NAINA MANISH DESAI ,MUMBAI vs. ITO WARD 19(2)(4), MUMBAI

The grounds of appeal are as under:- 1. On the facts and in the circumstances of the case and in law the learned AO erred issuing a notice under section 148 of the Act on 30 June 2021 and 26 July 2022 when he had no juri iction to issue the notice as per section 151A of the Act read with the e-assessment of income escaping assessment scheme 2022. 2. On the facts and in the circumstances of the case and in law the learned AO erred issuing a notice under section 148 of the Act on 26 July 2022 when proceedings pursuant to the notice under section 148 of the Act dated 30 June 2021 were still pending without appreciating that it leads to multiplicity of proceedings and there cannot be two proceedings subsisting at the same time and until the first reopening notice is withdrawn, the second notice under section 148 of the Act is bad in law. 3. On the facts and in the circumstances of the case and in law the learned AO erred issuing a notice under section 148 of the Act without a Document Identification Number ('DIN') and contrary to the Circular no. 19 / 2019 dated 14 August 2019. 4. On the facts and in the circumstances of the case and in law since the notice under section 148 of the Act is bad in law the consequential assessment order and CIT(A) order are also bad in law and should be quashed. 5. On the facts and in the circumstances of the case and in law the learned CIT (A) erred in confirming the addition of Rs. 28,14,500/- to the total income under section 56(2)(vii) (b) of the Income Tax Act, 1961 without considering the provisions of section 56(2)(vii)(b) but relied on provisions of section 56(2)(x) of the Act. 6. On the facts and in the circumstances of the case and in law the learned CIT (A) erred in adopting the DVO valuation without appreciating that the DVO has not considered the sale instance of not considering the registered document bearing no. 382 of 2016 dated 15.01.2016 which was sold for Rs. 3,11,00,000/- which is flat no. 5 in 'D' wing in the same complex of similar size. 7. On facts and circumstances of the case and in law, the learned CIT(A) erred in holding that the circle rate of the flat is more than the amount paid by the appellant without considering the valuation report dated 22 April 2016 issued by the Registered Valuer. 8. On facts and circumstances of the case and in law, the learned CIT(A) erred in holding that there is no proof on record that the average rate was Rs. 35,466/-per square feet ignoring the sale instance in the same building which have been considered in arriving at the average valuation. Further, the CIT(A) has ignored the factual differences pointed out by the Appellant in determining the rate per square feet of the property.

Additional Grounds of Appeal:- Reopening proceedings are bad in law 1. On the facts and circumstances of the case and in law, the approval obtained by the Learned Assessing Officer under section 151(i) of the Act for passing the order under section 148A(d) and issuing the notice under section 148 of the Act are bad in law as the prior approval of the specified authority under section 151(ii) of the Income-tax Act, 1961 has not been obtained and hence, the consequent assessment under section 147 is also liable to be quashed. 2. On the facts and circumstances of the case and in law, the Learned Assessing Officer erred in issuing the notice under section 148 of the Act on 30 June 2021 and 26 July 2022 and passing an order under section 148A(d) of the Act when he had no juri iction to issue the notice or pass the order as per section 151A of the Act read with the e-assessment of income escaping assessment scheme, 2022. 3. On the facts and circumstances of the case and in law, the Learned Assessing Officer erred in issuing a notice under section 148 of the Act without a Document Identification Number ('DIN') which is contrary to the Circular No. 19 of 2019 dated 14 August 2019. 4. On the facts and circumstances of the case and in law, the Learned Assessing Officer erred in issuing a notice under section 148 of the Act on 26 July 2022 when proceedings pursuant to the notice under section 148 of the Act dated 30 June 2021 were still pending without appreciating that it leads to multiplicity of proceedings and there cannot be two parallel proceedings subsisting at the same time until the first reopening notice is withdrawn or dropped and the second notice under section 148 of the Act is bad in law. 4. It may be stated that the assessee has filed above additional grounds of appeal challenging the validity of the reopening with a request to admit the same. We find that the additional grounds of appeal are pure legal grounds which go into the very root of the assessment order in this case. The ld.DR has not objected to admission of additional grounds. We therefore admit the same in view of landmark decisions of the hon’ble Apex Court in P a g e | 4 A.Y. 2017-18

We consider it appropriate to adjudicate on Additional ground no. 1 at the outset wherein it is contented that “On the facts and circumstances of the case and in law, the approval obtained by the Learned Assessing Officer under section 151(i) of the Act for passing the order under section 148A(d) and issuing the notice under section 148 of the Act are bad in law as the prior approval of the specified authority under section 151(ii) of the Income-tax Act, 1961 has not been obtained and hence, the consequent assessment under section 147 is also liable to be quashed.” 5.1 Before us, the ld.AR has contented that the reassessment proceedings are invalid and void as the order u/s 148A(d) and also notice u/s 148 of the Act have not be issued in accordance with the provisions of theAct. It is submitted that original notice under section 148 was issued by the AO on 30 June 2021. Subsequently, a notice under section 148A(b) of the Act was issued by the AO on 28 May 2022 and an order under section 148A(d) of the Act was passed by the AO on 26 July 2022. Another, notice under section 148 of the Act was issued by the AO on 26 July 2022. Both, the order under section 148A(d) and the notice under section 148 of the Act dated 26 July 2022 show that the approval has been taken of the Principal Commissioner of Income Tax on 22 July

The assessee seeks to challenge the juri iction of the ld.AO in issuing the notice under section 148 of the Act. In this regard, she placed reliance on the decision of the Hon’ble Supreme Court in case of UOI v. Rajeev Bansal(2024) 469 ITR 46 (SC) which has held that the prior approval for passing the order under section 148A(d) and issuing the notice under section 148 of the Act should be after obtaining the approval of the appropriate authority under section 151 of the new regime. Therefore, the approval of the Principal Chief Commissioner of Income Tax ought to have been taken as per section 151(ii) of the Act and the approval obtained under section 151((i) is bad in law. Since, the notice under section 148 of the Act is invalid and bad in law, the consequent assessment under section 147 of the Act is also liable to be quashed.Reliance has been placed on several decisions more specifically of the coordinate benches of ITAT, Mumbai in ITA No.1406/Mum/2024 in Surya Ferro Alloys P.Ltd, ITA No.6269& 6270/Mum/2025 in CLE P.Ltd, ITA No.3224/Mum/2024 in Ramlal Guthar wherein identical issue of validity of reopening and consequent reassessment have been decided in favour of the assesses on similar facts and legal position. 6. In the course of hearing before us, the ld.DR relied on the orders of authorities below. In respect of legal contentions made by the ld.AR, he did

The instant case the reassessment was initiated after period of three years from the end of the assessment year. The order u/s 148A(d) of the Act was passed by the AO on 26.07.2022. Fresh notice u/s 148 of the Act was issued by the AO on 26.07.2022. It is evident that before passing the order u/s 148A(d) as also before issuing notice u/s 148 of the Act, the AO had obtained prior approval of the Pr. Commissioner of Income-tax-19, Mumbai vide approval no. Pr.CIT-19/148/2022-23 dated 22.07.2022 as evident from page-35 and 44 of the paper book submitted before us during hearing of the case. These facts on record have not been controverted by the ld.DR. 8. We have carefully considered the facts of the case, relevant provisions of the Act and decisions relied upon. Grant of sanction by the appropriate authority is a pre-condition for the AO to assume juri iction under section 148 to issue a reassessment notice. Section 151 (ii) of the new regime prescribes a higher level of authority if more than three years have elapsed from the end of the relevant assessment year. We find merits in the contention of the ld.AR that case of the assessee is covered by section 151(ii) of the Act which provides that where the notices for reassessment are issued

Since we have already quashed the assessment order under section 147 of the Act based on the above proposition itself, other grounds have become academic and therefore, do not warrant any adjudication. 10. In the result, appeal of the assessee is allowed. Order pronounced in the open court on 19.05.2025. NARENDER KUMAR CHOUDHRY PRABHASH SHANKAR (न्याययक सदस्य /JUDICIAL MEMBER) (लेखाकार सदस्य/ACCOUNTANT MEMBER)