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Facts
The assessee's appeal pertains to the assessment year 2016-17. The case was reopened under Section 148 beyond three years from the end of the relevant assessment year. The assessee challenged the validity of the reopening proceedings.
Held
The Tribunal held that the notice under Section 148 was issued without proper sanction as required by the amended provisions of Section 151(ii). The approval was obtained from the Pr. CIT instead of the higher authorities specified. Consequently, the notice and subsequent proceedings under Section 147 were quashed.
Key Issues
Whether the reopening of assessment under Section 147/148 was valid when the approval under Section 151(ii) was not obtained from the prescribed authority for cases reopened beyond three years.
Sections Cited
147, 148, 151(ii), 254(1)
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PER PAWAN SINGH, JUDICIAL MEMBER;
This appeal by assessee is directed against the order of Ld. CIT(A)/NFAC dated 20.02.2025 for assessment year (AY) 2016-17.
Rival submissions of both the parties have heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that though, the assessee has raised multiple grounds of appeal, however, at this stage the assessee pressing against validity of reopening under section 147 and issuance of notice under section148. Once, such issue is held in favour of assessee, other legal issue and grounds of appeal on merit will become academic. The case of assessee for A.Y. 2016-17 was reopened by issuing notice under section 148 dated 30.06.2022. The case of assessee was reopened beyond three years from the end of relevant assessment year. As
per amended provision of section 147/148, inserted by Finance Act 2021, applicable from 01.04.2021, the assessing officer was required to obtain sanction/approval under section 151(ii) from Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. However, in the present case, the assessing officer obtained approval of Pr.
Commissioner of Income Tax as recorded in the notice under section 148 dated 30.06.222 itself. Thus, notice under section 148 is issued without proper sanction which renders the notice invalid; therefore, subsequent action initiated on such invalid has become void ab initio. To support his submission, the ld AR of the assessee relied on the decision of Mumbai Tribunal in ACIT Vs dated 02.12.2024.
On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the revenue after going through the contents of notice under section 148 submits that he supports the order of lower authorities.
I have considered the contentions of both the parties and have gone through the orders of lower authorities carefully. On perusal of record and the order of lower authorities, I find merit in the submission of ld. AR of the assessee that case of assessee for A.Y. 2016-17 was reopened beyond three years from the end of relevant assessment year, thus, as per amended provisions of section 151(ii) the ld. Assessing Officer was required to obtain approval from Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. However, in the present case, the ld. Assessing Officer has obtained approval / sanction from Pr. CIT which is invalid. Thus, notice under section 148 is invalid being without sanction of law; therefore, subsequent action initiated thereon has become void ab initio. Similar view was taken by Mumbai Tribunal in ACIT Vs Manish Financial (supra). In the result, notice under section 148 and proceeding under section 147 are quashed. In the result, the assessee succeeded on the primary submissions of his ld AR.
Considering the fact that assessee has succeeded on first legal issue, therefore, adjudication on the grounds on merit have become academic.
In the result, the appeal of the assessee is allowed.