M/S KCR AGRI IMPEX ,MUMBAI vs. INCOME TAX OFFICER WARD 1(1), THANE

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ITA 2733/MUM/2026Status: DisposedITAT Mumbai25 May 2026AY 2018-197 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 reassessment proceedings were invalid because the approval for reopening the assessment beyond three years was granted by the PCIT, which is not the specified authority under Section 151(ii) of the Act. Consequently, the assessment order based on this invalid notice is liable to be quashed.

What were the facts?

The assessee's reassessment proceedings were initiated beyond three years from the end of the assessment year. The approval for reassessment was obtained from the Principal Commissioner of Income Tax (PCIT) instead of the Principal Chief Commissioner of Income Tax (PCCIT).

What were the issues?

Whether reassessment proceedings initiated beyond three years are valid when approval is granted by PCIT instead of PCCIT. Whether an assessment order based on an invalid notice under Section 148 is sustainable.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 148A,Section 151,Section 69C,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: SMT. BEENA PILLAI, JM & SHRI ARUN KHODPIA, AM

Hearing: 25.05.2026

आयकरअपीलीयअिधकरण�ायपीठमुंबईम�। IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI, JM & SHRI ARUN KHODPIA, AM I.T.A. No.2733/Mum/2026 (Assessment Year: 2018-19) M/s. KCR Agri Impex Income Tax Officer Ward 1(1) C/o-Incorp Advisory Services Wagle Estate, Thane, Mumbai-400604 Private Limited, 2nd Floor, Gita Vs. Building, Sion Circle, Mumbai- 400022 PAN: AARFK0375P Assessee- अपीलाथ� / Appellant Revenue-��थ�/ Respondent :

Assesseeby : Shri Margav Shukla : Smt. B. Brahma Vidya – Sr. DR Revenueby : 12.05.2026 Date of Hearing : 25.05.2026 Date of Pronouncement

O R D E R Per Arun Khodpia, AM: This appeal is preferred by the assessee, directed against the order of the Commissioner of Income Tax Appeals, NFAC Delhi [in short, “the Ld. CIT(A)”], dated 12.01.2026for the assessment year 2018-19, resulted from the assessment order under section 147 r.w.s 144 of the Income Tax Act, 1961 [in short, “the Act”] dated 22.03.2024, passed by Assessment Unit, Income Tax Department [in short, “the Ld.AO”].The grounds of appeal raised by the assessee, are as under:

ITA No. 2733/Mum/2026 M/s. KCR Agri Impex “On the given facts and circumstances of the case, Ld. NFAC erred in confirming the reassessment proceedings, despite the fact that the same is time barred. Such reassessment proceedings which is beyond the time limit is liable to be quashed. On the given facts and circumstances of the case, Ld. NFAC erred in upholding the reassessment without valid approval under section 151. Such reassessment without valid approval is bad in law and liable to be quashed. On the facts and circumstances of the case, learned NFAC erred in confirming the addition under section 69C on Sale Transaction of Assessee. Such confirmation of addition under section 69C is bad in facts and in law and liable to be deleted Without prejudice to the above, On the facts and circumstances of the case learned NFAC, erred in ignoring the fact that the sale amount was already credited in the books and offered to tax. Such addition under section 69C is bad in fact and liable to be deleted.” 2. The assessment of assessee was completed u/s 147 r.w.s 144 of the Act making therein an addition of Rs.19,18,880/- on account of bogus purchases made by the assessee. The issue was carried before the Ld. CIT(A) who had decided the appeal of assessee by dismissing the same accepting the findings of Ld. AO.

3.

The assessee is, therefore, in appeal before us against the impugned order of Ld. CIT(A) dated 12.01.2026.

4.

At the outset, Ld. AR of the assessee submitted that the assessment in the present case has been re-opened beyond three years from the end of the assessment year and the prior approval was obtained from PCIT Thane, as evident in the notice u/s 148A(b) dated 22.03.2022. Further, the final order u/s 148A(d) was passed on 5th April, 2022 after obtaining the approval of specified authority that is PCIT Thane -1 vide Reference No.100000028753477 dated

ITA No. 2733/Mum/2026 M/s. KCR Agri Impex 01.04.2022, apparent on the face of order u/s 148A(d) dated 05.04.2022 placed at page no. 3 of assessee’s paper book.

5.

With reference to aforesaid facts, it was the submission by Ld. AR that the order u/s 148A(d), vitiates in the eyes of law as the same was passed without a valid approval, in terms of provisions of section 151 of the Act. As per provisions of clause (ii) to section 151, the specified authority for the purpose of sanction u/s 148A for re-opening assessment u/s 147 after three years from the end of relevant assessment year, is Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General and not the Principal Commissioner of Income Tax. Ld. AR placed his reliance on the decision of ITAT Mumbai in the case of Shankeshwar Exim Llp,Mumbai vs ITO - 19(3)(1), Mumbai vide order dated5th December, 2025, wherein the issue has been decided in favour of the assessee following the decision of Hon’ble Bombay High Court in the case of M/s.Vodafone Idea Limited Vs. DCIT (WP No. 2768 of 2022 dated 06.02.2024)wherein on the identical issue, Hon’ble High Court has held as under: “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 3

ITA No. 2733/Mum/2026 M/s. KCR Agri Impex 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 7 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 provisio 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 circumstance, 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 setaside.”

6.

Having considered the aforesaid analogy drawn by Hon’ble Jurisdictional High Court, if the order u/s 148A(d) and the final notice u/s 148 are issued beyond three years from the end of the relevant assessment year, the specified authorities would be PCCIT and not PCIT. In the present case, as the approval was granted by PCIT Thane -1, which is not in accordance with the mandate of law and further clarified by the Hon’ble Jurisdictional High Court in the case of Vodafone Idea Limited (supra.). The notice u/s 148 issued in the present case was in contravention of the mandate of law and, therefore, cannot be treated as a valid notice. The consequential assessment based on the foundation of such invalid notice, thus, would be liable to be quashed. 7. Per contra, Ld. DR vehemently supported the orders of Revenue Authorities.

ITA No. 2733/Mum/2026 ITA No. M/s. KCR Agri Impex M/s. KCR Agri Impex 8. We have considered the rival submissions, perused the material available We have considered the rival submissions, perused the material available We have considered the rival submissions, perused the material available on record and the case laws relied upon by the assessee. Admittedly, in present on record and the case laws relied upon by the assessee. Admittedly on record and the case laws relied upon by the assessee. Admittedly case, the order u/s 148A(d) was issued after three years from the end of relevant case, the order u/s 148A(d) was issued after three years from the end of relevant case, the order u/s 148A(d) was issued after three years from the end of relevant assessment year, the relevant extract of said notice is as under: e relevant extract of said notice is as under:

9.

We are concerned with the assessment year 2018 e are concerned with the assessment year 2018-19 and the 19 and the order u/s 148A for re-opening of assessment was issued on 05.04.2022, after three years opening of assessment was issued on 05.04.2022, after three years opening of assessment was issued on 05.04.2022, after three years i.e., after 31st March, 2022. March, 2022. Therefore, the specified approving authority as per roving authority as per provisions of section 151(ii) is provisions of section 151(ii) is PCCIT and equivalent (referred to supra) and equivalent (referred to supra), had granted the approvalon 1st April, whereas, in the present case PCIT Thane present case PCIT Thane had granted the approval 2022, who cannot be the specified specifiedauthority. The approval therefore found to be . The approval therefore found to be 5

ITA No. 2733/Mum/2026 M/s. KCR Agri Impex invalid and void, which in turn invalidates the sanctity of order u/s 148A and the notice u/s 148 issued on 5th April, 2022, having issuedin contravention of the mandate of law and settled principles in terms of judgment of by Hon’ble Bombay High Court in the case of M/s. Vodafone Idea Limited (supra.)

10.

We thus, in terms of our aforesaid deliberations, are of the considered opinion that the notice u/s 148 in the present case cannot sustain in the eyes of law, being issued in violation of the provisions of section 151(ii) of the Act. Consequently, the assessment order dated 22.03.2024 impugned in the present case, passed on the foundation of notice u/s 148 dated 5th April, 2022,become void and is liable to be quashed. We direct accordingly.

11.

In result, appeal of assessee stands allowed in terms of our above observations. Order pronounced in the open court on 25-05-2026.

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

Mumbai, Dated : 25-05-2026. Ankit K., Sr. PS

ITA No. 2733/Mum/2026 M/s. KCR Agri Impex

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

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