MRIDULA GARG,GWALIOR vs. DCIT CIRCLE 2, GWALIOR

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA (DB) BENCH, AGRA BEFORE: SHRI S RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER ITA No. 512/Agr/2025 Assessment Year: 2011-12 Mridula Garg, Krishna Bhawan, Vs. DCIT Circle 2(1), Aayakar Naya Bazar, Lashkar, Gwalior- Bhawan, City Centre, Gwalior- 474011 474011 PAN : AKOPG0031D (Appellant) (Respondent) Assessee by Shri Gaurav Goyal, C.A. Department by Shri Harsh Siddharth Gautam, Sr (DR)

Date of hearing 21.04.2026 Date of pronouncement 21.05.2026 ORDER

PER: SUNIL KUMAR SINGH, JM. This appeal has been preferred against the impugned order dated 16.09.2025 passed in Appeal No CIT (A), Gwalior/10375/2018-19 by the ld Commissioner of Income Tax, Visakhapatnam [hereinafter referred to as the “CIT(A)] u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act), for the A.Y. 2011-12, wherein ld CIT(A) has dismissed assessee’s appeal. 2. The brief facts state that assessee filed return of income for the A.Y. 2011-12 on 25.12.2011, declaring total income at Rs. 26,74,479/-. The case was reopened u/s. 147 of the Act on the issue that the assessee sold a land for the consideration of Rs. 33,40,000/-, however, the value of land

ITA No.512/Agr/2025 adopted by the stamp valuation authority was Rs. 58,08,000/-. The A.O. found that the assessee has taken the sale consideration of property as per sale deed and not as per section 50C of the Act. Notice u/s. 148 of the Act was issued on 27.03.2018. Assessee e-filed her return on 16.08.2018, declaring same income of Rs. 26,74,480/-. Statutory notice u/s. 143(2) of the Act was issued and served upon the assessee. Assessee submitted during the assessment proceedings that he relied on a valuation report submitted by Mr. R.S. Gupta, a registered valuer. According to this valuation report, the property in question was shown to be of the value of Rs. 33,35,000/- as on 10.07.2010. However, ld assessing officer computed the income from long term capital gain at Rs. 50,66,600/-, ignoring the valuation report submitted by the register valuer, after adjusting the transfer expense of Rs. 2,20,000/- and index cost of acquisition at Rs. 5,21,400/- vide assessment order dated 17.12.2018. 3. Assessee preferred an appeal before ld CIT(A), who, dismissed assessee’s appeal, confirming the assessment order. 4. Appellant assessee has raised the following grounds under this second appeal: “Ground No. 1: On the facts & in the circumstances of the case the CIT (A) was not Justified in law in upholding validity of notice issued u/s 148 & reopening of assessment. Ground No. 2: That without prejudice to ground No. 1, above the learned CIT (A) was not justified in rejecting registered valuer's report & not taking cognizance of the fatal lapse on the part of the AO not to refer the valuation to Departmental valuation cell as mandated u/s 50 C of the IT. Act & confirming the computation of long term capital gains as made by the AO at Rs. 50,66,600/- as against 2 | P a g e

ITA No.512/Agr/2025 shown by the assesse at Rs. 31,20,000/- Long term Capital gains as shown by the assesse may kindly be accepted. Ground No. 3: The appellant craves leave to add amend, substitute or delete any ground at the time or before hearing of appeal.” Assessee has also raised following two additional legal grounds, which stand admitted:- “4. Because in any view, the assessment order dated 17.12.2018 is erroneous, illegal, and liable to be quashed, as the Assessing Officer failed to provide an adequate and reasonable opportunity of being heard to the assessee during the course of the assessment proceedings. 5. Because in any view, the notice issued u/s 148 and assessment done u/s 147 is illegal and liable to be quashed as no reason was recorded and no approval was obtained before issuing the notice. The copy of reason recorded supplied to the appellant during the reassessment proceedings is undated and not supported by any approval u/s 151.” 5. Perused the records and heard ld representative for the appellant assessee and ld Sr DR for the respondent revenue. 6. Ld AR has pressed legal ground no. 5 by stating that the assessment proceedings have been initiated and completed without obtaining the mandatory sanction of the competent authority/ PCCIT u/s. 151 of the Act. Ld AR has prayed to quash the entire assessment proceedings. 7. Ld Sr DR has submitted that there is a mention in the last line of the notice dated 27.03.2018, issued u/s. 148 of the Act, that this notice was issued only after obtaining necessary satisfaction of the Pr. CCIT(Gwalior), hence, assessee’s submissions are against the facts on record. 8. The additional ground no. 5 raised by the assessee has been admitted due to jurisdictional defect in reopening of the case due to not obtaining the required sanction u/s. 151 of the Act from the sanctioning 3 | P a g e

ITA No.512/Agr/2025 authority. The reassessment proceedings were drawn by assumption of jurisdiction by the assessing officer u/s. 147 of the Act by issuance of notice u/s. 148 of the Act. This ground has two facets-, one, that no reasons were recorded and secondly that no approval was obtained before issuing the notice u/s. 148 of the Act. We shall deal with the second facet first. 9. The copy of the notice u/s. 148 of the Act is at page 10 and assessee’s paper book. This notice was issued on 27.03.2018. It appears from the perusal of assessee’s response dated 17.08.2018, which is at page 13 of assessee’s paper book, that in addition to compliance of filing the Income Tax return in response to the notice u/s. 148 of the Act, assessee also requested the assessing officer to provide reason “to believe” for issuing the notice u/s. 148 of the Act. Thus, the reasons recorded, were not provided to the assessee along with the notice u/s.148 dated 27.03.2018, subsequent thereto. We further notice that the assessee filed the application for admission of the additional grounds before the tribunal on 06.02.2026 and this matter was heard on 21.04.2026. The burden to prove that the approval u/s. 151 of the Act was not obtained from the sanctioning authority before issuance of notice u/s. 148 of the Act, is on the assessee. However, when assessee pleads that the approval required u/s. 151 of the Act, was never granted by the sanctioning authority, the onus shifts on the revenue to show that such approval was in fact obtained before issuance of notice u/s. 148 of the Act. That apart, the reasons 4 | P a g e

ITA No.512/Agr/2025 recorded at page 14 of the assessee’s paper book, are undated. The notice u/s. 148 dated 27.03.2018 at page 10 of the assessee’s paper book, refers in the last line of the notice that “this notice is being issued after obtaining the necessary satisfaction of the Pr. CCIT(Gwalior)” makes no mention of the date of approval and the departmental reference number, which is usually mentioned in the notice u/s. 148 of the Act. It is, therefore, inferred that the assessee was neither given the reasons recorded along with the notice issued u/s. 148 nor the approval was obtained from the sanctioning authority before issuance of notice u/s. 148 of the Act. 10. Ld AR has referred order dated 26.09.2023 passed by Hon’ble Delhi High Court in W.P. (C) 13903/2018, TIA Enterprises Pvt. Ltd. v. Income Tax Officer Ward-25(3)(New Delhi). The relevant paras 13 and 14 are reproduced as under: “13. To our minds, approval granted by statutory authorities, as required under the provisions of the Act, has to be furnished to an assessee along with the reasons to believe. The statutory scheme encapsulated in the Act provides that reassessment proceedings cannot be triggered till the AO has reasons to believe that income, which is otherwise chargeable to tax, has escaped assessment and, reasons recorded by him are placed before the specified authority for grant of approval to commence the process of reassessment. 14. In this case, the sense we get is that the second condition requiring AO to obtain prior approval of the specified authority was not fulfilled, as otherwise, there was no good reason not to furnish the same to the petitioner along with the document which contained the AO's reasons for holding the belief that income otherwise chargeable to tax had escaped assessment.” 11. The S.L.P filed against the aforesaid Delhi High Court order 26.09.2023 was dismissed by Hon’ble Supreme Court, vide order dated 13.09.2024 passed in S.L.P(Civil) Diary No(s). 33611/2024. 5 | P a g e

ITA No.512/Agr/2025 12. As discussed above neither the reasons recorded were submitted to the assessee along with the notice u/s. 148 of the Act nor the mandatory approval u/s. 151 of the Act was given to the assessee alongwith notice u/s. 148 of the Act to the assessee. Non furnishing the mandatorily sanction either during the assessment proceedings or before this tribunal makes this tribunal to infer that the mandatory sanction was not obtained from the competent authority. In such circumstances, neither the impugned notice u/s. 148 of the Act dated 27.03.2018 nor the impugned order dated 16.09.2025 are sustainable hence, both the notice as well as the impugned order are set aside. Since we have quashed the notice u/s. 148 and the reassessment order, the remaining legal and factual grounds remained merely of academic in nature and thus, are not being adjudicated and are left open. The appeal is liable to be allowed. 13. In the result, the assessee’s appeal is allowed. Order pronounced on – 21.05.2026

Sd/- Sd/- (S RIFAUR RAHMAN) (SUNIL KUMAR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated: 21.05.2026 Aamir Siddiqui, PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra 6 | P a g e