SANTOSH KISAN BHOSALE,SATARA vs. ITO, WARD 2, SATARA, SATARA

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ITA 2032/PUN/2026Status: DisposedITAT Pune24 August 2026AY 2017-187 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the notice under Section 148 was bad in law because it was approved by the wrong authority, as per Section 151 of the Act. It also found that the notice was issued beyond the prescribed surviving period.

What were the facts?

The assessee's appeal concerns AY 2017-18. The primary issue is the validity of the notice issued under Section 148, which was approved by the Principal Commissioner instead of the Principal Chief Commissioner, as required for notices issued more than three years after the end of the assessment year.

What were the issues?

Whether the notice under Section 148 was validly issued considering the approval authority and the time limit for issuance.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 151,Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE

Before: SHRI PAVAN KUMAR GADALE & SHRI Dr. DIPAK P. RIPOTE

For Appellant: Shri Suhas Kulkarni
For Respondent: Ms. Bhavya. I.V., Jt. CIT

आदेश /ORDER

PER Dr. DIPAK P. RIPOTE, A.M : This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), NFAC, Delhi [Ld.CIT(A)], passed u/s. 250 of the Income Tax Act, 1961 („the Act‟) for AY 2017-18 on 09.02.2026, emanating from the Assessment Order u/s 147 r.w.s. 144 r.w.s 144B of the Act, dated 25.05.2023.

Submission of Ld. AR :

2.

The Ld. AR submitted that the notice u/s 148 dated 22.07.2022 for AY 2017-18 has been approved by the Pr. Commissioner of Income Tax. The Ld. AR submitted that since the notice u/s 148 of the Act was issued after a lapse of 3 years from the end of the assessment year, the approval of Pr. Chief Commissioner of Income Tax was required as per section 151 of

ITA No. 2032/PUN/2026 the Act. The Ld. AR submitted that therefore the notice u/s 148 of the Act is bad in law. The Ld. AR relied on the decision filed in the paper book. The Ld. AR also submitted that as per calculation of surviving period provided by the Hon‟ble Supreme Court in the case of Union of India Vs. Rajeev Bansal in Civil Appeal No. 8629/2024 order dated 03.10.2024, the notice u/s 148 has been passed beyond the period of surviving time. Hence, it is bad in law. The Ld. AR relied on the decisions filed in the paper book.

Submission of Ld. DR :

3.

The Ld. DR relied on the order of the Ld. Assessing Officer (AO) and the Ld. CIT(A).

Findings and Analysis :

4.

We have heard both the parties and perused the records. Bothe the parties have pleaded only the legal grounds.

4.1 The notice u/s.148 for A.Y. 2017-18 was issued on 22.07.2022 with the approval of Pr. Commissioner of Income Tax.

4.2 Thus, it is an admitted fact that notice u/s.148 and order u/s.148A(d) of the Act was passed with the approval of Pr. Commissioner of Income Tax for A.Y.2017-18.

4.3 Section 151 of the I.T. Act is reproduced here as under : “[Sanction for issue of notice. 151. Specified authority for the purposes of section 148 and section 148A shall be,—

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(i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year; (ii) Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year.]”

5.

In this case, it is an admitted fact that more than three years have lapsed from the end of the Assessment Year. Therefore, as per Section 151 of the Act, the Competent Authority to approve the notice u/s.148 and order u/s. 148A(d) of the Act, is the Ld. Principal Chief Commissioner of Income or Ld. Chief Commissioner of Income Tax. However, in this case, notice has been approved by ld. Principal Commissioner of Income Tax.

5.1 The Hon‟ble Jurisdictional High Court in the decision of Holiday Developers (P.) Ltd, Vs. ITO [2024] 159 taxmann.com 178 (Bombay) dated 29.01.2024 has held as under : Quote “1. Petitioner is impugning a order under section 148A(d) and the notice, both dated 7th April 2022 passed under section 148 of the Income Tax Act, 1961 ("Act"). Of-course Petitioner has also impugned the notice dated 17th March 2022 issued under section 148A(b) of the Act. Various grounds have been raised but one of the primary grounds for challenging the notice under section 148A(d) and the notice under section 148 of the Act both dated 7th April 2022 is that order as well as the notice both mention the authority that has granted approval, is the Principal Commissioner of Income Tax ("PCIT"), Mumbai 5 and the approval has been granted on 7th April 2022. 2. Mr. Gandhi is correct in saying that the Assessment Year ("AY") is 2018-19 and, therefore, since more than three years have expired from the end of the assessment year, Sanctioning Authority under section 151(ii) of the Act should be the Principal Chief Commissioner of Income Tax ("PCCIT") and not the PCIT. Mr. Gandhi says, as held in Siemens Financial Services (P.) Ltd. v. Dy. CIT [2023] 154 taxmann.com 159/457 ITR 647 (Bom.),the sanction is invalid and

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consequently, the order and the consequent notice under section 148A(d) and section 148, respectively, of the Act should be quashed and set aside. 3. In view of these facts and circumstances, we do not see any reason to just grant Rule and keep the matter pending. 4. As held in Siemens (Supra), the order passed under section 148A(d) and notice issued under section 148 of the Act both are quashed and set aside.” Unquote.

5.2 The Hon‟ble Jurisdictional High Court in the case of Agnello Oswin Dias Vs. ACIT [2024] 161 taxmann.com 16 (Bombay) has held as under : “4. The impugned order and the impugned notice both dated 22nd 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 22nd April 2022, both have been issued beyond a period of three years. Therefore, the sanctioning authority has to be the PCCIT as provided under Section151(ii) of the Act. The proviso to Section 151 of the Act has been inserted only with effect from 1st April2023 and, therefore, shall not be applicable to the matter at hand. 5. In the circumstances, as held by this Court in Siemens Financial Services (P.) Ltd. v. Dy. CIT [2023] 154taxmann.com 159/457 ITR 647 (Bom.), 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.”

5.3 ITAT Pune in the case of Hareshkumar Dungarmal Jain vs. DCIT in ITA No.1933/PUN/2024, quashed the Notice u/s.148 of the Act, dated 13.04.2022 for A.Y.2018-19.

6.

In the above referred decision, the assessment year involved is A.Y.2018-19 and order under section 148A(d) of the Act, was passed on 22.04.2022. In the case of the assessee, the assessment year is A.Y. 2017-18 and order under section

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148A(d) of the Act, is dated 22.07.2022. Therefore, the facts are absolutely identical. Hence, respectfully following the decision of Hon‟ble Bombay High Court (supra) and ITAT Pune (supra), the order under Section 148A(d) of the Act, and notice under section 148 are quashed. Accordingly, the Ground No.2 raised by the assessee is allowed.

7.

On the issue of surviving period, the calculation filed by the Ld. AR and accepted by the Ld. DR is as under :

8.

We find identical issue has been decided by ITAT, Pune in the case of Madhukar Chandrakant Survase in ITA Nos. 2114 & 2118/PUN/2024, dated 14.07.2026. The relevant paragraphs of the said order are as under : “17. Respectfully following the above judgement of Hon’ble Bombay High Court in the case of Gurpreet Singh (supra), we are of the considered opinion that if the original notice u/s 148 of the IT Act was issued between 01.04.2021 to 30.06.2021 by taking the benefit of TOLA and fresh notice u/s 148 of the IT Act was issued beyond the surviving time period, it is required to be declared as invalid and bad in law. Accordingly, now in the light of above judgement (supra), we proceed to verify that whether the impugned fresh notice u/s 148 of the IT Act dated 26.07.2022 was issued within the surviving time period or beyond the surviving time period. In order to compute the

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surviving/balance time as per the decision of the Hon’ble Bombay High Court in the case of Gurpreet Singh (supra), it is relevant to note the following dates: -

18.

From the perusal of above chart, it is apparent that last date upto which fresh notice u/s 148 of the IT Act could have been issued was 24.06.2022, whereas the impugned fresh notice u/s 148 of the IT Act in the instant case was issued on 26.07.2022 which is admittedly beyond the surviving time limit as prescribed by Hon’ble Supreme Court in the case of UOI vs. Rajeev Bansal (supra) and also in the light of decision of Hon’ble Bombay High Court in the case of Gurpreet Singh (supra). Accordingly, we are of the considered opinion that the impugned notice u/s 148 of the IT Act dated 26.07.2022 was time barred since issued beyond the time limit prescribed under the Income Tax Act.

19.

In view of our above discussion, we find force in the additional ground raised by the assessee and accordingly declare the impugned notice dated 26.07.2022 issued u/s 148 of the IT Act as void ab initio and bad in law. Therefore, the same is quashed. Consequently, the entire re-assessment proceedings and assessment order passed u/s 147 r.w.s. 144 of the IT Act for assessment year 2017-18 are also quashed. Since we have already allowed the cross objection on additional ground, the other grounds raised by the assessee becomes academic hence not adjudicated.

20.

In the result, the Cross Objection no.38/PUN/2024 for A.Y. 2017- 18 filed by the assessee is allowed.”

ITA No. 2032/PUN/2026

9.

Thus, respectfully following the ITAT decision in the case of Madhukar Chandrakant Survase (supra) with respect to surviving period, we hold that notice u/s 148 dated 22.07.2022 has been issued beyond the surviving period, hence, it is bad in law.

10.

Since, notice u/s 148 of the Act is bad in law, the consequential assessment order is void-ab-initio. Accordingly, legal grounds raised by the assessee are allowed. Grounds raised on merits of the addition have not been pleaded, hence dismissed as un-adjudicated.

11.

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

Order pronounced in the open Court on 24th August, 2026

Sd/- Sd/- (PAVAN KUMAR GADALE) (Dr. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER

पुणे/Pune; दिन ांक/Dated : 24-08-2026 Ravi Kumar Digitally signed by Ravi Kumar Ravi Kumar Date: 2026.08.25 12:40:01 +05'30' आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent 3. The concerned Pr. CIT, Pune 4. DR, ITAT, „B‟ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अदिकरण,पुणे / ITAT, Pune

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