HEMANG AGENCY (P) LTD.,,KOLKATA vs. ITO, WARD 5(1), KOLKATA, KOLKATA

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ITA 1989/KOL/2026Status: DisposedITAT Kolkata24 August 2026AY 2018-20196 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice under Section 148 was issued beyond three years from the end of the assessment year. As per Section 151, approval for such issuance should have been granted by the PCCIT, not the PCIT. Therefore, the reopening and assessment order are invalid.

What were the facts?

The assessee filed a return of income, and the case was selected for reassessment under Section 148A. A notice under Section 148 was issued on 13.04.2022 for AY 2018-19, and an assessment order was passed with an addition of Rs. 20,00,000 under Section 68. The CIT(A) dismissed the assessee's appeal.

What were the issues?

Whether the approval for issuing a notice under Section 148 beyond three years from the end of the assessment year was obtained from the competent authority as per Section 151 of the Act.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 151,Section 68,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH,

Before: SHRI YOGESH KUMAR U.S. & SHRI GOPALAN GURUSAMY

For Appellant: Shri Manoj Kataruka, AR
For Respondent: Shri Ambrish Mishra, DR
Hearing: 04.08.2026Pronounced: 24.08.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, KOLKATA BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI GOPALAN GURUSAMY, ACCOUNTANT MEMBER ITA No.1989/KOL/2026 Assessment Year: 2018-19

Hemang Agency Pvt. Ltd. Vs. ITO, Ward-5(1), Kolkata 23B N.S. Road, West Bengal-700001 [PAN: AACCH8830L] APPELLANT RESPONDENT Appellant by : Shri Manoj Kataruka, AR Respondent by : Shri Ambrish Mishra, DR Date of hearing : 04.08.2026 Date of Pronouncement : 24.08.2026 O R D E R PER YOGESH KUMAR U.S., JUDICIAL MEMBER: This Appeal is filed by the Assessee against the order of the NFAC, Delhi (‘Ld. CIT(A)’ for short) dated 18.05.2026, passed u/s 250 of the Income Tax Act, 1961 (“the Act”, for short) for the Assessment Year 2018-19.

2.

Brief facts of the case are that, Assessee filed return of income declaring total income of Rs.10,730/-. The case of the Assessee was selected for Assessment through an Order u/s 148A of the Act dated 13.04.2022 and notice u/s 148 of the Act came to be issued on 13.04.2022 for the Assessment Year under consideration i.e., Assessment Year 2018-19. Further, an Assessment Order came to be

ITA No.1989/Kol/2026 Hemang Agency Private Limited; A.Y: 2018-19 passed on 14.12.2023 by making an addition of Rs.20,00,000/- u/s 68 of the Act. Aggrieved by the Assessment Order dated 14.12.2023, Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide Order dated 18.05.2026, dismissed the Appeal filed by the Assessee. As Against the Order of the Ld. CIT(A), Assessee preferred the captioned Appeal.

3.

Learned Counsel for the Assessee submitted that the notice issued u/s 148 of the Act dated 13.04.2022 is erroneous as the approval for issuing the said notice has been taken from Ld. PCIT, Kolkata-2, which is the appropriate Authority as per section 151 of the Act. The Learned Counsel further submitted that as per section 151 of the Act as it stood on 01.04.2022 approval for issue of notice u/s 148 of the Act beyond three years from the end of the assessment year lies with the Ld. PCCIT and not the Ld. PCIT. The present Assessment Year being 2018-19, three years from the end of Assessment Year expires on 31.03.2022 and notice u/s 148 of the Act has been issued on 13.04.2022 with the approval of Ld. PCIT, Kolkata-2, which is contrary to the provisions of section 151 of the Act and the Competent Authority for according approval is PCCIT and therefore sought for quashing the Assessment order. The Learned Counsel also relied on the Judgment of the various judicial precedents in support of his contentions. Page | 2

ITA No.1989/Kol/2026 Hemang Agency Private Limited; A.Y: 2018-19 4. Per contra, the DR submitted that the approval has been rightly taken from the Competent Authority and the additions have been made on merits in order to recover the actual due of tax. Therefore submitted that, no interfere is required in the orders of the Lower Authorities, thus sought for dismissal of the Appeal.

5.

We have heard the parties and perused the material available on record. In the present case, the Assessment year being A.Y. 2018-19 and the notice u/s 148 of the Act has been issued on 13.04.2022 which is beyond three years from the end of the Assessment year. As per Section 151 of the Act as it stood on 01.04.2022, the approval has to be granted for issuance of notice u/s 148 of the Act beyond three years from the end of the Assessment year with the prior approval of the Competent Authority i.e., PCCIT. In the present case, three years from the end of Assessment year expires on 31.03.2022 and notice u/s 148 of the Act has been issued on 13.04.2022, therefore, the approval ought to have been granted by Ld. PCCIT and not Ld. PCIT. Since the approval has been obtained by the Ld. PCIT, 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- Page | 3

ITA No.1989/Kol/2026 Hemang Agency Private Limited; A.Y: 2018-19 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.” 6. Similarly, decision of Hon'ble Bombay High Court in case of Vodafone Idea Ltd. Vs. DCIT vide WP No. 2768 of 2022 dated 06.02.2024, wherein it has followed the decision of Agnello Oswin Dias (supra), as under:-

“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. Page | 4

ITA No.1989/Kol/2026 Hemang Agency Private Limited; A.Y: 2018-19 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.” 7. Similarly, in the case of Haresh kumar Dungarmal Jain Vs. DCIT vide ITA No. 1933/PUNE/2024 vide order dated 24.02.2025 & Davos International Fund Vide ITA No. 1190/MUM/2024, dated 13.01.2025 the issue is decided on the similar lines.

8.

Considering the facts and circumstances of the case and also the above decisions, we hereby quash the reopening of assessment as well as the Assessment Order passed the Learned Assessing Officer.

9.

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

Order pronounced on 24.08.2026.

Sd/- Sd/- (GOPALAN GURUSAMY) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 24.08.2026 DP, PS

ITA No.1989/Kol/2026 Hemang Agency Private Limited; A.Y: 2018-19 Copy of the order forwarded to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. CIT(DR) //TRUE COPY// (MANISH BHOI) DEPUTY REGISTRAR ITAT KOLKATA BENCHES, KOLKATA

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