JWR LOGISTICS PRIVATE LIMITED,RAIGAD vs. ACIT CC-5(3), MUMBAI

आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM:

This appeal by the assessee is directed against the order dated 21.01.2026 passed by the learned Commissioner of Income Tax (Appeals)-53, Mumbai [hereinafter referred to as "the CIT(A)"], under section 250 of the Income Tax Act, 1961 [hereinafter referred to as "the Act"], for the assessment year 2018-19, arising from the

2 ITA No. 3016/Mum/2026 JWR Logistics Pvt. Ltd. assessment order dated 16.03.2024 passed by the Assessing Officer under section 143(3) read with section 147 of the Act.

Facts in Brief 2. Briefly stated, the assessee filed its return of income on 31.10.2018 declaring total income at Nil. Based upon information emanating from a survey conducted in the case of M/s Theo Connect Private Limited and its group concerns, the Assessing Officer initiated proceedings under section 148A of the Act and, after passing an order under section 148A(d), issued notice under section 148 of the Act on 06.04.2022. The reassessment was completed by disallowing expenditure of Rs. 11,80,000/- claimed towards brand-building services allegedly received from M/s People Advertising Private Limited and determining the total income at Rs. 11,80,000/-.

GROUND NO.1:

3 ITA No. 3016/Mum/2026 JWR Logistics Pvt. Ltd. The learned CIT(A) erred in upholding the order of the Ld. AO, passed u/s.143(3) rws 147 of the Act. The order is passed contrary to the facts of the case and provisions of the law, with the intention to punish the appellant. GROUND NO.2: Without prejudice to Ground Nos.1 above, the learned CIT(A) erred in upholding the initiation of reopening proceedings by the Ld. AO and the passing of the order u/s.148A(d) of the Act. The same has been passed contrary to the facts of the case and provisions of the Act, with an intention to punish the appellant. GROUND NO.3: Without prejudice to Ground Nos.1 and 2 above, the learned CIT(A) erred in upholding the order passed by the Ld. AO u/s.143(3) rws 147, without providing the opportunity of cross examination. The same be annulled and quashed, since it is passed in violation of principles of natural justice. GROUND NO.4: Without prejudice to Ground Nos.1 and 3 above, the learned CIT(A) erred in upholding the additions of Rs. 11,80,000/- made by the Ld. AO, to the appellant’s total income, as non-genuine expenses. The same is erroneous, illegal and wrong, both in respect of the facts of the case and the applicable provisions of the Act. The appellant craves leave to add, amend or alter any grounds of appeal.

4 ITA No. 3016/Mum/2026 JWR Logistics Pvt. Ltd. notice under section 148A(b) of the Act was issued on 15.03.2022, the order under section 148A(d) of the Act was passed on 06.04.2022 and the consequential notice under section 148 of the Act was also issued on 06.04.2022. He pointed out that the statutory approval for initiating the proceedings was obtained from the Principal Commissioner of Income Tax (Central)-3, Mumbai. The learned AR contended that, having regard to the period that had elapsed from the end of the relevant assessment year, the specified authority competent to grant approval was the Principal Chief Commissioner of Income Tax and not the Principal Commissioner of Income Tax. He, therefore, submitted that the approval had been granted by an authority not competent under the Act and, consequently, the entire reassessment proceedings, including the order passed under section 148A(d), the notice issued under section 148 and the resultant assessment order, were without jurisdiction and liable to be quashed.

6.1 The learned AR placed reliance upon the following decisions of the coordinate Benches: 1. Aptivaa Middle East EZE v. DCIT, ITA No. 1221/Mum/2025, order dated 15.10.2025. 2. Paresh Hiralal Shah v. ITO, ITA No. 4775/Mum/2025, order dated 10.11.2025. 3. Ratul Tex Private Limited v. DCIT, ITA No. 5052/Mum/2025, order dated 30.04.2026. 4. Surat Goods Transport Private Limited v. DCIT, ITA No. 7556/Mum/2025, order dated 13.02.2026.

5 ITA No. 3016/Mum/2026 JWR Logistics Pvt. Ltd. 6.2 The common ratio is that where notice under section 148 is issued after three years from the end of the relevant assessment year, approval must be obtained from the authority specified under section 151(ii). Approval granted by the PCIT under section 151(i) is invalid and renders the reassessment proceedings without jurisdiction.

6 ITA No. 3016/Mum/2026 JWR Logistics Pvt. Ltd. “At the same time, to give further clarity with regards to the specified authority a proviso is proposed to be inserted in the section 151 to provide that while computing the period of three years for the purposes of determining the specified authority the period which has been excluded or extended as per the provisos in section 149 of the Act from the time limit for issuance of notice under section 148 of the Act shall be taken into account.” 7.1 It was submitted that the amendment was explanatory and clarificatory in nature and did not create any new jurisdiction or alter the classes of approving authorities. According to the learned DR, any other interpretation would result in two different limitation periods operating within the same reassessment proceedings, one for section 149 and another for section 151. He contended that once the statutory exclusions contemplated under section 149 were taken into account and the proceedings continued to fall within three years, the approval granted by the Principal Commissioner of Income Tax under section 151(i) was valid. He further submitted that sanction under section 151 was an administrative safeguard and that no prejudice was caused to the assessee merely because the approval was granted by the Principal Commissioner instead of the Principal Chief Commissioner. He, therefore, prayed that the assessee’s jurisdictional challenge be rejected and the reassessment proceedings be upheld.

7 ITA No. 3016/Mum/2026 JWR Logistics Pvt. Ltd. section 148A(d) and issuing the notice under section 148 of the Act on 06.04.2022 was an approval by the competent specified authority under section 151 of the Act.

8.1 The relevant dates are not in dispute. The assessment year under consideration is 2018-19, which ended on 31.03.2019. The show cause notice under section 148A(b) of the Act was issued on 15.03.2022. The order under section 148A(d) was passed on 06.04.2022 and the consequential notice under section 148 was also issued on 06.04.2022. Thus, on the date of passing the order under section 148A(d) and issuing the notice under section 148, more than three years had elapsed from the end of the relevant assessment year. Admittedly, the approval for these actions was granted by the Principal Commissioner of Income Tax (Central)-3, Mumbai, and not by the Principal Chief Commissioner of Income Tax.

8.2 Section 151, as it stood on 06.04.2022, read 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 where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year.”

8 ITA No. 3016/Mum/2026 JWR Logistics Pvt. Ltd. 8.3 On a plain reading of the provision, the identity of the specified authority is determined with reference to the period that has elapsed from the end of the relevant assessment year. Where three years or less have elapsed, approval may be granted by an authority specified in clause (i). Where more than three years have elapsed, approval is required from the higher authority specified in clause (ii).

8.4 In the present case, the period of three years from the end of the assessment year 2018-19 expired on 31.03.2022. Therefore, on 06.04.2022, when the order under section 148A(d) was passed and the notice under section 148 was issued, more than three years had elapsed from the end of the relevant assessment year. Accordingly, the competent specified authority was the Principal Chief Commissioner of Income Tax or any other authority specified in section 151(ii).

9 ITA No. 3016/Mum/2026 JWR Logistics Pvt. Ltd. year. On that basis, the learned DR submitted that approval from the Principal Commissioner under section 151(i) was valid.

9.1 The learned DR further relied upon the Memorandum explaining the Finance Bill, 2023, and contended that the proviso inserted in section 151 with effect from 01.04.2023 was merely explanatory and clarificatory. According to him, the proviso only clarified the methodology which was already implicit in the integrated reassessment scheme introduced by the Finance Act, 2021.

10.1 The expression “for the purposes of computing the period of limitation as per this section” is significant. It expressly confines the exclusion to the computation of limitation under section 149. The provision, as it then stood, did not provide that the excluded period would also be taken into account for identifying the specified authority under section 151.

10.2 Further, section 149(2) expressly provided: “The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151.”

10 ITA No. 3016/Mum/2026 JWR Logistics Pvt. Ltd.

Thus, section 149(1), including the period of limitation and the exclusions provided therein, is made subject to section 151. The statutory scheme does not provide that section 151 is subject to section 149. Consequently, even if a notice may be within limitation after applying an exclusion available under section 149(1), the requirement of obtaining approval from the authority specified in section 151 must be independently satisfied.

10.3 The contention of the Revenue, if accepted, would reverse the statutory hierarchy prescribed in section 149(2). It would make section 151 subject to the exclusions contained in section 149, although the Legislature had expressly provided the converse. Such an interpretation cannot be accepted, particularly when the authority competent to grant approval is a jurisdictional requirement.

10.4 It was only by the Finance Act, 2023, with effect from 01.04.2023, that the following proviso was inserted in section 151: “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 or fourth or fifth provisos or extended by the sixth proviso to sub-section (1) of section 149.” The proviso expressly brought the periods excluded or extended under section 149 into the computation of three years for the purpose of section 151(i). The amendment was made operative from 01.04.2023. The order under section 148A(d) and notice under section 148 in the present case were issued on 06.04.2022,

11 ITA No. 3016/Mum/2026 JWR Logistics Pvt. Ltd. much before the proviso came into force. The proviso, therefore, has no application to the present proceedings.

10.5 The Memorandum explaining the Finance Bill, 2023 also expressly stated that the amendments would take effect from 01.04.2023. Merely because the Memorandum used the expression “to give further clarity”, the amendment cannot be applied retrospectively so as to alter the authority competent to grant approval on 06.04.2022. An explanatory memorandum cannot override the express effective date prescribed by Parliament.

10.6 We also note that the show cause notice under section 148A(b) of the Act was issued on 15.03.2022. The decision of the Hon’ble Supreme Court in Union of India v. Rajeev Bansal concerned notices originally issued under the old reassessment regime between 01.04.2021 and 30.06.2021 and thereafter treated as notices under section 148A(b) pursuant to the decision in Union of India v. Ashish Agarwal. The Hon’ble Supreme Court held that TOLA extended the time for grant of approval under section 151(i) only where the period of three years from the end of the assessment year expired between 20.03.2020 and 31.03.2021. In the present case, the three-year period for the assessment year 2018-19 expired on 31.03.2022. Therefore, the case does not fall within the period considered in Rajeev Bansal, and the special extension under TOLA has no application. On the contrary, the following

12 ITA No. 3016/Mum/2026 JWR Logistics Pvt. Ltd. observations of the Hon’ble Supreme Court support the assessee’s jurisdictional objection: “Grant of sanction by the appropriate authority is a precondition for the assessing officer to assume jurisdiction under Section 148 to issue a reassessment notice. Section 151 of the new regime does not prescribe a time limit within which a specified authority has to grant sanction. Rather, it links up the time limits with the jurisdiction of the authority to grant sanction. Section 151(ii) of the new regime prescribes a higher level of authority if more than three years have elapsed from the end of the relevant assessment year. Thus, non-compliance by the assessing officer with the strict time limits prescribed under Section 151 affects their jurisdiction to issue a notice under Section 148.” (para 76)

10.7 Thus, approval by the appropriate specified authority is not merely an administrative formality. It is a condition precedent to the assumption of jurisdiction under section 148. The contention that no prejudice was caused to the assessee because both the PCIT and PCCIT belong to the same administrative hierarchy cannot cure the jurisdictional defect. Where the Act requires approval from a particular authority, approval from another authority cannot be treated as substantial compliance. The issue before us is otherwise directly covered by the binding decision of the Hon’ble jurisdictional High Court in Vodafone Idea Limited v. DCIT, Writ Petition No. 2768 of 2022, order dated 06.02.2024. That case also concerned the assessment year 2018- 19. Therein, the notice under section 148A(b) was issued on 19.03.2022, whereas the order under section 148A(d) and the

13 ITA No. 3016/Mum/2026 JWR Logistics Pvt. Ltd. notice under section 148 were issued on 07.04.2022 after obtaining approval from the PCIT. The Hon’ble High Court held: “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 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 1st April 2023 and, therefore, shall not be applicable to the matter at hand. 4. In these 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.”

10.8 The facts of the present case are materially identical to those considered in Vodafone Idea Limited. In both cases the relevant assessment year is 2018-19; the show cause notice under section 148A(b) was issued before 31.03.2022; the order under section 148A(d) and the notice under section 148 were issued in April 2022, after the expiry of three years; approval was obtained from the PCIT and not the PCCIT; and the Revenue sought to rely upon the exclusion of time and the subsequently inserted proviso to section 151.

10.9 The Hon’ble jurisdictional High Court has expressly held that, in such circumstances, the specified authority was the PCCIT

14 ITA No. 3016/Mum/2026 JWR Logistics Pvt. Ltd. under section 151(ii) and that the proviso inserted with effect from 01.04.2023 was not applicable. The issue is, therefore, concluded by a binding precedent and is not open for reconsideration by the Tribunal.

In Siemens Financial Services Private Limited v. 11. DCIT (2023) 457 ITR 647 (Bom.), the Hon’ble jurisdictional High Court had earlier considered the same jurisdictional requirement and observed: “As per section 151 of the Act, the ‘specified authority’ who has to grant his sanction for the purposes of section 148 and section 148A is the Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, the Chief Commissioner or Director General if more than three years have elapsed from the end of the relevant assessment year.” The Hon’ble High Court held that approval granted by the PCIT under section 151(i), where section 151(ii) was applicable, was invalid and consequently quashed the order under section 148A(d) and the notice under section 148.

11.1 The coordinate Benches have also consistently followed the binding decisions of the Hon’ble jurisdictional High Court. The common ratio emerging from the aforesaid decisions is that where the order under section 148A(d) and notice under section 148 are issued after the expiry of three years from the end of the relevant assessment year, approval must be obtained from the PCCIT or another authority specified in section 151(ii). Approval granted by

15 ITA No. 3016/Mum/2026 JWR Logistics Pvt. Ltd. the PCIT, being an authority specified under section 151(i), does not confer jurisdiction upon the Assessing Officer.

11.2 We may clarify that the show cause notice under section 148A(b) in the present case was issued on 15.03.2022, before the expiry of three years from the end of the relevant assessment year. Therefore, the approval obtained at that stage from the PCIT does not, by itself, suffer from the same infirmity. However, a separate approval by the competent specified authority was mandatorily required before passing the order under section 148A(d) and issuing the notice under section 148. Since those actions were taken on 06.04.2022, the competent specified authority was the PCCIT under section 151(ii).

11.3 Admittedly, the order under section 148A(d) and the notice under section 148 were issued after obtaining approval from the PCIT (Central)-3, Mumbai. The approval was thus granted by an authority not competent under section 151(ii). Consequently, the Assessing Officer lacked jurisdiction to pass the order under section 148A(d) and issue the notice under section 148.

16 ITA No. 3016/Mum/2026 JWR Logistics Pvt. Ltd. from the competent specified authority. The same are accordingly quashed.

12.1 The reassessment order dated 16.03.2024 passed under section 143(3) read with section 147 of the Act, being founded upon an invalid notice under section 148, cannot survive and is also quashed. The contrary contentions advanced by the learned DR are rejected.

12.2 Accordingly, Ground Nos. 1 and 2, insofar as they challenge the validity of the reassessment proceedings, are allowed. In view of our decision quashing the reassessment proceedings, Ground No. 3 concerning denial of cross-examination and Ground No. 4 challenging the disallowance of Rs. 11,80,000/- on merits have become academic and do not require adjudication.

Sd/- Sd/- (NARENDER KUMAR CHOUDHRY) (MAKARAND VASANT MAHADEOKAR) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai, Dated 15/07/2026 PS आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��थ� / The Respondent. 2. संबंिधत आयकर आयु� / The CIT(A) 3. आयकर आयु�(अपील) / Concerned CIT 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, मु�ई / DR, ITAT, Mumbai 5.

17 ITA No. 3016/Mum/2026 JWR Logistics Pvt. Ltd. गाड� फाईल / Guard file. 6. आदेशानुसार/ BY ORDER, स�ािपत �ित //True Copy// 1. उप/सहायक पंजीकार ( Asst. Registrar) आयकर अपीलीय अिधकरण, मु�ई / ITAT, Mumbai