INCOME TAX OFFICER WARD 6(1)(1), MUMBAI, MUMBAI vs. ASIAN BOILER ENGINEERS PVT LTD, MUMBAI

PDF · subscribers
ITA 9389/MUM/2025Status: DisposedITAT Mumbai01 June 2026AY 2016-177 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the approval obtained by the Assessing Officer for issuing the reassessment notice under Section 148 was not in accordance with Section 151 of the Act. This was because the notice was issued beyond three years from the relevant Assessment Year, requiring approval from a higher authority than what was obtained.

What were the facts?

The Revenue appealed against an order that deleted an addition made by the Assessing Officer. The addition was based on a Joint Development Agreement (JDA) considered a 'transfer' for capital gains tax. The assessee filed a cross-objection challenging the validity of the reassessment notice.

What were the issues?

The primary issue was the validity of the reassessment proceedings due to improper approval obtained for issuing the notice under Section 148, which was challenged on jurisdictional grounds.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 151,Section 2(47),Section 45

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: HON’BLE SHRI PAWAN SINGH & HON’BLE SHRI GIRISH AGRAWAL

For Respondent: Shri Surendra Mohan, Sr. DR
Pronounced: 01.06.2026

Heard together (2 matters)

ITA 9389/MUM/2025
CO 124/MUM/2026

Read from the judgment's own cause title. This page is filed under one of them.

आदेश / ORDER PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

This appeal filed by the Revenue and Cross Objection by the assessee are against the order of ld. CIT(A)/National Faceless Appeal Centre vide DIN: ITBA/NFAC/S/250/2025-26/1082099666(1) dated 29.10.2025 passed against the assessment order by the Assessment Unit of the Income Tax Department, u/s 147 read with section 144B of the Income-tax Act (hereinafter referred to as the “Act”), dated 23.05.2023, for the Assessment Year 2016-17.

2.

Department has raised the following grounds of appeal:

1.

On the facts and in law, the Ld. CIT(A) erred in deleting the addition by holding that the JDA did not constitute a "transfer," failing to appreciate the ruling of the Hon'ble Supreme Court in Seshasayee Steels (P) Ltd. vs. ACIT, which holds that a transaction enabling the "enjoyment of immovable property" constitutes a transfer under Section 2(47)(vi), regardless of whether "possession" was handed over under Section 53A of the ТРА. 2. The Ld. CIT(A) erred in law by failing to apply the ratio of CIT vs. Balbir Singh Main wherein the Apex Court emphasized the broad scope of Section 2(47) in capturing transactions that involve the shifting of economic enjoyment of property. 3. The Ld. CIT(A) erred in law by ignoring the "domain and control" principle laid down by the Hon ble Bombay High Court in Chaturbhuj Darkadas Kapadia vs. CIT, which stipulates that the date of the JDA is the date of transfer if it authorizes the developer to undertake development activities. 4. On the facts and in law, the Ld. CIT(A) erred in relying on PCIT vs. Fardeen Khan (2018), failing to appreciate that the said decision is distinguishable and stands superseded by the 'Enabling Enjoyment' doctrine of the Hon'ble Supreme Court in Seshasayee Steels (P) Ltd. (2020) and the Ld. CIT(A) failed to recognize that the grant of irrevocable development rights for a commercial mall constitutes a transfer of 'Domain and Control' under Section 2(47) (vi), regardless of the nomenclature of a 'license' used in the JDA. 5. The Ld. CIT(A) erred in law by effectively allowing the benefit of Section 45(5A) to the assessee for AY 2016-17, despite the fact that this section is prospective and applies only from AY 2018-19 onwards. 6. The Ld. CIT(A) erred in law by dismissing the addition on the ground of "double taxation," failing to recognize that the primary obligation is to tax the

ITA 9389/Mum/2025 and CO 124/Mum/2026 Asian Boiler Engineers Pvt Ltd AY 2016-17 income in the correct assessment year (AY 2016-17) as per the mandatory charging provisions of Section 45. 7. The Ld. CIT(A) e daltinin t hadstaticae on th apert of the secion 14 notice, vs. Rajeev Bansal (2024).

2.1. Assessee has raised the following grounds in its Cross appeal:

1.

On the facts and in law, the Ld. CIT(A) erred in failing to appreciate that the impugned notice issued under Section 148 of the Act dated 27/07/2022 is bad in law, as the same has been issued in gross violation of Section 151 of the Act. The Ld. Assessing Officer has obtained approval under Section 151(i) of the Act from the Pr. Commissioner, whereas the case of the assessee pertains to reopening beyond a period of three years from the end of the relevant Assessment Year. Accordingly, the Ld. Assessing Officer ought to have obtained approval under Section 151(ii) of the Act from the Pr. Chief Commissioner of Income Tax prior to issuance of the said notice. Thus, the approval granted by an incompetent authority constitutes a jurisdictional defect going to the root of the matter, and consequently, the impugned Notice issued pursuant to such invalid approval is liable to be held as bad in law.

3.

From the above, we note that in the cross objections filed by the assessee, it has raised jurisdictional issues whereby the approval obtained by ld. AO for issuing notice u/s 148 dated 27.07.2022 is bad in law, in terms of provisions contained in Sec. 151 as it is not by the specified authority. Since the ground of cross objection by the assessee goes to the roots of the matter, we first take up the cross objection for adjudication.

4.

Brief facts as culled out from the records are that assessee filed its return of income on 13.10.2016, reporting total income at Rs. 10,36,570/-. Case was subsequently re-opened on the grounds that assessee had entered into a Joint Development Agreement (JDA) with Arihant Vastu Nirman P Ltd on 30.12.2015 for the construction of a mall. As per the terms of the JDA, assessee was the owner of the land, and Arihant Vastu Nirman P Ltd acted as the developer. Assessee transferred possession of the land/property to the developer. Under these circumstances, the development agreement was considered a

ITA 9389/Mum/2025 and CO 124/Mum/2026 Asian Boiler Engineers Pvt Ltd AY 2016-17 "transfer" within the meaning of Section 2(47)(v) of the Act, rendering the assessee liable for capital gains tax on the transaction. Proceedings u/s. 147 and 148A were initiated, with order u/s. 148A(d) passed on 27.07.2022 and a notice u/s. 148 issued on the same date.

5.

We note that reasons to believe were recorded for initiating the reopening of proceedings and issuance of notice u/s.148, which was issued on 23.06.2021. Since this notice was issued under the erstwhile regime of re-assessment as provided u/s.148 r.w.s. 147 which has undergone total revamp by the Finance Act, 2021, the amendments brought in by the Finance Act 2021 led to several jurisdictional issues in respect of reassessment proceeding for which the matter travelled up to the Hon'ble Supreme Court with the lead case of Union of India vs. Ashish Agarwal [2022] 130 taxmann.com 64 (SC), followed by the decision in the case of Union of India vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC). As a fall out of the directions given in the case of Ashish Agarwal (supra), ld. Assessing Officer in the present case complied with the same, after which an order u/s.148A(d) was passed dated 27.07.2022, recommending the reopening of the case u/s.148.

6.

We have heard both the parties on their submissions relating to legal ground. We have also perused the judicial precedents relied upon for which relevant judicial orders are placed on record. We note that an order u/s. 148A(d) was passed by Income Tax Officer, Ward-6(1)(1), Mumbai, dated 27.07.2022 recommending the re-opening of the case u/s. 148, wherein, in para-11, it is noted that prior approval of PCIT-6, Mumbai was obtained. Similarly, on the notice issued u/s 148 dated 27.07.2022, in para-3 mentions about the prior approval obtained from PCIT-6, Mumbai.

ITA 9389/Mum/2025 and CO 124/Mum/2026 Asian Boiler Engineers Pvt Ltd AY 2016-17 7. On the above stated factual position, the issue contended before us is no longer res integra, dealt by plethora of decisions by the Coordinate Benches as well as by Hon'ble Jurisdictional High Court of Bombay in the case of Alag Property Construction Pvt. Ltd. ACIT [2025] 179 taxmann.com 578 (Bom). Hon'ble Court while dealing with this issue, by taking cognizance of the decision of the Hon'ble Court in the case of Union of India vs. Ashish Agrawal [2022] 138 taxmann.com 64 (SC) and in the case of Union of India vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC) notes the factual position of its case in para – 9 and 10 reproduced as under: “9. In the present case, the period of three years from the end of the A.Y. 2017-18 fell for completion on 31 March 2021. As the expiry date fell during the time period of 20th March 2020 and 31st March 2021, under Section 3(1) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (for short "TOLA"), the authority specified under Section 151(f) of the new regime could have granted sanction only till 30th June 2021. 10. On perusal of the order dated 18.08.2022, passed under Section 148A(d) of the Act we find that the aforesaid order was passed after taking approval from Principal Commissioner of Income Tax (Respondent No.2). Since the aforesaid order was passed, as well as the notice under section 148 was issued, after the expiry of three years from the end of A.Y. 2017-18, as per the substituted provisions of re-assessment, the authority specified under Section 151(ii) of the Act (i.e. Principal Chief Commissioner or Chief Commissioner) was required to grant approval. Accordingly, we conclude that in the present case, the approval has been obtained from the authority specified under Section 151(1) of the new regime instead of the authority specified under Section 151(ii) of the new regime.” 7.1. These facts are similar to the present case before us which have already been narrated in the above paragraphs. Hon'ble Court concluded that where order u/s. 148A(d) was passed beyond three years from the relevant Assessment Year and approval was obtained from Principal CIT instead of the required authority prescribed u/s. 151(ii), non-compliance of such statutory mandate and time limits vitiates the jurisdiction of Assessing Officer rendering the said order u/s. 148A(d) and notice u/s.148 liable to be quashed. Relevant observations and findings in this regard from the said judgement are extracted below: “11. The Hon'ble Supreme Court in the above case has drawn an illustration in para 78 of its order in the context of A.Y. 2017-18 (which is also the relevant

ITA 9389/Mum/2025 and CO 124/Mum/2026 Asian Boiler Engineers Pvt Ltd AY 2016-17 Assessment year in the present Writ Petition) wherein it is categorically held that the authority specified under section 151(f) can accord sanction only upto 30.06.2021. This illustration makes it absolutely clear that when the period of three years from end of relevant Assessment Year expired between 20.03.2020 and 31.03.2021, the extension by virtue of TOLA was upto 30.06.2021 and not beyond. Thus, it can be said that the period of three years from the end of the relevant Assessment Year (in the present case A.Y. 2017-18) expired on 30.06.2021, whereas Respondent No.1, despite passing order under section 148A(d) on 18.08.2022, and issuing notice under section 148 on 23.08.2022 [in respect of Assessment Year 2017 18], has obtained approval of Respondent No.2 who is not the authority as prescribed under section 151(ii). 12. Non-compliance by Respondent No.1 with the provisions contained in Section 148A(d) read with Section 151(4) vitiates the jurisdiction of Respondent No.1 to issue a notice under Section 148 of the Act. 13. We are clearly of the view that the present matter stands covered by the decision of Hon'ble Supreme Court in the case of Rajeev Bansal (supra) and we are bound by it. Accordingly, we hold that the order dated 18.08.2022 passed under Section 148A(d) of the Act and the consequential notice issued under section 148 dated and 23.08.2022 are bad in law, and hence, are required to be quashed and set aside. 14. We accordingly set aside the impugned order dated 18.08.2022 passed under Section 148A(d) of the Act and the consequential notice issued under section 148 dated 23.08.2022, and all other proceedings/orders emanating therefrom. 15. Rule is made absolute in the aforesaid terms and the Writ Petition is also disposed of in terms thereof. No order as to costs. 16. This order will be digitally signed by the Private Secretary/ Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order.”

8.

Keeping in juxtaposition the undisputed and uncontroverted facts as stated above and the judicial precedent of the Hon'ble Supreme Court in the case of Ashish Agarwal and Rajiv Bansal (supra) as well as that of Hon'ble jurisdictional High Court of Bombay in the case of Alag Property Construction Pvt. Ltd. (supra), we hold that sanction by specified authority has not been obtained by the ld. Assessing Officer in accordance with the provisions contained in section 151 of the Act under the new regime, since notice u/s.148 has been issued beyond three years from the end of the relevant Assessment Year. Accordingly, the said notice issued is invalid and thus quashed. Resultantly, the impugned re-opening proceedings so initiated and the impugned re-

ITA 9389/Mum/2025 and CO 124/Mum/2026 Asian Boiler Engineers Pvt Ltd AY 2016-17 assessment order passed thereafter are also quashed. Ground in this regard raised by the assessee in its cross objection is allowed.

9.

Since the jurisdictional issue raised by the assessee in the cross objection is held in its favour, grounds raised on the merits by the Revenue in its appeal needs no separate adjudication.

10.

In the result, cross objection filed by the assessee is allowed and appeal filed by the Revenue is dismissed.

Order is pronounced in the open court on 01.06.2026

Sd/- Sd.- (Pawan Singh) (Girish Agrawal) Judicial Member Accountant Member Dated: 01.06.2026 MP, Sr.P.S. Copy to: 1 The Appellant 2 The Respondent 3 DR, ITAT, Mumbai 4 Guard File 5 CIT BY ORDER,

(Dy./Asstt.Registrar) ITAT, Mumbai

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →