ITO WARD 41(1)(1), MUMBAI, KAUTILYA BHAVAN , BKC, MUMBAI vs. ARVIND VELJI GADA, MUMBAI

KANT, AM peals by the assessee and Reven
09.02.2024 passed by the Ld. C
) – National Faceless Appeal C
] for assessment year 2016-17. ised by the assessee are reprodu
1,01,85,745/-:
T(A) erred in upholding the assessme disallowance of LTCG of Rs.
1, minus Rs 10,00,000/-) and treating the s the sale consideration of Rs. 1,01,85,745
appreciating that the shares were dea and consideration for purchase and hannel, all the primary evidence like con relevant period, ledger of broker, Sale c es Ltd along with Ledger, D-mat stateme ere is no adverse report or action tak e or his broker HDFC Securities Ltd in re
A) erred in upholding the Assessment o nuine on basis of general information with erial/ evidence showing assessee involve of accommodation entry, more so when t which is revealed from his portfolio.
A) has relied on judgments totally inappl nd has also based his addition on mere s contrary to material available on record a e needs to be deleted.
(A) has erred in law and on facts in re
1,85,745/- in the hands of assessee w opportunity of cross examining the parti
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nue are directed
Commissioner of Centre, Delhi [in uced as under:
ent order by ,01,85,745/- same as non
5/- u/s. 68 of alt on stock sales were ntract notes, contract note ent, etc were ken by SEBI egards to the rder treating hout bringing ement in the the Assessee licable to the uspicion and and as such, estricting the without giving ies on whose statement/investiga violating the principl
5. The Ld CIT(A) err
69C of the Act being charges @3% of Rs.
II. Reopening of As 6. The learned CIT juri iction to issue notice u/s 148 date
30/07/2022 as aft manner, therefore th
7. The learned CIT ( notice beyond period per provisions of a Commissioner or Pr
Director General how
8. The CIT(A) erred
115BBE of the Act
2.1 The grounds rai
1. Whether on the fa the Ld. CIT(A)has er by the AO on accou giving any cogent fin
2. "Whether on the fa the Ld. CIT(A)was ju the assessee, ignori order of AO by hold such a steep rise of transaction was pre-
3. " Whether on the f the Ld. CIT(A)was ju the assessee when been confirmed by ITA No. 15

tion reports the assessing officer had rel les of natural justice.
red in up holding the addition of Rs. 3,3
alleged expenditure incurred in nature of 1,11,85,745/-.
ssessment
T (A) failed to appreciate that the JA show cause notice u/s 148A(b) dated 2
ed 31/07/2022 and pass order u/s 14
fter 29/03/2022 same can be done in he reassessment proceedings is bad in law
(A) failed to appreciate that the AO issue d of three years, approval was required to amended section 15lof the Act from Pri rincipal Director General or Chief Com wever approval is from PCIT-1. d in upholding the levy of tax rates pr t.
ised by the Revenue are reprodu acts and in the circumstances of the case rred in deleting the addition of Rs. 10,00, unt of claim of Bogus LTCG in penny s ndings for deleting the addition?
facts and in the circumstances of the case ustified in allowing partial relief of Rs. 10
ng the fact that the CIT(A) has himself c ding that the assessee could not conclus f the price of the penny stock company
-arranged one and make believe transact facts and in the circumstances of the case ustified in allowing partial relief of Rs. 10
n the entire addition, except of Rs.10,0
CIT(A)?"
Arvind Velji Gada
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lied, thereby,
35,572/-u/s.
f commission
AO have no 28/05/2022,
48A(d) dated n a faceless w.
ed reopening o be taken as incipal Chief missioner or rovided u/s.
uced as under:
e and in law,
000/-, made stock without e and in law,
0,00,000/- to confirmed the sively justify and that the tion?
e and in law,
0,00,000/- to 00,000/- has 3. Before us, the additional grounds d relevant additional gr
I. Reopening is ba
1. The learned CIT juri iction to issue notice u/s 148 date
30/07/2022 as aft manner, therefore th
2. The learned CIT ( notice beyond period per provisions of am
Commissioner or Pr
Director General how
3.1 The additional g not requiring investi on the issue in disp adjudication in view o the case of NTPC Ltd
4. Briefly stated, return of income for declaring total incom by the assessee was 1961 (in short ‘the received that assesse of purchase and sale
Re-construction Com
ITA No. 15

Ld. counsel for the assessee duly signed and verified by the rounds are reproduced as under ad in law:
T (A) failed to appreciate that the JA show cause notice u/s 148A(b) dated 2
ed 31/07/2022 and pass order u/s 14
fter 29/03/2022 same can be done in he reassessment proceedings is bad in law
(A) failed to appreciate that the AO issue d of three years, approval was required to mended section 151of the Act from Pri rincipal Director General or Chief Com wever approval is from PCIT-1. grounds raised being purely lega gation of fresh facts, after hea pute, we admitted the addition of the decision of the Hon’ble Su d. 229 ITR 283 (SC).
facts of the case are that the the year under consideration on me at Rs.3,93,480/-. The return s processed u/s 143(1) of the Act’). Subsequently, in view ee availed ‘bogus long term capi e of penny stocks of scrip nam mpany Ltd’., the Assessing O
Arvind Velji Gada
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e has also filed e assessee. The r:
AO have no 28/05/2022,
48A(d) dated n a faceless w.
ed reopening o be taken as incipal Chief missioner or al in nature and aring the parties nal grounds for upreme Court in e assessee filed n 27.06.2016 by n of income filed
Income-tax Act, of information ital gain’ by way mely ‘Ojas Asset
Officer recorded reasons to believe accordingly, issued n assessee objected
Subsequently, due to of Union of India &
taxmann.com 64(SC upon was supplied o the above notice on 1
the objections of the Act on 30.07.2022 an on 30.07.2020. Ther were issued and af assessee, the Asses
23.05.2023 thereby
Rs.1,11,85,745/- as of the Act which was On further appeal, th aggrieved both the a the Tribunal by way o
5. Before us, the a to 1 to 311. 6. Addressing the the assessee submi issued reopening no ITA No. 15

e that income escaped as notice u/s 148 of the Act on 1
to above reassessment o Hon’ble Supreme Court judgm
Ors v. Ashish Agarwal reporte
), a fresh notice was issued/
on 28.05.2022. The assessee fi
10.06.2022. The Assessing Offic assessee and passed order u/s nd a fresh notice u/s 148 of the reafter, statutory notices u/s 1
fter considering submission/r ssing Officer completed the treating the alleged long term unexplained cash credit in term s taxed at special rate u/s 115
he Ld. CIT(A) allowed part relie assessee and the Revenue are i of raising grounds as reproduce assessee filed a Paper Book con additional ground No. 2, the tted that in the case, the As otice beyond period of the th
Arvind Velji Gada
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ssessment and 19.05.2021. The proceedings.
ment in the case ed in (2022) 138
material relied iled objection to cer addressed all s 148A(d) of the e Act was issued
42(1) of the Act esponse of the assessment on capital gain of ms of section 68
5JBE of the Act.
ef and therefore, in appeal before d above.
ntaining pages 1
Ld. counsel for ssessing Officer hree years and therefore, approval/s taken from the Princ
Principal Director G
General of Income-ta of the Act, whereas
Principal Commissio the assessee referred of the notice u/s 148
the said notice it is obtaining prior appr
Further, the Ld. cou the Act, which is ava been also been issue his letter dated 28.07
of the Act and subm provided under provi issuing notice u/s 1
years from the end o the approval for the i obtained from PCCIT for computing the pe period referred to in of Rajeev Bansal ( reproduced as under ITA No. 15

sanction for issue of notice was cipal Chief Commissioner of In General or Chief Commission ax under the amended provision s the approval has been obta ner of Income-tax (PCIT). The d to page 41 of the Paper Book
8 of the Act and submitted that o mentioned that notice has be roval of the PCIT, Mumbai dat unsel also referred to the order ailable on paper book page 31- d with prior approval of the PCI
7.2022. The Ld. counsel referred mitted that even after excluding iso to section 151 of the Act, th
48 in the case of the assessee of the relevant assessment year issue of the notice u/s 148 of th
T or CCIT only. The assessee h eriod of the three years based decision of Hon’ble Supreme Co
2024) 167 taxmann.com 70
:
Arvind Velji Gada
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s required to be ncome (PCCIT)or ner or Director ns of section 151
ained from the Ld. counsel for which is a copy on para No. 3 of een issued after ted 28.07.2022. u/s 148A(d) of -39, which has IT, Mumbai vide d to section 151
the time period he time period in exceeded three r and therefore, he Act was to be has filed a chart on the survival ourt in the case
(SC), which is Sr. No.
As per S
Bansal Par
1. The deeme
01/05/202
Assessing
[days betw
2021] to is regime.
2. The time
Officer afte
Assessee. I submits th
Assessing from 18 Ju notice u/s 3. Thus, in th issuance o regime will
4. JAO has t time limit.
6.1 In the case n
19/05/2021 invokin limit under old provi
Hon’ble High Court i amended w.e.f. 1/04
under Taxation and Certain Provisions ) available to old provi the Hon’ble Supreme
ITA No. 15

SC Decision in case of Rajiv ra 112
As per A ed show cause notice issued on 21 under the old regime. The Officer will have sixty-one days ween 1 May 2021 and 30 June ssued notice u/s 148 of the new
The de notice is under th
The As have F between
June 20
u/s 148
starts ticking for the Assessing er receiving the response of the In this instance, if the assessee he response on 18 June 2022. The officer will have Sixty-one day une 2022 to issue a reassessment
148 of the new regime
Pursuan decision
148A(b)
The As response
[pg 22]
will hav
10 Jun reassess of the ne his illustration, the time limit for of a notice u/s 148 of the new end on 18 August 2022. The time a notice regime
2022. to issue notice under surviving para 114 clause (h)
The Ass notice u
30 July the pe
Therefor required and not notice u/s 148 of the Act w g old 147 provisions on the pr isions got extended due to TOL in writs held that in view of pr
4/2021, the benefit of extensio d Other Laws ( Relaxation and Act,m2020 ( in short ‘TOLA’
sions and in the case of Ashish e Court held that TOLA will app
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Assessee Case eemed show cause ssued on 19/05/2021
he old regime. [pg 6]
ssessing
Officer will
Forty-two days [days n 19 May 2021 and 30
021] to issued notice
8 of the new regime.
nt to Ashish Agarwal n the AO issued notice on 28/5/2022. ssessee submits its e on 10 June 2022. The Assessing officer ve Forty-two day from ne 2022 to issue a sment notice u/s 148
ew regime e limit for issuance of e u/s 148 of the new will end on 22 July sessing Officer issued u/s 148 of the Act on 2022 which is beyond eriod of 3
years.
re
Sanction was d from PCCIT from PCIT.
was issued on remise that time
LA, but, various rovisions of 147
on of time limit d Amendment of ’) would not be h Agrwal (supra), ply on amended provisions of section Ashish Agrawal (sup the Act under old p
30/06/2021 and he new procedure u/s and commence the fu subject to amende provided two weeks t of relevant material proceedings. The bansal (supara) trea under old provisions provisions in complia in Ashish Agrawal (s period which would which would have b provisos upto 30/06/
extended under TOLA
6.2 In the case noti
19/05/2021 , so the AO upto 30/06/202
excluding the period assessee. which has supply of material/
ITA No. 15

essee filed its response on 10.06
er got 42 days from 10.06.20
u/s 148 of the Act of unde ent. Thus, survival period of 42
s the Assessing Officer in the in 8 of the Act on 30.07.2022, wh of three years from the e tion of the Pr. Chief Commissi as required under the amended as sanction has been obtained ome-tax, Mumbai (PCIT) as evid
0/07/2022 , a copy of which is on has not been obtained from d under the law, therefor edings are invalid and accordin he Ld. counsel for the assesse ordinate Bench of the Tribunal hi in ITA No. 1617/Mum/202
eproduced as under:
n the present case, it is discernible that n 148 of the Act was issued not only in co ons of section 151 as the sanction of the thority was not obtained, but the same is Arvind Velji Gada
9
582 & 2026/MUM/2024
.2022 therefore,
22 for issue of er the amended
2 days ended on nstant case has hich is otherwise nd of relevant oner of income- provisions w.e.f d from Principla dent form notice available on PB the appropriate re, the entire ngly liable to be ee relied on the l in the case of 24. The relevant t the notice ontravention e concerned s also time- barred as per was issued a escaped asse lakh. Accordin issued under law and there proceedings a section 147 r/
6.5 The Ld. counse
Bench of in the case
1406/Mum/2024 for Tribunal quashed the specified authority.
reproduced as under “8.1. From th two rows rel regime presc authority. In Hon'ble Court
(supra) the pr authorities sp brings clarity notice u/s.14
Agrawal (sup mentioned w actions that f
Thus, the obje para 78, the Assessment Y that the auth grant sanction on the issue stated that t approval of th new regime b notice u/s.14
waived off th and Section 1
148A(d) and S
ITA No. 15

r the provisions of section 149 of the Act a after three years and the amount alleg essment is only Rs.43,32,000, i.e. less ngly, we are of the considered view tha r section 148 of the Act is void ab initio efore is quashed. Consequently, the entire and impugned final assessment order pa
/w section 144C(13) of the Act is also qua l also relied on the decision of e of Surya Ferrous Alloys Pvt.
r assessment year 2017-18 w e reassessment in absence of sa
The relevant finding of th
:
he above, we note that in para 73, in the late to provisions of Section 151(i)(ii) o cribing the time limit as well as the para 75, it is very categorically mentio t that after 01.04.2021, in terms of Ashis rior approval must be obtained from the a pecified u/s.151 of the new regime. This a y on the aspect of obtaining approval f
48 which are fall out of the decision pra). In para 77, objective of section 3(1) hich is to relax the time limit for comp fall for completion from 20.03.2020 to 3
ective is specific for providing temporal fl same has been explained by an exam
Year 2017-18 which also in specific term hority specified u/s.151(i) of the new n till 30.06.2021. Thus, while concluding obtaining approval, Hon'ble Court has the Assessing Officer is required to o he specified authority according to section before passing an order u/s.148A(d) or 48. According to the Hon'ble Court, tho he requirement obtaining prior approval u
148Ab, it did not waive the requirement
Section 148. Arvind Velji Gada
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582 & 2026/MUM/2024
as the same ged to have than Rs.50
at the notice and bad in e reopening assed under ashed.”
the Co-ordinate
Ltd. in ITA No.
wherein also the anction from the he Tribunal is e table last of the new e specified ned by the sh Agrawal appropriate abundantly for issue of in Ashish of TOLA is pliance with 31.03.2021. flexibility. In mple taking ms mentions regime can g in para 81
specifically obtain prior n 151 of the r issuing a ough it had u/s.148A(a) t for section 8.2. Taking in Sr. DR and k observations issue we are aspect of "wh notice u/s.14
been issued.
escalation vis
In this respec
75 that the pr authorities sp issued in ter
Reference by for issuing no is no hierarc issuing notice mandated by Repeatedly, illustration th survives mak requirements the prior app
151 of new re
8.3. In the pr
18 and the tim falls betwee provisions of Amendment o
Accordingly,
TOLA extend
30.06.2021 b facts and law the end of the notice u/s.14
since the not issued beyon relevant Asse provisions of specified auth
Chief Comm
Commissione the approval
Tax-17, Mum specified aut u/s.148 unde invalid and ba
ITA No. 15

nto consideration the submissions made keeping the same in juxtaposition with and findings of the Hon'ble Court, we no presently addressing raised before us is hen" for the procedural compliance for i
48 but on the aspect of "by whom" it oug
Ld. Sr. DR has contended that there is h s-a-vis obtaining approval for issuing notic ct, Hon'ble Court has very categorically h rior approval must be obtained from the a pecified u/s.151 of the new regime for rms of Ashish Agrawal (supra) after 0
ld. Sr. DR to Section 149(1)(a) deals wit otice u/s.148. Contention of the ld. Sr. DR chical escalation for obtaining prior ap e u/s.148 is not in coherence with the y the Hon'ble Apex Court as enuncia
Hon'ble Court has stated including b at TOLA extends time line from the old re king the notice validly issued subject to th of Section 151 under the new regime. A proval requirement is mandated under egime.
resent case, the relevant Assessment Ye me limit of three years lapsed on 31.03.2
en 20.03.2020 and 31.03.2021 dur f Taxation and Other Laws (Relax of Certain Provisions) Act, 2020 (TOLA) w the amended provisions under the Act ded the time limit for granting of ap by the specified authority. Thus, on the ab w, in the present case, three years had l e Assessment Year when the order u/s.1
48 was issued on 30.07.2022. In the pr tice u/s. 148 and order u/s. 148A(b) nd the period of three years from the essment Year, case of the assessee falls f section 151(ii) of the amended law w hority for grant of approval is specified a issioner or Principal Director Genera r or Director General. Contrary to this re obtained is by Principal Commissioner mbai. Accordingly, since a proper sanct thority had not been obtained for issu er the applicable provisions of law, sai ad in law.
Arvind Velji Gada
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582 & 2026/MUM/2024
e by the ld.
h the above ote that the s not on the issuance of ght to have hierarchical ce u/s.148. held in para appropriate the notices
01.04.2021. th time limit
R that there pproval for e guidelines ated above.
by way of egime which he approval
Accordingly, the section ar is 2017-
2021 which ring which xation and would apply.
t read with pproval till bove stated lapsed from 48A(d) and resent case, have been end of the s within the whereby the as Principal al or Chief equirement, r of Income tion by the ue of notice id notice is 8.4. Keeping uncontroverte of the Hon'ble
Rajiv Bansal has not been with the prov new regime, s years from th the said notic the impugne impugned re quashed.”
6.6 In view of the ab in the case of the proceedings have bee the Revenue are re dismissed.
7. In the result, b are dismissed.
Order pronoun (KAVITHA RA
JUDICIAL M
Mumbai;
Dated: 27/03/2025
Rahul Sharma, Sr. P.S.
ITA No. 15

g in juxtaposition the undisputed ed facts as stated above and the judicia e Supreme Court in the case of Ashish Ag
(supra), we hold that sanction by specifie obtained by the ld. Assessing Officer in visions contained in section 151 of the Ac since notice u/s.148 has been issued be he end of the relevant Assessment Year. A ce issued is invalid and thus quashed. R ed re-opening proceedings so initiated e-assessment order passed thereafter bove discussion, the reassessm assessee are quashed. As th en quashed, these appeals by th endered infructuous. Accordin both the appeals of the assesse ced in the open Court on 27/0
/- AJAGOPAL)
(OM PRAK
MEMBER
ACCOUNTA

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and the al precedent garwal and ed authority accordance ct under the eyond three
Accordingly,
Resultantly, d and the r are also ment proceedings e reassessment he assessee and ngly, same are ee and Revenue
03/2025. d/-
KASH KANT)
ANT MEMBER

Copy of the Order forwarded
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.

////

ITA No. 15

d to :

BY ORDER

(Assistant Regi

ITAT, Mum

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R, istrar) mbai