ADITYA SUSHIL DAMANI,MUMBAI vs. ITO 412(1)(1), MUMBAI

ITA No. 3097/Mum/2026; Aditya Sushil Damani Per Arun Khodpia, AM:

The captioned appeal is filed by the assessee, against the order of

Commissioner of Income Tax Appeals/ National Faceless Appeal Centre (NFAC),

Delhi [“the Ld. CIT(A)] dated 22.01.2026 for the assessment year 2019-20, which

in turn arises from assessment order u/s 147 r.w.s. 143(3) of the Income Tax Act,

1961 (“the Act”) dated 24.12.2024 passed by The Income Tax Officer, 42(1)(1),

Mumbai (in short, “the Ld. AO”). The grounds of appeal raised by the assessee

are as under:

“1. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in dismissing the appeal filed by the Appellant before the learned CIT(A) against the order dated 22.01.2026 under section 147 r.w.s 144B of the Act passed by the learned A.O. National Faceless Assessment Centre, New Delhi (hereinafter referred to as "learned AO" of "Ld. AO") 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in appreciating that the learned JAO had no jurisdiction to issue show cause notice u/s 148A(b) of the Income Tax Act, 1961 (the Act) dated 28 March 2023, pass order u/s 148A(d) of the Act dated 7th April 2023 and issue notice u/s 148 of the Act dated 7th April 2023, as after 29th March 2022 same can be done only in a faceless manner by the faceless assessing officer. 3. On the facts and in the circumstances of the case and in law; the learned CIT(A) erred in appreciating that the time limit considered by the Ld JAO for issuance of notice under section 148, Ld Principal Commissioner in the approval under section 151 has been referred as section 149(1)(b) of the Act and thus the notice is bad in law as said period referred under 149(1)(b) is applicable on where income escaping assessment exceeds Rs 50,00,000, which is not the case in the present facts. 4. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in appreciating that the approval of specified authority referred in clause (ii) of section 151 of the Act ought to have been obtained and not that referred to in clause (i) of section 151 of the Act. In other words, Ld. CIT(A) erred in appreciating that the Ld AO ought to have obtained approval of Principal Chief Commissioner or Principal Director General and not that of Principal Commissioner. 5. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that the Appellant is not entitled to deduction of Rs 400,000 being deduction claimed under section 80GGC of the Act by the Appellant in the return of income filed for previous year relevant to Assessment Year 2019-20, in respect of donation made to Yuva Jan Jagruit Party, a registered political party. 2

ITA No. 3097/Mum/2026; Aditya Sushil Damani 6. On the facts and in the circumstances of the case and in law, Ld CIT(A) erred in appreciating that even otherwise, the order passed by the Ld. AO is bad in law.” 2. The brief facts of the case are that the assessment u/s. 147 r.w.s. 143(3)

was completed on 24.12.2024 enhancing the return income of the assessee from

Rs. 31,22,060/- filed u/s. 148 of the Act to Rs. 35,22,060/-. The sole disallowance

from the claims of the assessee was on account of deduction u/s. 80GGC of the

Act for Rs. 4,00,000/-. The assessee has claimed a deduction u/s. 80GGC on

account of donation made to Yuva Jan Jagriti Party. However, as per Ld. AO the

said party was directly involved in bogus donation scheme and same

transactions. The Ld. AO also discussed the modus operandi of the aforesaid

political party, who receives the donations through cheques and then the

amount is paid back to the concerned doner through the help of intermediaries

after deducting the commission within the range of 3.5% to 5%. It is also

observed by Ld. AO that the Yuva Jan Jagriti Party has not filed any contribution

report u/s. 29C of RP Act of 1951 since F.Y. 2017-18 onwards. The ex-President

and present President of the said party, along with agent in their statements on

oath had admitted that the party is actively involved in bogus donation scheme.

It is observed that such statements were not retracted by the concerned persons

also they have not made any compliance towards notices u/s. 133(3).

unable to convince, therefore, the appeal of assessee has been dismissed. To

ITA No. 3097/Mum/2026; Aditya Sushil Damani challenge the aforesaid decision, the assessee is in appeal before us against the

impugned order.

to agitate on Ground No. 4 of the appeal regarding approval u/s. 151(ii) of the

Act which in present case ought to have been obtained from the Principal Chief

Commissioner or Principal Director General, whereas the approval was obtained

u/s. 151 clause 1 of the Act from the Principal Commissioner of Income Tax. As

per the submission that on these legal premises itself order passed u/s. 147 r.w.s

143(3) dated 24.12.2024 is non-est and bad in law which is liable to set aside/

quashed. On this aspect, the Ld. AR placed his reliance on several decisions out

of which one in the case of Kartick Suresh Chandra Gandhi Vs. NCLT (Bombay

High Court) in writ petition no. 1812 of 2023, which is decided by Hon’ble

Bombay High Court on 1st August, 2023. Hon’ble Bombay High Court had

discussed the identical issue for assessment year 2019-2020, akin to the

assessment year in present case and has held that the approval has to be

according to time limits prescribed u/s. 149(1)(b) of the Act, if the re-opening is

initiated after more than three years but not more than ten years, the specified

approving authority would be governed by the provisions of Section 151 of the

Act. If it is not in accordance with the provisions of section 151, then the order

ITA No. 3097/Mum/2026; Aditya Sushil Damani passed u/s. 148A(d) and notice issued u/s. 148 of the Act have to be quashed

and set aside.

under:

authorities. We have considered the rival submissions and perused the materials

available on record and case law relied upon by the assessee. On perusal of

documents in the present case, we find that the order u/s. 148 in the present

case was passed on 7th April, 2023 for the assessment year 2019-20. Thus,

undisputedly it was beyond three years. The approval, thus, was supposed to be

obtained from the specified authority as per section 151(ii) of the Act. The front

page of order u/s. 148A(d) is extracted hereunder for the sake of completeness

of facts.

ITA No. 3097/Mum/2026; Aditya Sushil Damani

ITA No. 3097/Mum/2026; Aditya Sushil Damani 5. According to the aforesaid order, it was passed on 07.04.2023 and the

sanction was accorded by specified authority PCIT, Mumbai-42, on 7th April,

2023, which too is beyond three years from the end of the relevant assessment

year. Such approval cannot be treated as valid approval in terms of settled

principles of law by the Hon’ble Jurisdictional High Court and the decision of

ITAT, Mumbai in cases referred to supra. In view of such facts and circumstances,

the order passed u/s. 148A(d) on the strength of approval from specified

authority under the provisions of section 151(i), which is not the right specified

authority in terms of limitations prescribed u/s. 149 of the Act and whereas the

correct specified authority as per section 151(ii) is PCCIT, therefore, the order

u/s. 148A(d) and a notice u/s. 148 both being issued or passed beyond three

years from the relevant assessment year, sanctioned by the authority other than

the prescribed authority under the statute, stands at nullity, are liable to set

aside and have to be quashed. Further, the assessment framed on the

foundation of such null and void order u/s. 148A(d) vide impugned assessment

order u/s. 147 r.w.s. 143(3) dated 24.12.2024 cannot survive.

the notice u/s 148. The ground of appeal no. 4 of the assessee is, therefore,

allowed.

ITA No. 3097/Mum/2026; Aditya Sushil Damani 7. Since, the legal ground of the assessee has been allowed by us and we

have directed to quash the impugned assessment order u/s. 147 r.w.s. 143(3),

the entire substantive quantum addition/disallowance gets vacated and there is

no further grievance of the assessee in terms of quantum additions. We,

therefore, are not inclined to deliberate on the other grounds of appeal raised

by the assessee in present appeal, which are rendered to be academic.

Order pronounced in the open court on 29-06-2026.

Sd/- Sd/- (SMT. BEENA PILLAI) (ARUN KHODPIA) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai, Dated : 29-06-2026. Soumili Das, PS

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT BY ORDER,

(Dy./Asstt. Registrar) ITAT, Mumbai