GAJMURTI AGENCY PVT. LTD.,KOLKATA vs. I.T.O., WARD - 1(1), KOLKATA

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ITA 1057/KOL/2026Status: DisposedITAT Kolkata13 July 2026AY 2016-20175 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the approval for reopening the assessment under Section 148A(d) was obtained from an incorrect authority (Principal CIT instead of the specified authority under Section 151(ii)) for an assessment year where the three-year period had expired. This non-compliance vitiated the Assessing Officer's jurisdiction.

What were the facts?

The assessee's assessment was reopened under Section 148 after the Hon'ble Supreme Court's judgment in Ashish Agarwal. The AO issued a notice under Section 148A(d) and subsequently a notice under Section 148, with approval from the Principal CIT. The assessee's appeal before the CIT(A) was dismissed for delay, but the delay was condoned by the ITAT.

What were the issues?

The key issue was whether the reopening of assessment was valid when the approval for issuing the notice under Section 148 was obtained from the wrong authority as per Section 151, especially after the expiry of the three-year period.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 151

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH: KOLKATA

Before: Shri Rajesh Kumar& Shri Pradip Kumar Choubey]

Aआयकर अपील�य अ�धकरण, कोलकाता पीठ “बी’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH: KOLKATA �ी राजेश कुमार, लेखा सट�य एवं �ी �द�प कुमार चौबे, �या�यक सद�य के सम� [Before Shri Rajesh Kumar, Accountant Member& Shri Pradip Kumar Choubey, Judicial Member] I.T.A. No. 1057/Kol/2026 Assessment Years: 2016-17 Gajmurti Agency Pvt. Ltd. Vs. ITO, Ward-1(1), Kolkata

(PAN: AADCB 3068 M) ( अपीलाथ� ) Respondent / ��यथ� Appellant / Date of Hearing / सुनवाई 25.06.2026 क� �त�थ Date of Pronouncement/ 13.07.2026 आदेश उ�घोषणा क� �त�थ For the Appellant/ Shri Akkal Dudhwewala, FCA �नधा�रती क� ओर से Vidhi Ladia, AR For the Respondent/ Shri Manas Mondal, Addl. CITSR DR राज�व क� ओर से

ORDER / आदेश Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 29.01.2026 for the AY 2016-17. 2. Brief facts of the case are that, the assessee is a company which had filed its return of income u/s 139(1) of the Act for AY 2016-17 on 25.07.2016. The AO had

2 I.T.A. No.1057/Kol/2026 Assessment Year: 2016-17 Gajmurti Agency Pvt. Ltd. issued notice u/s 148 of the Act dated 10.05.2021. Pursuant to the judgment of the Hon’ble Supreme Court dated May 4, 2022 in the case of Union of India & Ors. V. Ashish Agarwal in Civil Appeal No. 3005 of 2022, the notice u/s 148 was deemed to be notice u/s 148A(b) of the Act and the AO issued letter dated 02.06.2022 upon the assessee requiring it to furnish explanation within two weeks i.e. before 22.06.2022. The AO passed the order u/s 148A(d) of the Act on 31.07.2022 and issued notice u/s 148 of the Act dated 31.07.2022, both with the approval of Pr.CIT-1, Kolkata. Subsequently statutory notices u/s 143(2) and 142(1) were issued to the assessee and in compliance to such notices, the assessee made time to time compliances and submitted details and explanations as called for. The AO completed the assessment u/s 147/143(3) of the Act vide order dated 05.05.2023 computing taxable income at Rs.4,99,72,015/-.

3.

Aggrieved by the said order, the assessee preferred an appeal before the ld. CIT(A) who dismissed the appeal of the assessee by refusing to condone delay in filing of two days.

4.

The ld. AR for the assessee explained the reasons for delay of two days in filing of appeal before the ld. CIT(A), and the ld. DR appearing for the Revenue did not oppose the same and therefore, the delay is treated as condoned.

5.

The ld. AR, at the time of hearing, had filed additional grounds and vehemently pressed that the legal grounds being raised went to the very root of jurisdiction and urged us to adjudicate the same. The relevant ground is extracted below:-

“For that on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not holding that the impugned assessment was reopened without obtaining valid sanction u/s 151 of the Act and therefore the notice issued u/s 148 of the Act and the consequent order dated 05.05.2023 be declared to be bad in law and accordingly be quashed.” 6. After hearing the rival contentions and perusing the materials available on record, we find that the assessee has raised a legal issue challenging the validity of

3 I.T.A. No.1057/Kol/2026 Assessment Year: 2016-17 Gajmurti Agency Pvt. Ltd. approval granted by the ld. PCIT-1, Kolkata on 31.07.2022, for issuance of notice u/s 148 of the Act for AY 2016-17. On this stated factual position, the legal issue contended before us is no longer res integra, dealt by plethora of decisions by the Coordinate Benches as well as by Hon'ble Jurisdictional Calcutta High Court in the cases of Fabulous Travel Services Pvt Ltd Vs ITO (WPO/1037/2023) dated 12.05.2023, KK Agarwal Sons & HUF Vs ITO (WPA 25770 of 2022) dated 14.12.2022in the context of the relevant AY 2016-17. The relevant operative portion of the decision of Hon’ble Calcutta High Court in the case of Fabulous Travel Services Pvt Ltd Vs ITO (supra), is as under:- “By this writ petition, petitioner has challenged the impugned order dated 31st July, 2022 under Section 148A(d) of the Income Tax Act, 1961relating to assessment year 2016-17 by raising the pure question of law relating to the jurisdiction of the assessing officer concerned in passing the aforesaid impugned order by non-compliance of the formalities of taking approval of the specified authority mentioned in Section 151(ii) of the Income Tax Act, 1961. Admitted position in this case is that impugned order under Section148A(d) of the Act has been passed after a lapse of three years from the end of the relevant assessment year and in this case specified authority is not the Principal Commissioner of Income Tax from whom approval has been taken before passing the aforesaid impugned order and it appears on a plain reading of Section 151(ii) of the said Act that Principal CIT from whom approval has been taken is not the specified authority for the purpose of approval under Section 148 and Section 148A of the Income Tax Act, 1961. Considering the facts and circumstances of this case, submission of the parties and the aforesaid factual and legal position, the aforesaid impugned order under Section 148A(d) of the Act dated 31st July, 2022 and all subsequent proceedings are quashed.” 7. The ld. AR also brought to our notice that the Hon’ble Bombay High Court in the case of Alag Property Construction Pvt. Ltd. vs. ACIT [2025] 179 taxmann.com 578, while dealing with this issue, took cognizance of the decisions of the Hon’ble Apex Court in the cases of Union of India vs. Ashish Agrawal [2022] 138 taxmann.com 64 (SC) and Union of India vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC)and held as under:

"9. In the present case, the period of three years from the end of the A.Y. 2017-18 fell for completion on 31 March 2021. As the expiry date fell during the time period of 20th March 2020 and 31st March 2021, under Section 3(1) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (for short "TOLA"), the authority specified under Section 151(f) of the new regime could have granted sanction only till 30th June 2021.

4 I.T.A. No.1057/Kol/2026 Assessment Year: 2016-17 Gajmurti Agency Pvt. Ltd. 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(1) 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(f) 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).

12.

Non-compliance by Respondent No.1 with the provisions contained in Section 148A(d) read with Section 151(4) 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.

14.

We accordingly set aside the impugned order dated 18.08.2022 passed under Section 148A(d) of the Act and the consequential notice issued under section 148 dated 23.08.2022, and all other proceedings/orders emanating therefrom.”

8.

The facts involved the above cited judgments are similar to the present case before us which have already been narrated in the above paragraphs. We thus conclude that, where order u/s. 148A(d) was passed beyond three years from the relevant AY 2016-17 and approval was obtained from Principal CIT instead of the required authority prescribed u/s.151(ii) of the Act, and the non-compliance of such statutory mandate vitiates the jurisdiction of Assessing Officer, rendering the said order u/s. 148A(d) and

5 I.T.A. No.1057/Kol/2026 Assessment Year: 2016-17 Gajmurti Agency Pvt. Ltd. notice u/s.148 liable to be quashed. Therefore, the approval granted u/s 151(i) in the present case, is held to be invalid and is hereby quashed. Consequently, the notice issued u/s 148 of the Act as well as the assessment framed vide order dated 05.05.2023, are also invalid and are hereby quashed.

9.

Since, we have allowed the appeal on legal issue, other grounds raised on merit are not being adjudicated at this stage and are left open to be decided if need arises for the same in future.

10.

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

Order is pronounced in the open court on 13th July, 2026

Sd/- Sd/-

(Pradip Kumar Choubey /�द�प कुमार /चौबे) (Rajesh Kumar/राजेश कुमार) Judicial Member/�या�यक सद�य Accountant Member/लेखा सद�य Dated: 13th July, 2026 SM, Sr. PS Copy of the order forwarded to: 1. Appellant- Gajmurti Agency Pvt. Ltd., 39A, Armenian Street, 3rd Floor, Kolkata-700001 2. Respondent – ITO, Ward-1(1), Kolkata 3. Ld. CIT(A)- NFAC, Delhi 4. Ld. Pr. CIT- , Kolkata 5. DR, Kolkata Benches, Kolkata

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