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Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assesses is preferred against the order dated 23.10.2024 passed in Appeal no. NFAC/2015-16/10299639 by the Ld. Commissioner of Income– tax(Appeals)/ National Faceless Appeal Centre (NFAC) [hereinafter referred to as the “CIT(A)”] under section 250 of the Income-Tax Act, 1961 [hereinafter referred to as "Act"] for the Assessment year [A.Y.] 2016-17. The assessee has taken the following grounds: “ Ground 1: On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax (Appeals) -NFAC erred in confirming addition of Rs. 25, 37,430/- made by Assessing Officer U/s. 69A of the Income Tax Act, 1961 treating the cash deposited in account maintained with M/s. Shri Renuka Mata Multi State Urban Co-op. Credit Soc. as unexplained investment. Ground 2: The order made u/s 147 r.w.s. 144 read with section 144B of the Income Tax Act, 1961 by the learned Assessing Officer is bad-in-law, ultra virus and without appreciating the facts and law in their proper perspective and is liable to be annulled.
Mukesh Kumar Bhawarlal Jain The appellant crave leave to add, amend, alter and / or vary any of the grounds of appeal before or at the time of hearing.” The assessee has further vide application dated 24.02.2025 raised following additional ground of appeal no. 1,2,3 “Additional Ground No.
01. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding the order u/s 148A(d) of the Act, dated 27.07.2022 and notice issued u/s 148 of the Act, dated 27.07.2022 as valid without appreciating the fact that the said order and notice were without jurisdiction as the prior approval of the specified authority was not in accordance with the provisions of section 151(ii) of the Act. Additional Ground No.
02. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in holding the notice issued u/s 148 of the Act, dated 27.07.2022 as valid without appreciating the fact that the said notice is void ab initio since it does not bear any Document Identification Number (DIN) as mandated by the Circular No. 19/2019 issued by the CBDT. Additional Ground No.
03. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in holding the notice issued u/s 148 of the Act, dated 27.07.2022 as valid without appreciating the fact that the said notice was issued by the Ld. Jurisdictional Assessing Officer and not by the National Faceless Assessment Centre in contravention of the faceless scheme and notification issued by the Central Board of Direct Taxes in Notification no. 18 of 2022. The appellant craves to add, alter, classify, reclassify, delete or modify any of the above grounds of appeal.”
2. At the time of hearing the learned authorized representative (Ld. AR) of the assessee submit that he is not praising additional ground no. 2 and 3. Thus, such additional ground no. 2 and 3 is dismissed as not praised. In support of additional ground no. 1, the Ld. AR of the assessee submits that case of assesse for AY 201-17 was reopened after three years from the end of relevant assessment years. Admittedly the escaped income is less than Rs. 50,00,000/-. Such fact in mentioned in order under section 148A(d) dated 27.07.2022, Thus, Mukesh Kumar Bhawarlal Jain as per amended provision, the approval of reasons recorded should have been obtained from Principle Chief Commissioner of Income tax (PCCIT). However, as per order under section 148A(d) such approval was given by Pr. CIT-19. Thus, the approval was not obtained in accordance with provision of section 151(ii) of the Act. Therefore, action initiated in the basis of invalid notice under section 148 is void ab initio. Once, the notice under section 148 is held invalid, subsequent action initiated thereto will not survive. In support of his submissions, the Ld. AR of the assessee relied upon the decision of Mumbai Bench in ACIT V. Manish Financial in and 5050/Mum/2024 and Co No. 231 and 230/Mum/2024on 02.12.2024.
On the other hand, the Ld. DR for the revenue submits that in the present case order under section 148A(d) was passed on 27.07.2022. Notice under section 148 dated 27.07.2022 was issued after taking prior approval of competent authority in accordance with the provision of section 151(ii) of the Act. Copy of approval is also place on record.
We have considered the rival submission of both the parties and have gone through the order of lower authorities carefully. We find that the case of assessee pertains of A.Y. 2016-17. We find that pursuant to the direction of Hon’ble Supreme Court in the case of Ashish Agarwal (2023) (1) SCC 617, the AO passed order under section 48A(d) and issued notice under section 148 on 27.07.2022. In the notice itself, the AO recorded that such notice is issued after obtaining prior approval of Pr. CIT-19 accorded on 25.07.2022. We find that three year of period for A.Y. 2016-17 elapsed on 31.03.2020. Thus, as per the spirit of Supreme Court decision in Union of India v. Rajiv Bansal (2024) 167 3 Mukesh Kumar Bhawarlal Jain taxmann.com 70(SC), the approval of reasons recorded should have been obtained from Pr. CCIT, whereas the approval is opted from Pr. CIT as mentioned in the notice itself. Thus, notice under section 148 is invalid. Once, notice is invalid, subsequent action initiated thereto is void ab initio. In the result, additional ground no. 1 is allowed. Considering the fact that we have allowed additional ground of appeal
/legal issue. Therefore, adjudication on merit has become academic.
5. In the result, appeal of the assessee is allowed. Order pronounced in open court on 23.04.2025.