COMPAQ SOLUTION PRIVATE LIMITED,KOLKATA vs. I.T.O.,WARD-6(1), KOLKATA

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ITA 2329/KOL/2025Status: DisposedITAT Kolkata20 May 2026AY 2018-195 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reopening of assessment was invalid as the approval for issuing the notice under Section 148 was obtained from the incorrect authority (PCIT instead of Pr. CCIT) for reassessment beyond three years. Consequently, the notice and the assessment order were quashed.

What were the facts?

The assessee filed its return of income for AY 2018-19. The Assessing Officer (AO) initiated reassessment proceedings under Section 148 after receiving information about a ₹50 lacs transaction. The AO added this amount to the income as unexplained cash credit and also added ₹4 lacs for commission.

What were the issues?

Whether the reassessment proceedings initiated beyond three years were valid when the approval for reopening was granted by an incompetent authority as per Section 151(ii) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 151,Section 68,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

For Appellant: Shri Manoj Kataruka, AR
For Respondent: Shri Pankaj Pandey, DR
Hearing: 22.04.2026Pronounced: 20.05.2026

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 11.09.2025 for the AY 2018-19.

2.

The only issue pressed at the time of hearing by the Counsel of the assessee is against the order of ld. CIT (A) upholding the action of the ld. AO in issuing notice u/s 148 of the Act, which is without jurisdiction and in violation of Section 151(ii) of the Act.

3.

The facts in brief are that the assessee filed the return of income on 11.09.2018. Thereafter, the ld. AO received

4.

The ld. Counsel for the assessee at the outset submitted that the reopening was made by the ld. AO vide notice dated 11.04.2022, under new regime and therefore the reopening was made after expiry of three years from the end of the relevant assessment year. The notice issued u/s 148 of the Act dated 11.04.2022, mentioned that the prior approval has been obtained from the ld. PCIT-Kolkata-2, which was accorded on 11.04.2022, vide reference no. 100000028819405 whereas the approval should have been granted by the PCCIT under new regime. The ld. AR therefore prayed that the approval has been granted invalidly and therefore, the notice issued u/s 148 of the Act as well as the consequent assessment framed is invalid and nullity in the eyes of law.

6.

After hearing the rival contentions and perusing the materials available on record, we find that the assessment was reopened after a period of three years from the end of the relevant assessment year as the notice u/s 148 of the Act was issued on 11.04.2022, whereas the assessment year involved is 2018-19 and thus is apparently the re-opening was beyond three years from the end of the relevant assessment year. Therefore, in term of section 151(ii) of the Act, the approval was required to be taken from the ld. Pr CCIT, whereas the AO has taken approval from ld. PCIT-2, Kolkata. In our opinion, the approval has not been granted by the competent authority as prescribed under section 151(ii) of the Act. Therefore, the notice issued u/s 148 of the Act and consequent assessment are nullity and bad in law. The issue is covered by the decision of Hon'ble Bombay High Court in Writ Petition No.3249 of 2022 in case of Agnello Oswin Dias Vs. ACIT dated 22.02.2024, wherein it has held as under:-

“4. The impugned order and the impugned notice both dated 22 April 2022 state that the Authority that has accorded the sanction is the PCIT, Mumbai- 5. The matter pertains to Assessment Year ("AY") 2018-2019 and since the impugned order as well as the notice are issued on 22 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 of the Act has been inserted only with effect from 1" April 2023 and, therefore, shall not be applicable to the matter at hand. 5. In the 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 22nd April 2022 under Sections 148A(d) and 148 of the Act are hereby quashed and set aside.”

“1. Petitioner is impugning a notice dated 19 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 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 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. 5. Petition disposed. No order as to costs. All rights and contentions are kept open. 6. For completion of record, Respondents are directed to make available to Petitioner copy of the approval form as well as the approval accorded for issuance of order under Section 148A(d) and Section 148 of the Act within one week from this order being uploaded.” 6.2. Similarly, in the case of Haresh kumar Dungarmal Jain Vs. DCIT vide ITA No. 1933/PUNE/2024 vide order dated

7.

Considering the facts and circumstances of the case and also the above decisions, we are inclined to quash the reopening of assessment as well as the assessment order passed the ld. AO.

8.

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

Order pronounced on 20.05.2026.

Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 20.05.2026 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT DR, ITAT, 4. 5. Guard file. BY ORDER, True Copy//

Asst. Registrar Income Tax Appellate Tribunal, Kolkata

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