INCOME TAX OFFICER, MUMBAI vs. NARESH JAIPRAKASH SHROFF, MUMBAI

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ITA 2793/MUM/2025Status: DisposedITAT Mumbai25 July 2025AY 2017-18Bench: SHRI NARENDRA KUMAR BILLAIYA, HON'BLE (Accountant Member), SHRI ANIKESH BANERJEE, HON'BLE JUDICIAL MEMBER Ι.Τ.Α. No. 2793/Mum/2025 Assessment Year: 2017-18 Income Tax Officer Vs Naresh Jaiprakash Shroff Room No. 129, 1st Floor Aayakar Bhavan M.K. Road Mumbai - 400020 [PAN: ABEPS9518C] अपीलार्थी/ (Appellant) प्रत्यर्थी / (Respondent) C.O. No. 131/Mum/2025 Income Tax Officer Naresh Jaiprakash Shroff Room No. 129, 1st Floor Aayakar Bhavan M.K. Road Mumbai - 400020 अपीलार्थी/ (Appellant) प्रत्य1 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the approval for issuing the notice under Section 148 was not in accordance with the provisions of Section 151 of the Act, as concluded by the Supreme Court in the Union of India vs. Rajeev Bansal case. Therefore, the notice was set aside.

What were the facts?

The revenue preferred an appeal against the CIT(A)'s order which had quashed the assessment order due to an invalid notice issued under Section 148 of the Income Tax Act. The assessee also filed cross-objections.

What were the issues?

Whether the notice issued under Section 148 of the Income Tax Act, 1961, was valid considering the approval obtained from the Principal Commissioner, in light of the Supreme Court's decision in Union of India vs. Rajeev Bansal.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 151,Section 133A,Section 132,Section 132A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI

Before: SHRI NARENDRA KUMAR BILLAIYA, HON’BLE & SHRI ANIKESH BANERJEE, HON’BLE

For Appellant: Shri Subodh Ratnaparkhi, A/R
Hearing: 23/07/2025Pronounced: 25/07/2025

Heard together (2 matters)

I.T.A. No. 2793/Mum/2025
C.O. No. 131/Mum/2025

Read from the judgment's own cause title. This page is filed under one of them.

Assessee by : Shri Subodh Ratnaparkhi, A/R Revenue by : Shri Leyaqat Ali Aafaqui, Sr. D/R सुनवाई की तारीख/Date of Hearing : 23/07/2025 घोषणा की तारीख /Date of Pronouncement: 25/07/2025 आदेश/O R D E R

PER NARENDRA KUMAR BILLAIYA, AM:

1.

This appeal by the revenue is preferred against the order dated 19/02/2025 by NFAC, Delhi [hereinafter ‘the CIT(A)’] pertaining to AY 2017-18. The assessee has also preferred cross- objections against the very same order of the ld. CIT(A) in C.O. No. 13/Mum/2025. C.O. No. 131/Mum/2025 2

2.

The grievance of the revenue reads as under:- “A. Whether the Hon’ble CIT(A) erred in reversing the findings of the Assessing Officer for the A.Y. 2017-18?”

B. Whether the Hon’ble CIT(A) erred in quashing the Assessment order on account of notice issued u/s 148 of the Income tax Act is invalid without appreciating that notice u/s 148 of the Income tax Act is invalid without appreciating that notice u/s 148 was issued as per instruction no. 1 of 2022 issued by CBDT?

C. Whether the Hon’ble CIT(A) erred in deleting the addition of Rs. 2,31,39,000/- made in the Assessment order without merit.

D. The appellant craves leave to amend or alter any ground or add new ground which may necessary.”

3.

Representatives of both the sides were heard at length. Case records carefully perused and the relevant documentary evidence brought on record duly considered in the light of Rule 18(6) of the ITAT Rules, 1963.

4.

The entire quarrel revolves around the notice dated 28/07/2022 issued u/s 148 of the Act which is as under:-

***This space has been left blank intentionally, P.T.O.***

5.

The bone of contention is the approval of the notice by the PCIT(1), Mumbai accorded on 26/07/2022.

6.

The issue whether approval has been accorded by the appropriate authority has been elaborately explained by the Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal [2024] 469 ITR 46 (SC), wherein the Hon’ble Supreme Court concluded as under:-

“(a) After 1-4-2021, the Income-tax Act has to be read along with the substituted provisions;

(b) TOLA will continue to apply to the Income-tax Act after 1-4-2021 if any action or proceeding specified under the substituted provisions of the Income-tax Act falls for completion between 20-3-2020 and 31-3-2021;

(c) Section 3(1) of TOLA overrides section 149 only to the extent of relaxing the time-limit for issuance of a reassessment notice under section 148;

(d) TOLA will extend the time-limit for the grant of sanction by the authority specified under section 151. The test to determine whether TOLA will apply to section 151 of the new regime is this: if the time-limit of three years from the end of an assessment year falls between 20-3-2020 and 31-3-2021, then the specified authority under section 151(i) has extended time till 30-6-2021 to grant approval;

(e) In the case of section 151 of the old regime, the test is: if the time-limit of four years from the end of an assessment year falls between 20-3-2020 and 31-3-2021, then the specified authority under section 151(2) has extended time till 31-3-2021 to grant approval;

(f) The directions in Ashish Agarwal (supra) will extend to all the ninety thousand reassessment notices issued under the old regime during the period 1-4- 2021 and 30-6-2021;

(g) The time during which the show cause notices were deemed to be stayed is from the date of issuance of the deemed notice between 1-4-2021 and 30-6-2021 till the supply of relevant information and material by the Assessing Officers to the assessees in terms of the directions issued by this Court in Ashish Agarwal (supra), and the period of two weeks allowed to the assessees to respond to the show cause notices; and (h) The Assessing Officers were required to issue the reassessment notice under section 148 of the new regime within the time-limit surviving under the Income-tax Act read with TOLA. All notices issued beyond the surviving period are time barred and liable to be set aside. [Para 114]”

7.

In light of the above findings of the Hon’ble Supreme Court, the since the approval was given by the PCIT, the approval is not as per the provisions of Section 151 of the Act and hence, the notice issued u/s 148 of the Act deserves to be set aside.

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