SUDHANSU SEKHAR MISHRA,BHUBANESWAR vs. ITO, WARD 3(1), BHUBANESWAR, BHUBANESWAR

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ITA 740/CTK/2026Status: DisposedITAT Cuttack06 October 2026AY 2016-175 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice issued under Section 148 of the Income Tax Act was invalid. The assessment year in question was 2016-17, and the notice was issued on July 29, 2022, which is beyond three years from the end of the relevant assessment year. As per Section 151(ii) of the Act, the approval for issuing such a notice should be granted by the Pr. CCIT. However, in this case, the approval was granted by the Pr. CIT-1, Bhubaneswar, who is an authority of a lower rank. Respectfully following the decision of the Hon'ble Supreme Court in ITO vs. Prakash Pandurang Patil, the Tribunal found the notice issued under Section 148 to be invalid. Consequently, the consequential assessments were also quashed. The appeal of the assessee was allowed.

What were the facts?

The assessee, Sudhansu Sekhar Mishra, filed an appeal against the order of the CIT(A), NFAC, Delhi, for the assessment year 2016-17. The assessment was reopened by issuing a notice under Section 148 of the Income Tax Act on July 29, 2022. The assessee contended that the approval for issuing the notice was granted by the Principal Commissioner of Income Tax (Pr. CIT), whereas it should have been granted by the Principal Chief Commissioner of Income Tax (Pr. CCIT), as the notice was issued beyond three years from the end of the relevant assessment year. The assessee relied on the Supreme Court's decision in ITO vs. Prakash Pandurang Patil.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, is invalid due to the approval for its issuance being granted by an authority of lower rank than required by Section 151(ii) of the Act, considering the reassessment was initiated after the expiry of three years from the end of the relevant assessment year? Assessee's Contention: The assessee argued that the approval for the Section 148 notice was granted by the Pr. CIT, which is an authority of lower rank than the Pr. CCIT. As the notice was issued beyond three years from the end of the assessment year 2016-17, the approval ought to have been granted by the authority specified in Section 151(ii), not Section 151(i). The assessee relied on the Supreme Court's decision in ITO vs. Prakash Pandurang Patil, which held that sanction for issuing a notice under Section 148 after three years must be by authorities of the rank specified in Section 151(ii). Revenue's Contention: The revenue supported the order of the Assessing Officer and the CIT(A).

Which sections of the Income-tax Act were involved?

Section 148,Section 151

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK

Before: S/SHRI GEORGE MATHAN & G. GURUSAMY

For Appellant: Shri Purnendu Bhusan Mohanty
For Respondent: Shri Vijaya Singh ld Sr DR
Hearing: 06/10/2026Pronounced: 06/10/2026

1 ITA No.740/CTC/2026 Assessment Year: 2016-17

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI GEORGE MATHAN, JUDICIAL MEMBER AND G. GURUSAMY, ACCOUNTANT MEMBER ITA No.740/CTC/2026 Assessment Year: 2016-17 Sudhansu Sekhar Mishra,, PP- Vs. ITO, Ward-3(1), Bhubaneswar 55, Pandab Nagar, Tankapani road, Badagada, Bhubaneswar PAN/GIR No.AFUPM 9958 A (Appellant) .. ( Respondent) Assessee by : Shri Purnendu Bhusan Mohanty, Revenue by : Shri Vijaya Singh ld Sr DR Date of Hearing : 06/10/2026 Date of Pronouncement : 06/10/2026

O R D E R Per Bench This is an appeal filed by the assessee against the order of the ld CIT(A), NFAC, Delhi dated 23.5.2026 in Appeal No.NFAC/2015-16/10405027 for the assessment year 2016-17. 2. Shri Purnendhu Bhusan Mphanty, ld AR appeared for the assessee and Shri Vijaya Singh, ld Sr. DR appeared for the revenue. 3. It was submitted by the ld. ARs that the impugned assessment year is 2016- 17. It was the submission that the assessment was reopened by issuing of notice u/s 148 on 29.07.2022. The ld. AR drew our attention to the notice u/s 148 which reads as follows:

2 ITA No.740/CTC/2026 Assessment Year: 2016-17

3 ITA No.740/CTC/2026 Assessment Year: 2016-17

4.

It was the submission that the approval has been granted by Pr. CIT whereas the approval was liable to be granted only by Pr. CCIT. It was the submission that as the approval has been granted by wrong authority, the notice u/s 148 is liable to be quashed and also the consequent assessment. The ld. AR also drew our attention to the decision of the Hon’ble Supreme Court in the case of ITO vs. Prakash Pandurang Patil reported in 481 ITR 332 (SC) wherein the Hon’ble Supreme Court has categorically held that where reassessment initiated after expiry of three years from end of relevant assessment year, sanction for issue of notice u/s 148 ought to have been granted by authorities of rank referred to in section 151(ii) and not by authorities of relatively lower rank u/s 151(i).

4 ITA No.740/CTC/2026 Assessment Year: 2016-17 5. In reply, the ld. Sr. DR supported the order of the Assessing Officer and the ld. CIT(A). 6. We have considered the rival submissions. A perusal of the facts in the present case clearly shows that the impugned assessment year is 2016-17. The notice u/s 148 has been issued on 29.7.2022 and the notice is issued beyond three years from the end of the relevant assessment year. As per the provisions of section 151(ii) of the Act, the approval is to be granted by the Pr. CCIT. A perusal of the notice u/s 148 clearly shows that the approval has been granted in the case of the assessee by Pr. CIT-1, Bhubaneswar. As the approval has been granted by the lower authority and not the appropriate authority who is required to issue approval, respectfully following the decision of Hon’ble Supreme Court in the case of ITO vs. Prakash Pandurang Patil referred to supra, the notice issued u/s 148 is found to be invalid and consequently quashed and the consequential assessments become invalid and the same also stand quashed. 7. In the result, the appeal of the assessee is allowed.

Order dictated and pronounced in the open court on 06/10/2026.

Sd/- Sd/- (G. GURUSAMY) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack ; Dated 06/10/2026 RS

5 ITA No.740/CTC/2026 Assessment Year: 2016-17 Copy of the Order forwarded to : 1. The appellant: Sudhansu Sekhar Mishra,, PP-55, Pandab Nagar, Tankapani road, Badagada, Bhubaneswar

2.

The respondent: ITO, Ward 3(1), Bhubaneswar 3. The CIT(A)-NFAC, Delhi 4. Pr.CIT, 5. DR, ITAT, 6. Guard file. //True Copy// By order Asst. Registrar. ITAT, Cuttack

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