RICHA SUCHIT PATEL,MUMBAI vs. INCOME TAX OFFICER, WARD 34(3)(2), MUMBAI

PDF · subscribers
ITA 9169/MUM/2025Status: DisposedITAT Mumbai30 September 2026AY 2017-201810 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the assessee's appeal on the preliminary legal ground concerning the validity of the proceedings initiated under section 147 of the Act. The Tribunal noted that the order under section 148A(d) was passed on 28.07.2022, which was beyond three years from the end of Assessment Year 2017-18 (ending 31.03.2018). As per the statutory scheme of section 151(ii) of the Act, for proceedings initiated beyond three years, approval was required from the Principal Chief Commissioner or Chief Commissioner. However, the approval in this case was granted by the Principal Commissioner of Income Tax-17, Mumbai. The Tribunal, respectfully following the principles laid down by the Hon'ble Supreme Court in *Union of India v. Rajeev Bansal* and the Hon'ble Bombay High Court in *Alag Property Construction (P.) Ltd.*, held that the approval obtained did not satisfy the mandatory requirement prescribed under section 151(ii). Consequently, the order passed under section 148A(d), the notice issued under section 148, and the assessment order passed under section 147 were quashed. The impugned order of the CIT(A) was set aside. Since the assessment itself was quashed on this preliminary ground, the other grounds raised by the assessee were rendered academic and did not require separate adjudication.

What were the facts?

The assessee, Richa Suchit Patel, filed an appeal against the order of the CIT(A), NFAC, Delhi, dated 19.08.2025, which confirmed the assessment order passed under section 147 r.w.s 144 of the Income Tax Act, 1961, by the Assessment Unit, Income Tax Department, dated 29.03.2023. The assessment year in question is 2017-18. The original assessment order involved an addition of Rs. 50,37,480/- as unexplained cash credit under section 68 of the Act, being sale proceeds of shares. The assessee's appeal before the CIT(A) was dismissed ex parte. The assessee's appeal before the ITAT was initially time-barred by 56 days, which was condoned. The primary challenge by the assessee is to the validity of the reopening of assessment under section 147, specifically the approval obtained under section 151.

What were the issues?

1. Whether the reopening of assessment under section 147 of the Income Tax Act, 1961, is valid, considering the approval obtained under section 151 of the Act. - Assessee's contention: The approval for reopening was obtained from an authority not specified under section 151(ii) of the Act, as the proceedings were initiated beyond three years from the end of the relevant assessment year. The approval should have been from the Principal Chief Commissioner or Chief Commissioner, not the Principal Commissioner. Reliance was placed on *Alag Property Construction (P.) Ltd. v. ACIT*. The assessee also argued that the reasons for reopening were vague, based on suspicion, and borrowed satisfaction. - Revenue's contention: The Revenue vehemently supported the orders of the Revenue Authorities. 2. Whether the addition of Rs. 50,37,480/- as unexplained cash credit under section 68 of the Act is sustainable. - Assessee's contention: The addition is based on presumption and conjecture. Furthermore, 1,50,000 shares were gifted by the husband, and any income should be clubbed in the husband's hands under section 64(iv). - Revenue's contention: Not recorded. 3. Whether the applicability of section 115BBE of the Income Tax Act, 1961, is correct. - Assessee's contention: Not recorded. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 148,Section 148A,Section 68,Section 151,Section 151(ii),Section 115BBE,Section 64(iv)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: SHRI AMIT SHUKLA, JM & SHRI ARUN KHODPIA, AM

For Appellant: Shri Dharan Gandhi
For Respondent: Shri Prasanna Tewari, Sr. DR
Hearing: 30.09.2026

आयकर अपीलीय अिधकरण �ायपीठ मुंबईम�। IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JM & SHRI ARUN KHODPIA, AM I.T.A. No. 9169/Mum/2025 (Assessment Year: 2017-18) Richa Suchit Patel Income Tax Officer, Ward 34(3)(2), A-3, Sardar Patel Society, Nehru Kautilya Bhavan, Mumbai-400051 Vs. Road, Vile Parle (East), Mumbai-400057 PAN: BLEPP5972L Assessee- अपीलाथ� / Appellant Revenue-��थ�/ Respondent :

Assessee by : Shri Dharan Gandhi Revenue by : Shri Prasanna Tewari, Sr. DR : 28.07.2026 Date of Hearing : 30.09.2026 Date of Pronouncement

O R D E R Per Arun Khodpia, AM: This appeal is preferred by the assessee, directed against the order of the Commissioner of Income Tax Appeals, National Faceless Appeal Centre (NFAC), Delhi [in short, “the Ld. CIT(A)”], dated 19.08.2025 for the Assessment Year (AY) 2017-18, arises from the assessment order under section 147 r.w.s 144 of the Income Tax Act, 1961 [in short, “the Act”] dated 29.03.2023, passed by Assessment Unit, Income Tax Department [in short, “the Ld. AO”].

ITA No. 9169/Mum/2025 Richa Suchit Patel 2. The grounds of appeal raised by the assessee are as under: “1. Under the facts and in law, the learned Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (hereinafter referred to as "CIT(A)") erred in confirming the reopening of assessment under section 147 of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). 1.1 Under the facts and in law, the learned CIT(A) erred in confirming the reopening based on the reasons recorded by the learned Assessing officer (herein after referred to as "learned A.O.") which are vague and does not indicate any escapement of income. 1.2 Under the facts and in law, the learned CIT(A) failed to appreciate the fact that the learned A.O. has reopened appellant's case only on the basis of learned A.O.'s suspicion or doubt. 1.3 Under the facts and in law, learned CIT(A) failed to appreciate the fact that learned A.O. has reopened appellant's case based on borrowed satisfaction and without having done any further enquiry. 2. Under the facts and in law, the learned CIT(A) erred in dismissing the appeal filed by the appellant and confirming the addition made by the learned A.O. of Rs.50,37,480/-, being sale proceeds of 2,00,000 shares of M/s. Shivansh Finserve Limited (erstwhile known as M/s. Mansarovar Financial Services Limited"), under section 68 of the Act as unexplained cash credit. 1.1 Under the facts and in law, the learned CIT(A) erred in passing the order without giving reasonable opportunity of hearing and making submission. 1.2 Under the facts and in law, the order passed by learned CTT(A) is in violation of the principle of natural justice and equity. 1.3 Under the facts and in law, the learned CIT(A) erred in assuming that the appellant is not in possession of any details/documents to substantiate her claim. 1.4 Under the facts and in law, the learned CIT(A) erred in invoking provisions of Section 68 of the Act. 1.5 Under the facts and in law, the addition is made merely on the basis of presumption, surmises and conjecture of the learned A.O. 1.6 Without prejudice to above, under the facts and in law, learned A.O. erred in adding entire Rs.50,37,480/- in hands of the appellant as 1,50,000 shares of M/s Shivansh Finserve Limited were gifted to the appellant by her husband and therefore any income arising from such assets is to be clubbed in the hands of appellant's husband as per the provision of section 64(iv) of the Act. 3. Under the facts and in law, the learned CIT(A) erred in confirming the applicability of provisions of Section 115BBE of the Income Tax Act, 1961.

ITA No. 9169/Mum/2025 Richa Suchit Patel 4. All the aforesaid grounds are without prejudice to each other, independent and in the alternative. 5. The appellant leaves to add, alter or amend any of the above ground of appeal.”

3.

At the threshold, it is noticed that the appeal of assessee is time-barred by 56 days, which after submissions by assessee, was found to be on account of bona fide reasons sufficient to condone the delay. Accordingly, in absence of any fact or material on record, establishing any willful default on the part of assessee to cause such delay in filing of the appeal, following the principle of natural justice, the appeal of assessee is admitted for adjudication by condoning the delay of 56 days.

4.

Brief facts of the case are that the assessee had filed her return of income for AY 2017-18 on 28.03.2019 declaring total income of Rs.2,07,160/-. Subsequently, the case of assessee was re-opened and notice u/s 148 was issued complying the decision of Hon’ble Apex Court in the case of Union of India v. Ashish Agarwal [(2022) 138 taxmann.com 64 (SC)]. The issue pertaining to bogus long-term capital gain arises during the assessment proceedings and after deliberations, the Ld. AO culminated the assessment making a variation in respect of unexplained cash credit u/s 68 of the Act for Rs.50,37,480/-.

5.

Being disagreed with the addition made by the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A). However, with no success the appeal of assessee was dismissed on ex parte basis accepting the findings of Ld. AO observing that the assessee has not submitted necessary evidence to satisfy the 3

ITA No. 9169/Mum/2025 Richa Suchit Patel Ld. AO. Though the assessee has filed the appeal, she remained non-compliant during the appellate proceedings and has not furnished any evidence to satisfy even the appellate authority. Even otherwise on merits of it also, Ld. CIT(A) did not find any reason to differ with the findings of Ld. AO. The assessee, being aggrieved with the aforesaid order of Ld. CIT(A), preferred the present appeal before us.

6.

At the outset, the Ld. Counsel for the assessee challenged the validity of the proceedings initiated under section 147 of the Act on the ground of non- compliance with the statutory requirement of approval prescribed under section 151 of the Act. It was submitted that the order under section 148A(d) of the Act was passed on 28.07.2022 for Assessment Year 2017-18 and, therefore, was passed beyond three years from the end of the relevant assessment year.

7.

It was further submitted that, as recorded in paragraph 8 of the order passed under section 148A(d), the requisite approval was obtained from the Principal Commissioner of Income Tax-17, Mumbai. According to the Ld. AR, since the proceedings were initiated beyond three years from the end of the relevant assessment year, the approval thus was required to be obtained from the specified authority in terms of section 151(ii) of the Act i.e., from Principal Chief Commissioner of Income Tax or Chief Commissioner of Income Tax and not from the Principal Commissioner of Income Tax.

ITA No. 9169/Mum/2025 Richa Suchit Patel 8. The Ld. AR accordingly contended that the approval having been granted by an authority not contemplated under section 151(ii) of the Act, the statutory requirement was not duly complied with. Consequently, the order passed under section 148A(d), as well as the proceedings emanating therefrom, were contended to be contrary to the express mandate of law and, therefore, liable to be held invalid and quashed.

9.

In support of the aforesaid contention, the Ld. AR placed reliance upon the judgment of the Hon’ble Bombay High Court in Alag Property Construction (P.) Ltd. v. ACIT [2025] 179 taxmann.com 578 (Bombay).

10.

Per contra, Ld. DR vehemently supported the orders of Revenue Authorities.

11.

We have considered the rival submissions, perused the material available on record and the case laws relied upon by the assessee. The preliminary legal issue raised by the assessee relates to the validity of the approval contemplated under section 151 of the Act.

12.

On perusal of the order passed under section 148A(d) dated 28.07.2022, it is evident that the said order was passed beyond three years from the end of Assessment Year 2017-18, the relevant assessment year having ended on 31.03.2018. It is further evident from paragraph 8 of the said order that the

ITA No. 9169/Mum/2025 Richa Suchit Patel approval for issuance of notice under section 148 of the Act was granted by the Ld. Principal Commissioner of Income Tax-17, Mumbai, on 28.07.2022.

13.

The statutory scheme of section 151, as applicable to the proceedings in question, specifically prescribes the competent authority whose approval is required depending upon the period elapsed from the end of the relevant assessment year. In the present case, since the proceedings were initiated beyond three years from the end of the relevant assessment year, the requirement contemplated under section 151(ii) of the Act was attracted.

14.

The Hon'ble Supreme Court, in the case of Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70 (SC), while examining the statutory scheme governing reassessment proceedings, has explained the manner in which the provisions relating to limitation and the sanction of the specified authority are required to be applied. The observations of the Hon’ble Supreme Court in Union of India v. Rajeev Bansal (supra) have been summarised by the Hon’ble Bombay High Court in Alag Property Construction (P.) Ltd. v. ACIT (supra), wherein after considering the ratio laid down, observed as under:

“(a) Under the substituted provisions of re-assessment as introduced by the Finance Act, 2021, the Assessing Officer is required to obtain prior approval or sanction of the 'specified authority' at four stages-at the first stage under Section 148A(a), at the second stage under Section 148A(b), at the third stage under Section 148A(d), and at the fourth stage under Section 148. In the case of Ashish Agarwal (supra) the Hon'ble Supreme Court waived off the requirement of obtaining prior approval under section 6

ITA No. 9169/Mum/2025 Richa Suchit Patel 148A(a) and Section 148A(b) of the Act only. Therefore, the Assessing Officer was required to obtain prior approval of the 'specified authority' according to Section 151 of the new regime before passing an order under Section 148A(d) or for issuing a notice under Section 148.

(b) Under the new regime, if income escaping assessment is more than Rupees 50 lakhs, a reassessment notice could be issued after the expiry of three years from the end of the relevant previous year only after obtaining the prior approval of the Principal Chief Commissioner or the Principal Director General or the Chief Commissioner or the Director General. (c) Section 151(ii) of the new regime prescribes an approval of a higher authority, if more than three years have elapsed from the end of the relevant assessment year. Thus, non-compliance by the assessing officer with the strict time limits prescribed under section 151 vitiates their jurisdiction to issue a notice under section 148. (d) Grant of sanction by the specified authority is a precondition for the assessing officer to assume jurisdiction under section 148 to issue a reassessment notice.”

15.

In the present case, the admitted position emerging from the record is that the order under section 148A(d) was passed beyond three years from the end of Assessment Year 2017-18 and the approval referred to therein was granted by the Principal Commissioner of Income Tax-17, Mumbai. The Revenue has not brought any material on record to controvert these facts or to demonstrate that the approval contemplated under section 151(ii) of the Act was obtained from the authority specified therein.

16.

Accordingly, the issue arising for consideration is whether the approval so granted satisfies the mandatory requirement prescribed under section 151(ii) of the Act and, consequently, whether the proceedings initiated pursuant to such approval can validly be sustained.

ITA No. 9169/Mum/2025 Richa Suchit Patel 9. While the aforesaid provisions and explanations in the case of Rajeev Bansal (supra) were considered by the Hon’ble Bombay High Court in the case of Alag Property Construction (P.) Ltd. (supra), Hon’ble Court has held as under: “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 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 (ie. 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(i) of the new regime instead of the as well as the notice under section 148 was issued, after the authority specified under Section 151(if) of the new regime. 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 Assessment year in the present Writ Petition) wherein it is categorically held that the authority specified under section 151(1) 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(i) 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.”

ITA No. 9169/Mum/2025 Richa Suchit Patel 10. Turning to the facts of the present case, we find that the order under section 148A(d) of the Act was passed on 28.07.2022, i.e. beyond three years from the end of Assessment Year 2017-18. As recorded in paragraph 8 of the said order, the approval was granted on the same date by the Principal Commissioner of Income Tax-17, Mumbai. Since the proceedings were initiated beyond three years from the end of the relevant assessment year, the approval contemplated under section 151(ii) of the Act was required to be obtained from the Principal Chief Commissioner or Chief Commissioner, as the case may be, in accordance with the statutory scheme then applicable. The approval granted by the Principal Commissioner of Income Tax-17, Mumbai, therefore, does not satisfy the requirement prescribed under section 151(ii) of the Act.

11.

We, therefore, respectfully following the principles laid down by the Hon’ble Supreme Court in Union of India v. Rajeev Bansal (supra), as followed by the Hon’ble Bombay High Court in Alag Property Construction (P.) Ltd. (supra), hold that the order passed under section 148A(d) of the Act cannot be sustained. Consequently, the notice issued under section 148 and the assessment order passed under section 147 dated 29.03.2023, being founded upon such proceedings, cannot survive. Accordingly, the impugned order passed by the Ld. CIT(A) is set aside and the assessment order passed under section 147 is quashed.

ITA No. 9169/Mum/2025 Richa Suchit Patel 12. In the result, the appeal of the assessee is allowed on the preliminary legal ground challenging the validity of the proceedings under section 148A(d) of the Act on account of non-compliance with the requirement of section 151(ii) regarding approval of the specified authority.

13.

Since the impugned assessment itself has been quashed on the aforesaid preliminary legal ground, the other grounds raised by the assessee have become academic in nature. Accordingly, the same do not call for separate adjudication.

14.

In result, the appeal of assessee stands allowed, in above terms.

Order pronounced in the open court on 30-09-2026.

Sd/- Sd/- (AMIT SHUKLA) (ARUN KHODPIA) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai, Dated : 30-09-2026. Ankit K., Sr. PS Copy of the Order forwarded 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 →