URVI VISHAL CHAVDA,RAJKOT vs. ITO WARD 1(1)(1), RAJKOT

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ITA 249/RJT/2026Status: DisposedITAT Rajkot23 April 2026AY 2017-20186 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the approval for issuing the notice under Section 148 was granted by an authority not specified in Section 151 of the Act, as more than three years had elapsed from the end of the relevant assessment year. Therefore, the sanction was invalid, rendering the notice and subsequent proceedings void ab initio.

What were the facts?

The assessee purchased an immovable property and paid Rs. 14,11,011/-. No return of income was filed for AY 2017-18. The Assessing Officer (AO) initiated reassessment proceedings under Section 147, issuing a notice under Section 148 after obtaining approval from the Principal Commissioner of Income Tax (Pr. CIT).

What were the issues?

Whether the reassessment proceedings were validly initiated considering the authority that granted the approval for issuing the notice under Section 148, and whether the sanction was in accordance with the provisions of Section 151 of the Act.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 144,Section 144B,Section 250,Section 251(1)(a),Section 151

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Rajkot Bench, Rajkot

Before: Dr. Arjun Lal Saini & Dr. Dinesh Mohan Sinha

For Appellant: Shri Gaurang Khakhkhar, Ld. AR
For Respondent: Shri Abhimanyu Singh Yadav, Ld. Sr. DR
Hearing: 30/03/2026

आयकर अपीलीय अिधकरण, राजकोट �यायपीठ, राजकोट। In The Income Tax Appellate Tribunal Rajkot Bench, Rajkot Before Dr. Arjun Lal Saini, Accountant Member And Dr. Dinesh Mohan Sinha, Judicial Member आयकरअपीलसं./ITA No.249/Rjt/2026 (�नधा�रणवष�/Assessment Year: (2017-18) Urvi Vishal Chavda, ITO Ward 1(1)(1) 702, 7th Floor, Aayakar Bhawan, Race C-14, Raviratna Park, University Road, Vs. Rajkot. Course Ring Road, Rajkot, Gujarat. �थायीलेखासं./जीआइआरसं./PAN/GIR No.: AVKPC5969K (अपीलाथ�/Appellant) (��यथ�/Respondent)

Appellant by : Shri Gaurang Khakhkhar, Ld. AR Respondent by : Shri Abhimanyu Singh Yadav, Ld. Sr. DR Date of Hearing : 30/03/2026 : 23/04/2026 Date of Pronouncement

ORDER Per, Dr. Dinesh Mohan Sinha, JM:

Captioned appeal filed by the assessee, pertaining to Assessment Year 2017-18, is directed against the order under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC) Delhi, dated 05.01.2026, which in turn arises out of an order passed by the Assessing Officer u/s 147 r.w.s. 144 & 144B of the Act, on 18.04.2023. 2. The grounds of appeal raised by the assessee are as follows:

ITA No.249/Rjt/2026 Urvi Vishal Chavda

1.

On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) has erred in setting aside the assessment order to the file of the Assessing Officer for making a fresh assessment without adjudicating upon the specific legal grounds raised by the appellant challenging the fundamental jurisdiction to frame the said assessment. 2. That the learned CIT(A) failed to appreciate that the legal grounds raised by the appellant, particularly Ground Nos. 1 and 2 in Form No. 35, which challenged the validity of the initiation of proceedings under Section 147 and the issuance of notice under Section 148 of the Act, were preliminary objections going to the root of the matter. A decision on these grounds in favour of the appellant would have necessitated the annulment OR quashing of the assessment order in its entirety, rendering the act of setting it aside for a de-novo assessment legally untenable and prejudicial to the appellant. 3. That the learned CIT(A) misdirected himself in law by exercising the power to set aside the assessment under the proviso to Section 251(1)(a) of the Act while simultaneously admitting in his order (at paragraph 6.4) that the grounds were being disposed of "for statistical purpose without going into the merit of the case." This approach constitutes a failure to exercise the appellate jurisdiction vested in him, which requires a decision on the merits of the grounds raised by an appellant. 4. Without prejudice to the grounds raised above, the learned CIT(A) ought to have held that the entire reassessment proceedings are void ab initio, as the mandatory conditions for a valid assumption of jurisdiction under Section 147 of the Act were not fulfilled. 5. That the learned CIT(A) erred in not quashing the assessment proceedings, which were initiated based on a notice issued under Section 148 of the Act without obtaining a valid and proper sanction as prescribed under Section 151 of the Act. The sanction granted for the issuance of the notice is not in accordance with the law and is therefore invalid. 6. It is contended that the sanction for the issuance of the notice under Section 148 of the Act, dated 27/07/2022, was required to be granted by the Principal Chief Commissioner of Income Tax (PCCIT) as per the provisions of Section 151 of the Act 6 applicable at the relevant time. The sanction, if granted by any authority lower than the PCCIT, such as the Principal Commissioner of Income Tax (PCIT), would be without jurisdiction, rendering the consequent notice and the entire proceedings null and void. 7. The learned CIT(A) erred in law and on facts in passing the 7 impugned order, which is contrary to the principles of natural justice and the provisions of the Income Tax Act, 1961. 8. The appellant craves leave to add, alter, amend, OR withdraw 8 any of the grounds of appeal at OR before the time of the hearing of the appeal.

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ITA No.249/Rjt/2026 Urvi Vishal Chavda 3. Brief facts of the case are that the assessee has filed income tax return for AY 2017-18 on 23.01.2018 declaring total income of Rs.2,79,920/- and the same was found to the invalid return. The assessee is one of the purchaser of the immovable property from M/s Six Twenty Realty Pvt Ltd. The survey action was carried out on 02.04.2019 at M/s Six Twenty Realty Pvt Ltd, wherein the proper officer of the company has framed that on sale of flats of deemed should be collected. Assessee found to be paid an amount of Rs.12,50,000/- through cheque and Rs.1,61,011/- against the flat No.B1-1003 Dream City, Raiya Road, Rajkot. Considering the facts, it is clear that purchase consideration of Rs.14,11,011/- paid towards purchase of immovable properties during financial year 2016-17. Since, there was no return of income, the AO was set aside on the part of the assessee disclosed fully and truly about the transaction resulted into escapement of income to the extent of Rs.14,11,011/-. The notice u/s 148 was issued on 27.07.2022 as there was no return of income filed assessment completed u/s 147 r.w.s. 144 & 144B of the Act income assessed at Rs.14,11,011/- on dt. 18.04.2023.

4.

The assessee filed an appeal against the order of assessment before the Ld. CIT(A), which was disposed by order dt. 05.01.2026, by following observations: “the assessment order is set aside to the Assessing Officer for passing a fresh assessment order as per proviso to section 251(1)(a) of the Act. Ground Nos. 1 to 6 raised by the appellant are partly allowed for statistical purpose without going into the merit of the case. In the result, for statistical purposes the appeal is partly allowed.”

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ITA No.249/Rjt/2026 Urvi Vishal Chavda 5. Further, aggrieved by the order of the Ld. CIT(A), the assessee was in appeal before this Tribunal. (a) Ld. AR of the assessee submitted that first notice was issued on 22.04.2021 after obtaining prior permission of the competent authority. As per the verdict of Hon'ble Supreme Court of India in the case of Union of India Vs. Ashish Agarwal & Others (Civil Appeal No. 3005/2022) dated 04.05.2022, the impugned noticed shall be deemed to have been issued under section/148A of the Act as substituted by the Finance Act, 2021 and construed or treated to be show cause notice in terms of section 148A(b) of the Act. Therefore respectfully following the verdict of Hon'ble Supreme Court of India in the case of Union of India v. Ashish Agarwal & Others. The second notice was issued on dtd. 27.07.2022 u/s 148 of the Act, after taking approval from Ld. Pr. CIT-1, Rajkot. (b) On the other hand, Ld. DR for the revenue relied on the order of the Assessing Officer.

6.

We have heard, rival contention of both the parties and perused the material available on record. We note that Order passed u/s. 148A(d) of the I.T. Act, 1961 on dated 27/07/2022. Subsequently, notice u/s.148 of the I.T. Act, 1961 was issued to the assessee on 27/07/2022 after obtaining prior approval from the Ld. Pr. CIT-1, Rajkot. We note that the assessee has challenged as many as 8-grounds of appeal, the main issue is the validity of assessment proceedings in making the assessment order by the Assessing Officer. We also note that in reopening proceedings u/s 148 of the Act, notice was issued by Page 4 of 6

ITA No.249/Rjt/2026 Urvi Vishal Chavda the Assessing Officer after obtaining approval from Principal Commission of Income Tax (Pr. CIT-1, Rajkot). We further note that there was a clearly interlinkage between limitation and the ascertainment of the specified authority while granting approval. The plain language of the amended Section 151 of the Act. Section 151, when read alongside the first proviso to Section 148, we find that Clauses (i) and (ii) of Section 151 of the amended Act clearly specify the authority who can grant approval for issued of notice in reassessment proceedings. Thus, if three (3) years or less have elapsed from the end of the relevant AY, the specified authority who would grant approval for initiation of reassessment proceedings will be the Principal Commissioner or Principal Director or Commissioner or Director. However, if more than three (3) years from the end of the relevant AY have elapsed, the specified authority for according approval for reassessment shall be the Principal Chief Commissioner or Principal Director General or, where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General. That the approval is mandatory is plainly evident on perusal of the first proviso to Section 148 of the Act, the said proviso, reads as follows: "... Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice...." In this case, there was no dispute that although three (3) years had elapsed from of the end of the relevant assessment year, the approval was sought from authorities specified in clause (i), as against clause (ii) of Section 151. In the present case, since three years had already lapsed from the end of AY 2017-

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ITA No.249/Rjt/2026 Urvi Vishal Chavda

18 on 31.03.2022, the approval granted by the Ld. Pr. CIT-1, Rajkot, is not in accordance with the statutory mandate. This fact has not been disputed by the Revenue. Therefore, the sanction accorded by Ld. Pr. CIT-1, Rajkot, to reopen the assessment is invalid in law, rendering the notice issued u/s 148 of the Act and all subsequent proceedings void ab initio.

7.

In the result, appeal filed by the assessee, is allowed.

Order is pronounced in the open Court on 23/04/2026.

Sd/- Sd/- [ Dr. Arjun Lal Saini ] [ Dr. Dinesh Mohan Sinha ] लेखा सद�/Accountant Member �याियक सद�य/ Judicial Member //True Copy// राजकोट/Rajkot िदनांक/ Date: 23/04/2026 Copy of the order forwarded to :  The assessee  The Respondent  CIT  The CIT(A)  DR, ITAT, RAJKOT  By order Guard File

Assistant Registrar/Sr. PS/P.S. ITAT, Rajkot

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