PR. COMMISSIONER OF INCOME TAX-7, DELHI vs. WUDSTAY TRAVELS PVT LTD

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ITA/519/2026HC DelhiDLHC01029235202610 July 2026Author: HON'BLE MR. JUSTICE RAJNEESH KUMAR GUPTA,HON'BLE MR. JUSTICE DINESH MEHTA3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the ITAT had correctly decided the issue. The Tribunal's reasoning, which relied on the provisions of Section 151 of the Income Tax Act, 1961, and the judgment of the Delhi High Court in Communist Party of India (Marxist) vs. CIT (Ex), was found to be sound. The Court found no illegality or error in the ITAT's order. The ITAT had allowed the assessee's appeal, quashing the assessment order dated 20.04.2023. The ratio decidendi is that for reassessment proceedings initiated beyond three years from the end of the relevant assessment year, the approval for issuing notice under Section 148A(d) must be obtained from the Principal Chief Commissioner or Principal Director General or Chief Commissioner, as stipulated in Section 151(ii) of the Act, and not from the Principal Commissioner of Income Tax. The appeal filed by the Revenue was dismissed.

What were the facts?

The Revenue, represented by the Pr. Commissioner of Income Tax-7, Delhi, filed an appeal against an order dated 28.10.2025 passed by the Income Tax Appellate Tribunal (ITAT). The ITAT had allowed the appeal of the assessee, WUDSTAY TRAVELS PVT LTD, holding that the approval granted by the Principal Commissioner of Income Tax (PCIT) for issuing a notice under Section 148A(d) of the Income Tax Act, 1961, was incompetent. The ITAT found that for Assessment Year (AY) 2017-18, the notice under Section 148A(b) was issued on 01-06-2022 and the consequent order under Section 148A(d) was passed on 21-07-2022. As this was more than three years after the end of the relevant AY, the approval ought to have been granted by the Principal Chief Commissioner of Income Tax, not the PCIT.

What were the issues?

1. Whether the approval granted by the Principal Commissioner of Income Tax for issuing a notice under Section 148A(d) of the Income Tax Act, 1961, is valid when the notice is issued beyond three years from the end of the relevant assessment year, thereby requiring approval from a higher authority as per Section 151 of the Act. Assessee's Contentions: The assessee argued that the notice under Section 148A(b) was issued on 01-06-2022 and the order under Section 148A(d) on 21-07-2022 for AY 2017-18. Since this was after three years from the end of the AY, the sanctioning authority should have been the Principal Chief Commissioner or Principal Director General or Chief Commissioner, but it was obtained from the Pr. Commissioner of Income Tax, who is not the competent authority. The assessee relied on the judgments in Communist Party of India (Maxist) V. CIT (Ex) and Dalpat Baraiya vs Income Tax officer Ward -3(3)(1). Revenue's Contentions: The Revenue relied on the orders of the lower authorities and submitted that the notice/order was issued as per the directions of the Hon'ble Supreme Court in Ashish Agarwal. The Revenue acknowledged that the notice was issued beyond three years from the end of the relevant AY and required approval from the authority specified under Section 151 of the Act, which should have been the Principal Chief Commissioner or Principal Director General or Chief Commissioner.

Which sections of the Income-tax Act were involved?

Section 151,Section 148A(b),Section 148A(d),Section 148

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~24 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 519/2026 PR. COMMISSIONER OF INCOME TAX-7, DELHI.....Appellant Through: Mr.Puneet Rai, SSC with Mr.Ashvini Kumar and Mr.Rishabh Nangia, JSC. versus WUDSTAY TRAVELS PVT LTD .....Respondent Through: None CORAM: HON'BLE MR. JUSTICE DINESH MEHTA HON'BLE MR. JUSTICE RAJNEESH KUMAR GUPTA

O R D E R %

10.07.

2026 CM APPL. 42892/2026 (Exemption)

1.

Allowed, subject to all just exceptions.

2.

Application stands disposed of. ITA 519/2026

3.

The present appeal is directed against the order dated 28.10.2025 passed by the Income Tax Appellate Tribunal, Bench ‘C’ in ITA No. 2996/Del/2025 (hereinafter referred to as ‘the Tribunal’), whereby the appeal preferred by the assessee was allowed, inter-alia, holding the approval granted by the Principal Commissioner of Income Tax (PCIT) to be incompetent.

4.

The reasons for holding the approval to be the non est was that though extended period of 3 years was invoked as per the provisions of Section 151 of the Income Tax Act (hereinafter referred to as the Act of 1961), the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 14/07/2026 at 11:30:09

approval was granted by the PCIT, whereas it ought to have been granted by the Principal Chief Commissioner of Income Tax.

5.

While allowing the appeal, the Tribunal has observed as under:- “5. Ld. Counsel for the assessee has raised the legal ground no.4 and stated that first notice u/s 148 was issued on 30-06-2021 for the A.Y. 2017-18 under the old reassessment tax regime, however due to the introduction of new reassessment tax regime from 01-04-2021 and in the compliance of the Hon’ble Supreme Court Order in the case of Ashish Agarwal notice u/s 148A(b) of the Act was issued on 01-06- 2022 and consequent order under section 148A(d) of the Act on 21- 07-2022. The case of the assessee relates to the A.Y. 2017-18 and the notice /order was issued on 21-07-2022 after a period of three years from the end of relevant assessment Year, the sanctioning authority should have been Principal Chief Commissioner or Principal Director General or Chief commissioner but in this case the approval has been obtained from the Pr. Commissioner of Income Tax, which is not the competent authority to grant the permission. This issue is squarely covered by the Judgement of Hon’ble Jurisdictional Delhi High Court in the case of Communist Party of India (Maxist) V. CIT (Ex) WP 9031/2023 dated 28-04-2025. In the case of Dalpat Baraiya vs Income Tax officer Ward -3(3)(1) the Co-ordinate bench held that where three years had expired from the end of the Assessment year 2018-19, sanctioning authority u/s 151(ii) of the Act should have been Principal Chief Commissioner and not Principal Commissioner, thus order under section 148A(d) and notice under section 148 issued on basis of approval granted by Principal Commissioner were to be quashed and set aside.

6.

The Ld. Sr. DR has relied the order of the lower authorities and submitted that the notice/ order was issued as per the directions of the Hon’ble Supreme Court in the case of Ashish Agarwal [2022] 444 ITR 1 SC. In the present case the notice was issued on 21-07-2022 for the A.Y. 2017-18 from the prior approval of the Pr. Commissioner of Income Tax 07 Delhi, without, the approval of the authority specified u/s 151 of the Act. The notice was issued beyond the period of three years from the end of the relevant assessment year, thus in term of section 151 of the Act the sanction was required to be approved by the Principal Chief Commissioner or Principal Director General or This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 14/07/2026 at 11:30:09

where there is no such authority, by Chief Commissioner or Director General. Respectfully following the decision of the Hon’ble High Court and the Co-ordinate Bench we allowed the appeal of the assessee and quashed the assessment order dated 20.04.2023”.

6.

On perusal of the impugned order of the Tribunal, we find that the Tribunal has correctly decided the issue, bearing in mind the provisions contained in Section 151 of the Act of 1961, while also relying upon the judgment of this Court rendered in the case of Communist Party of India (Marxist) vs. CIT (Ex) in Civil Writ Petition No. 9031/2023 decided on 28.04.2025. 7. We do not find that any illegality or error in the order impugned passed by the Tribunal.

8.

The appeal, therefore, fails. DINESH MEHTA, J. RAJNEESH KUMAR GUPTA, J. JULY 10, 2026 neelam This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 14/07/2026 at 11:30:09

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