specified u/s 151(ii) of the Act, namely PCCIT/CCIT, and not from PCIT/CIT. Thus, the subsequent proviso inserted by Finance Act 2023 has to be applied as prospectively and relied upon the following judicial decisions:

 Vodafone Idea Ltd. Vs. DCIT (Bombay High Court, W.P. No. 2768 of 2022, order dated 06.02.2024  Agnello Oswin Dias vs. ACIT [2024] 161 taxmann.com 16 (Bom.)  Shabbir Taheri vs. ITO, ITA No. 1574/Mum/2025 dated 15.10.2025  Shailesh Asalraj Jain vs. PCIT [2026] 184 taxmann.com 745 (Mumbai Tribunal)  Davos International Fund vs. ACIT, ITA No. 1190/Mum/2024 dated 13.01.2025  ACIT vs. Asha P. Kedia [2025] 174 taxmann.com 99 (Mumbai Tribunal)  Meganapuram Primary Agricultural Co-operative Credit Society vs. PCIT, ITA No. 895/Chny/2025 dated 19.09.2025  Vasanthi Raghunathan vs. ITO, ITA No. 2896/Chny/2025  Salem and Namakkal District Police Cooperative T & C Society Ltd. Vs. ITO, ITA No. 367/Chny/2026 dated 23.03.2026.

5.3 Ld. Counsel further submitted that the aforesaid decisions specifically deal with the amendment made to section 151 by the Finance Act, 2023 and categorically hold that the proviso inserted therein operates prospectively from 01.04.2023 and cannot be pressed into service to validate notices issued and approvals granted in April, 2022. These decisions therefore completely negate the Revenue's

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contention that the amendment is merely clarificatory or retrospective in operation.

5.4. further the above authorities, particularly the judgments of the Hon'ble Bombay High Court, are directly on the issue and constitute binding precedents. The Department's argument that the proviso inserted by Finance Act, 2023 should be treated as retrospective has already been rejected by the Bombay High Court and by several decisions of Co-ordinate Benches of the Tribunal.

5.5 In the present case, notice u/s. 148 and order under section 148A(d) were issued on 12.04.2022, admittedly beyond three years from the end of AY 2018-19. Therefore, in terms of section 151 (ii) as it existed on the relevant date, approval could only have been granted by PCCIT/CCIT. Since approval was admittedly obtained from PCIT/CIT, the jurisdictional requirement prescribed by the statute was not fulfilled and the entire reassessment proceedings are void ab initio. It is therefore respectfully prayed that the additional ground raised by the appellant be allowed and the reassessment proceedings be quashed as being without valid sanction u/s. 151 of the Act.

6.

Per contra, ld. Sr. DR appearing for the Revenue heavily relied upon the memorandum explaining the provisions in the Finance Bill Act, 2023 to contend that the amendments are clarificatory in nature and therefore, applicable retrospectively. Thus, the sanction obtained from PCIT is well within the provisions of law. The ld. DR relied upon the following cases laws:-  CIT vs. Gold Coin Health Food P Ltd.[2008] 172 Taxmann 386 (SC)  CIT vs. Poddar Cement Pvt. Ltd. & Others (1997) 226 ITR 625 (SC)

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 ITO vs. Vikram Sujit kumar Bhatia  Giriraj Commercial (P.) Ltd. Vs. Union of India [2024] 169 taxmann.com 168 (High Court of Calcutta) 7. Heard rival contentions and both the parties were directed to file their respective Written Submissions, which are taken on record. Since the additional ground raises a pure question of law arising from the material already available on record and does not require investigation into fresh facts, the same is admitted in view of the decisions of the Hon'ble Supreme Court in National Thermal Power Co. Ltd. v. CIT (229 ITR 383) and Jute Corporation of India Ltd. v. CIT (187 ITR 688). On careful consideration of the materials on record and plain reading of the Notes on Clauses of the the Finance Bill, 2023, states in clear terms that the amendment inserting the Proviso to Section 151 will take effect from the 1st day of April, 2023. The Memorandum itself specifically states that "these amendments will take effect from 1st April, 2023". For better understanding explaining the provisions in the Finance Bill 2023 is extracted as follows:-

“Clause 71 of the Bill seeks to amend the section 151 of the Income tax Act relating to sanction for issue of notice. It is proposed to amend clause (ii) of the said to provide that the specified authority for the purposes of section 148 and section 148A shall be the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year. It is further proposed to insert a proviso in the said section so as to provide that the period of three years for the purposes of clause (i) shall be computed after taking into account the period of limitation as excluded by the third or fourth or fifth provisions or extended by the sixth proviso to sub-section (1) of section 149. These amendments will take effect from 1st April, 2023. “

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7.1. When the legislature deliberately marks a prospective operational baseline, the Tax Administration cannot rewrite that timeline under the guise of "curative" intent. It is a settled proposition of law that where the language of the statute is clear and the Legislature has specifically provided the date from which an amendment shall operate, the same cannot be treated as retrospective merely because it is described as clarificatory. Further the requirement of obtaining sanction from the specified authority u/s.151 is not an empty procedural formality but a statutory condition precedent to the valid assumption of jurisdiction under section 147. Any deviation from the authority prescribed by Parliament strikes at the very root of jurisdiction.

7.2. Further, critical reading of the Finance Act, 2023, reveals that the Legislature applied retrospective effects to specific provisions where it was deemed necessary namely:

 Section 69 of the Finance Act, 2023: Inserted a proviso to Section 135A, explicitly applicable from 01.04.2022.  Section 70 of the Finance Act, 2023: Amended Section 140A(4), explicitly applicable from 01.04.2022.  Section 100 of the Finance Act, 2023: Substituted Clause (iv) in sub-section 9, explicitly applicable from 01.02.2021.  Section 121 of the Finance Act, 2023: Inserted a proviso to Section 274, explicitly applicable from 01.04.2022.

The fact that the Legislature selectively backdated multiple provisions within the very same enactment, while keeping the Section 151 Proviso

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mapped strictly to 01.04.2023, which clearly confirms that the omission of a retrospective tag was deliberate.

7.3. Therefore, in our considered view, sanction u/s. 151 of the Act, is not a fluid procedural step; it is a jurisdictional mandate designed to protect taxpayers from groundless or mechanical reassessment actions. The Hon'ble Supreme Court has consistently held in CIT -Vs- Vatika Township Pvt Ltd. and Controller of Estate Duty -Vs- M.A. Merchant that any amendment affecting a substantive right or creating a new jurisdictional reach is presumed to apply prospectively. Thus, an invalid sanction executed in 2022 cannot be retroactively validated by an amendment introduced a year later in 2023.

8.

The Revenue seeks support from the Judgements of Gold Coin Health Food (P.) Ltd. and Vikram Sujit Kumar Bhatia [cited supra] to argue for a retrospective interpretation. These cases are fundamentally different from the facts of the present issue. In our considered view, in Gold Coin Health Food, the amendment was purely explanatory, clarifying a penalty framework for loss-bearing returns, where the original legislative intent was already clear. It did not validate an action taken by an incorrect tier of authority. In Vikram Sujitkumar Bhatia, the amendment updated search assessment definitions ("pertains or pertain to") to prevent evasion windows created by semantic gaps. Thus, neither of the above cases supports the proposition that a higher constitutional safety standard, such as a jurisdictional approval chain u/s. 151 of the Act, can be rewritten or diluted after an invalid action has occurred.

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9.

Co-ordinate Bench of the Mumbai Tribunal considered in detail all the provisions of the Act and various Judgements of High Courts and various Bench decisions of the Tribunal, in the case of M/s.Shabbir Taheri -Vs- ITO, in ITA No.1574/Mum/2025 dated 15/10/2025 held as follows:-

“… 2. Since my learned brother Accountant Member has already discussed the facts, there is no need to repeat them. Suffice to say, the Assessing Officer (AO), while assuming jurisdiction u/s. 147 of the Act to reopen the assessment for Assessment Year 2018-19 has issued show cause notice u/s. 148A(b) of the Act on 20.03.2022. In response to the said show cause notice, the assessee furnished its reply on 30.03.2022. After considering the reply of the assessee, the AO passed an order u/s.148A(d) of the Act on 06.04.2022. Simultaneously, on the very same day, the AO issued the notice u/s. 148 of the Act, after seeking approval of CIT(IT), Mumbai-1. The aforesaid factual position remains uncontroverted. The assessee has pleaded before us that after expiry of three years from the end of the assessment year under dispute, as per Section 151(ii) of the Act, the specified authority, who can grant sanction/approval u/s. 148A and 148 of the Act is the Principal Chief Commissioner of Income Tax (PCCIT) or Principal Director General or Chief Commissioner or Director General. It is the say of the assessee that since approval/sanction in the instant case has been obtained from CIT it is invalid. Hence, all actions taken in pursuance to such approval would also be invalid. In support of such contention, learned counsel has relied upon a number of judicial precedents referred to in the order proposed by my learned brother Accountant Member. 3. Learned Departmental Representative (DR) relied upon a decision of the Coordinate bench in case of Albert Joseph Rozario vs. ITO, Mumbai, ITA No. 1168/Mum/2025 order dated 22.07.2025, wherein, a view has been taken that the limitation prescribed u/s. 149(1) of the Act for issuance of notice u/s. 148 of the Act would also apply to sanction for issue of notice has provided u/s. 151 of the Act. As per the reasoning of the Coordinate Bench in the aforesaid decision, applying the provisions contained in 3rd and 4th proviso to Section 149(1) of the Act as it stood then, the three year period in terms with Section 151(i) of the Act is to be determined after excluding the time allowed to the

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assessee as per show cause notice issued u/s.148(b) of the Act and further additional time of seven days thereafter to the AO to issue the notice u/s. 148 of the Act. For the sake of completeness, we deem it appropriate to deal with this decision of the coordinate Bench. 4. At this stage, it is necessary to examine the provisions contained u/s.149 of the Act. Prior to its substitution by Finance Act, 2021 effective from 01.04.2021, sub section (1) of Section 149 of the Act provided that no notice u/s.148 shall be issued for the relevant assessment year after expiry of four years from the end of the relevant assessment year. However, it further provided that in a case where the quantum of escaped income is Rs.1,00,000/- or more, instead of four years, six years limitation would be available. It further provided that if the escaped income relates to any asset located outside India, the limitation would get extended to sixteen years. The aforesaid provision was substituted by Finance Act 2021 w.e.f. 01.04.2021. As per section 149(1) of the Act under the new regime, no notice u/s. 148 of the Act shall be issued for the relevant assessment year if three years have elapsed for the relevant assessment year. However, in a case where the income escaping assessment is Rs.50,00,000/- or more then the limitation for issuance of notice u/s. 148 of the Act will get extended to ten years. The third proviso to Section 149(1) of the Act provided that for the purpose of computing the period of limitation, the time or extended time allowed to the assessee as per show cause notice issued u/s. 148A(b) of the Act or the period during which proceeding u/s. 148 is stayed by an order of injunction of any court shall be excluded. The fourth proviso to Section 149(1) of the Act provided that immediately after exclusion of period referred in third proviso, if the period of limitation available to the AO for passing an order under Section 148A(d) of the Act is less than seven days, such remaining period shall be extended to seven days and accordingly the period of limitation for issuance of notice u/s. 148 shall be deemed to have been extended. 5. Interestingly, sub section (2) to Section 149 of the Act provides that the limitation prescribed under sub section (1) of Section 149 of the Act for issuance of notice shall be subject to the provisions of Section 151 of the Act. The use of word ‘shall’ in sub section (2) of Section 149 of the Act makes it clear that the limitation prescribed u/s.149 of the Act for issuance of notice u/s.148 of the Act is subject to the timeline prescribed u/s.151 of the Act. In other words, the

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limitation prescribed u/s. 149(1) of the Act would not override the timeline prescribed for grant of approval by the specified authority u/s. 151 of the Act. Section 151 of the Act as it stood after substitution of earlier Section 151 of the Act by Finance Act, 2021 effective from 01.04.2021 and before its amendment by Finance Act, 2023 w.e.f. 01.04.2023 reads as under: “151. Specified authority for the purposes of section 148 and section 148A shall be,— (i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year; (ii) Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year:” 6. As could be seen from the provision contained u/s. 151 of the Act reproduced above, as per clause (i), in a case where action u/s. 148 and Section 148A of the Act is initiated before expiry of three years from the end of the relevant assessment year, the specified authority who can grant sanction/approval is the Principal Commissioner or Principal Director General or Commissioner or Director of Income Tax. However, as per clause (ii), if more than three years have elapsed from the end of the relevant assessment year, the specified authority, who can grant sanction is the Principal Chief Commissioner or Principal Director General or where no Principal Chief Commissioner or Principal Director General is available then Chief Commissioner or Director General of Income Tax. It is noteworthy, akin to third and fourth provisos, which were incorporated in Section 149(1) of the Act under the new regime effective from 01.04.2021, no corresponding amendment was made to Section 151 of the Act. By virtue of Finance Act, 2023 effective from 01.04.2023, the following proviso was added to Section 151 of the Act. “Provided that the period of three years for the purposes of Clause (i) shall be computed after taking into account, the period of limitation as excluded by the third, fourth and fifth provisos or extended by the sixth proviso to sub section (1) of Section 149 of the Act.”

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7.

Thus, as per Section 151 of the Act as it stood prior to its amendment by Finance Act, 2023, the limitation prescribed under Clause (i) of Section 151 of the Act was prior to expiry of three years from the end of the relevant assessment year and without benefit of further extension in terms with third, fourth or fifth proviso under sub section (1) of Section 149 of the Act. 8. Therefore, keeping in view the provision contained under sub section (2) of Section 149 of the Act, which makes the limitation provided u/s. 149(1) of the Act subject to the timeline provided u/s. 151 of the Act, the limitation provided u/s.149(1) of the Act including the provisos cannot get imported for the purpose of extending the limitation u/s. 151(i) of the Act prior to the amendment of section 151 of the Act by Finance Act, 2023. That being the case, the timeline for sanction by specified authority fixed u/s. 151 of the Act has to be scrupulously followed. 9. At this stage, it is to be noted that the Hon’ble Jurisdictional High Court in the decisions referred to by my learned brother Accountant Member in his order has specifically held that the proviso inserted to Section 151 of the Act by Finance Act, 2023, effective from 01.04.2023 will not apply prior to its effective date. Pertinently the line of argument taken by the Department in the case of Albert Joseph Rozario vs. ITO (Supra) was not for the first time. Identical argument was advanced by the Department in following two cases dealt by the Coordinate Benches: (i). Davos International Fund Vs. ACIT, Mumbai, ITA No. 1190/Mum/2024 dated 13.01.2025. (ii). ACIT vs. Asha P. Kedia [2025] 174 taxmann.com 99 (Mumbai-Trib.) 10. While dealing with the contentions of learned Departmental Representative in case of Davos International Fund (Supra), the Coordinate Bench has held as under: “7. We heard the parties and perused the material on record. In assessee's case the 148A notice for AY 2017-18 was issued on 12.03.2022 and the order disposing the objections of the assessee was passed on 04.04.2022 under section 148A(d) of the Act. The AO issued notice under section 148 dated 04.04.2022. On perusal of the order

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under section 148A(d) of the Act and 148 (page 42 to 46 and 47 of PB) we notice that the impugned notices are issued after obtaining the prior approval of CIT (IT), Mumbai-2. The case of the revenue is that the notice dated 04.04.2022 is issued within three years since as per the 5th proviso to section 149, the AO has got additional 9 days for issue of notice under section 148 i.e. upto 09.04.2022. since the extended time of 9 days i.e. from 22.03.2022 to 31.03.2022 was given to the assessee. Therefore, it is argued by the revenue that notice issued on 04.04.2022 is within period of three years and the approval has been correctly obtained by the authority as specified in section 151(i) of the Act. The assessee is contending that the 5th proviso to section 149 under which the revenue is taking cover is inserted w.e.f. 01.04.2023 and therefore not applicable to assessee's case. In this regard, we notice that the Hon'ble Bombay High Court in the case of Vodafone Idea Ltd (supra) has held that- “1. Petitioner is impugning a notice dated 19th March 2022 issued under Section 148A(b) of the Income Tax Act, 1961 ("the Act"), the order passed under Section 148A(d) of the Act and the notice both dated 7th April 2022 issued under Section 148 of the Act. One of the grounds raised is that the sanction to pass the order under Section 148A(d) of the Act and issuance of notice under Section 148 of the Act is invalid inasmuch as the sanction has been admittedly issued by the Principal Commissioner of Income Tax ("PCIT") and not by the Principal Chief Commissioner of Income Tax (PCCIT"). 2. Petitioner's request for a copy of the sanction has also been denied. Even in the affidavit in reply, the Department is refusing to give the sanction which makes us wonder what is the national secret involved in that, that Assessee is being refused what he is rightfully entitled to receive from the Department. In the affidavit in reply, the stand taken by the Revenue is it will be made available during the re- assessment proceeding. 3. The impugned order and the impugned notice both dated 7th April 2022 state that the Authority that has accorded the sanction is the PCIT, Mumbai 5. The matter pertains to Assessment Year ("AY") 2018-19 and since the impugned order as well as the notice are issued on 7th April 2022, both have been issued beyond a period of three years. Therefore, the sanctioning authority has

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to be the PCCIT as provided under Section 151 (ii) of the Act. The proviso to Section 151 has been inserted only with effect from 1" April 2023 and, therefore, shall not be applicable to the matter at hand. 4. In this circumstances, as held by this Court in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors., the sanction is invalid and consequently, the impugned order and impugned notice both dated 7th April 2022 under section 148A(d) and 148 of the Act are hereby quashed and set aside.” 8. Similar view is held by the jurisdictional High Court also in other cases as listed herein above. In the decision of the Vodafone Idea (supra), the Hon'ble High Court has given a specific finding that the proviso to section 151 extending the time limit as per the third, fourth or fifth proviso to section 149 is not applicable for AY 2018- 19 as the same is inserted only w.e.f. 01.04.2023. When we apply the said ratio to assessee's case, in our considered view, the claim of the Revenue that the period of 3 years expires only on 09.04.2022 is not correct and that revenue cannot take shelter under the proviso to section 151 which came into effect only from 01.04.2023. Accordingly, the notice issued on 04.04.2022 by the AO is issued beyond three years and therefore the approval should have been obtained by the authorities as specified under section 151(ii) Principle Chief Commission. As already stated the approval in assessee's case is obtained from CIT(IT) and therefore we are inclined to agree with the contention of the assessee that the notice under section 148 has been issued without obtaining the approval from the correct authority as specified under section 151. Respectfully following the above decisions of the Hon'ble Bombay High Court we hold that the notice issued by the AO under section 148 without obtaining approval from correct appropriate authority is invalid and the assessment done under section 147 r.w.s. 144(13) of the Act is liable to be quashed.” 11. Similar view was reiterated by the Coordinate Bench in case of ACIT vs. Asha P. Kedia (Supra). It is relevant to observe, though the aforesaid decisions of the Coordinate Benches were rendered at a prior point of time and were available when the appeal of Albert Joseph Rozario (Supra) vs. ITO (Supra) was taken up before another Coordinate Bench, however, either knowingly or unknowingly, these decisions of the Coordinate Benches were not brought to the notice of the learned Bench. It appears so, because, there is no reference

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of these decisions in case of Albert Joseph Rozario vs. ITO (Supra). Had these decisions of Coordinate Benches been brought to the notice of learned Bench deciding the case of Albert Joseph Rozario (Supra), a different view might have been taken. In any case of the matter, the point of time from which the proviso to Section 151 of the Act would be applicable was considered by the Hon’ble Jurisdictional High Court in at least four judgments. Three of these judgments have already been referred to in the decision of my learned brother Accountant Member. Even in case of Agnello Oswin Dias vs. ACIT [2014] 161 taxmann.com 16 (Bombay), the Hon’ble Jurisdictional High Court, while reiterating the view that after expiry of three years from the end of the relevant assessment year, the specified authority in terms of Section 151(ii) of the Act is PCCIT, has held that the proviso to Section 151 of the Act having been inserted w.e.f. 01.04.2023 shall not be applicable prior to 01.04.2023. Meaning thereby, the proviso will not have retrospective effect. These decisions of the Hon’ble Jurisdictional High Court, being directly on the issue, constitute binding precedents. 12. In any case of the matter, Sections 149 and 151 of the Act have been enacted for different purposes and operate in different situations. While Section 149 of the Act, prescribes limitation for issuance of notice u/s. 148 and 148A of the Act, Section 151 of the Act prescribes the timeline for the specified authority to grant sanction for Section 148 and 148A of the Act. At the cost of repetition, it needs to be observed that prior to insertion of proviso u/s. 151 of the Act by Finance Act, 2023 w.e.f. 01.04.2023, the specified authority who can grant sanction for initiating proceedings u/s. 148A and issuing notice u/s. 148 of the Act after expiry of three years from the end of the assessment year is PCCIT/CCIT in terms with Section 151(ii) of the Act. Hence, in absence of any enabling provision u/s. 151 of the Act, The 3rd, 4th and 5th or 6th provisos of Section 149(1) of the Act cannot be read into Section 151 of the Act to extend the time limit u/s. 151(i) of the Act. 13. In view of aforesaid, I fully agree with the decision of my learned brother Accountant Member that, both the order passed u/s. 148A(d) of the Act and notice issued u/s. 148 of the Act are invalid due to lack of sanction by the specified authority as specified u/s. 151(ii) of the Act. As a natural corollary, the assessment order passed in consequence thereof is also invalid. Hence, the ground is allowed.”

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9.1. Further, reliance was placed on the Chennai Tribunal decision in the case of Salem and Namakkal District Police Co-operative T & C Society Ltd -Vs- ITO, in ITA No. 367/Chny/2026 dated 23.03.2026 as follows:

“47. However, we find that the proviso to Section 151 of the Act was only introduced by way of Finance Act, 2023, with effect from 01.04.2023, i.e. the said amendment was introduced only after the sanction was granted on the present case / not available at the time of recording of sanction in terms of Section 151 of the Act in the case of the appellant herein. 48. The Ld. AR took us through the Finance Bill, 2023, wherein clause 71, proposing the said amendment to Section 151 as well the notes of clauses to Finance Bill, 2023, wherein relevant note to the said amendment reads as follows: Clause 71 of the Bill seeks to amend the section 151 of the Income tax Act relating to sanction for issue of notice. It is proposed to amend clause (ii) of the said to provide that the specified authority for the purposes of section 148 and section 148A shall be the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year. It is further proposed to insert a proviso in the said section so as to provide that the period of three years for the purposes of clause (i) shall be computed after taking into account the period of limitation as excluded by the third or fourth or fifth provisions or extended by the sixth proviso to sub-section (1) of section 149. These amendments will take effect from 1st April, 2023. 49. Thus, it is an irrefutable fact that the amendment brought in by Finance Act, 2023 in introducing the proviso to Section 151 of the Act by giving effect to the exclusion of time limit by operation of 3rd to 5th proviso to Section 149(1) of the Act would take effect only from 01.04.2023.

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50.

Hence, it can be said that the said amendment would not come to the rescue of the revenue on the facts of the present case in view of the fact that the notice u/s.148 as well the order u/s.148A(d) of the Act being issued / passed well prior to the introduction of the said amendment, i.e. on 19.04.2022. 51. Before us, the Ld. DR argued that the said amendment introduced by Finance Act, 2023 ought to be reckoned as clarificatory and would have retrospective applicability, thereby validating the sanction accorded by the PCIT, Madurai – 1 on the facts of the present case. He further relied on the judgement of the Hon’ble Calcutta High Court in the case of Giriraj Commercial (P.) Ltd. v. Union of India reported in 169 taxmann.com 168 in support of his contentions. 52. This argument of the ld.DR is unable to be countenanced by us for the simple reason that the said amendment was introduced specifically with effect from 01.04.2023 and the plain reading of the notes on clauses as well as the memorandum to Finance Act, 2023 leave no room whatsoever to interpret it otherwise. Moreover, we are not inclined to accept the argument of the Department since the AO could not have foreseen such an amendment while passing the order u/s.148A(d) of the Act / issuing the notice u/s.148 of the Act nor the PCIT, Madurai – 1 could have foreseen such amendment while according sanction in terms of Section 151 of the Act. 53. Hence for the reasons discussed above, we hold that the amendment to Section 151 of the Act, introduced by Finance Act, 2023, with effect from 01.04.2023 cannot be reckoned to have retrospective applicability and on this ground we reject the argument put forth by the ld. DR. 54. It was further argued by the ld. DR, that the approval granted by the competent authority, i.e. PCIT, Madurai – 1 to the AO for issuing the notice u/s.148A(b) of the Act vide approval dated 23.03.2022 as mandated by 1st proviso to Section 148 of the Act would suffice the requirement as per the Section 151 of the Act and as such there was no requirement for the AO to obtain approval / sanction once again by the competent authority for issuing the notice u/s.148 of the Act / passing of the order u/s.148A(d) of the Act.

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55.

We find that the 1st proviso to Section 148 of the Act as per Finance Act, 2021 reads as follows: “Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice.” Thus, on the facts of the present case, the Show Cause Notice u/s.148A(b) of the Act was issued upon the assessee herein only upon prior approval of the competent authority, PCIT, Madurai – 1. But whether this sanction would also be available /extended to the issuance of notice u/s.148 of the Act/ passing of the order u/s.148A(d) of the Act by the AO by reckoning it was a fit case for issuance of such notice u/s.148 of the Act ? 56. We are unable to further accept this argument of the ld. DR, because if it were to be accepted, it would result in a scenario wherein the competent authority was according sanction / approval in terms of Section 151 of the Act for issuing notice u/s.148 of the Act even prior to reply of the assessee to the Show Cause Notice u/s.148A(b) of the Act and even prior the decision of the AO in reckoning whether it was a fit case or not for issuing notice u/s.148 of the Act. 57. Furthermore, if the said argument were to be accepted, then the very purpose behind introduction of provisions in Section 148A of the Act by way of Finance Act, 2021 to grant an opportunity to the tax payer to demonstrate his case for dropping the proceedings before issuing notice u/s.148 of the Act would stand defeated. 58. Thus, on the facts of the present case, we find that although the sanction was granted to the AO for issuing the Show Cause Notice u/s.148A(b) of the Act, a separate sanction is to be granted for the purpose of issuance notice u/s.148 of the Act as well as the passing of the order u/s.148A(d) of the Act, in the event of the AO finding it fit to do so. Hence, we reject this argument of the ld. DR also.”

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10.

When we apply the above ratio of the decisions in the present assessee's case, in our considered view, the claim of the Revenue that the period of 3 years expires only on 05.04.2022 is not correct and that Revenue cannot take shelter under the proviso to section 151 which came into effect only from 01.04.2023. Accordingly, the notice issued on 12.04.2022 by the AO is issued beyond three years and therefore the approval should have been obtained by the authorities as specified under section 151(ii) of the Act namely Principle Chief Commissioner of Income Tax. Whereas approval in assessee's case is obtained from PCIT and therefore we are inclined to agree with the contention of the assessee that the notice under section 148 has been issued without obtaining proper approval from the Competent Authority as specified and therefore the entire under section 151[ii] of the Act reassessment proceeding is void-ab-initio is liable to be quashed. Thus, the additional ground raised by the assessee is hereby allowed.

11.

In the result, the appeal filed by the assessee is hereby allowed.

Order is pronounced under provision of Rule 34 of ITAT Rules, 1963 on 23-07-2026

Sd/- Sd/- (RATNESH NANDAN SAHAY) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat : Dated 23/07/2026 *Ganesh Kumar, Sr. PS आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee

I.T.A No. 1262/SRT/2025 A.Y. 2018-19 Page No 21 Hiteshkumar Poptabhai Borad

2.

Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, 6. Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, सूरत

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