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Facts
The assessee filed an appeal against the CIT(A)'s order which dismissed their appeal against a reassessment. A notice under Section 148 of the Income Tax Act was issued on 30.07.2022 for AY 2016-2017, reopening the assessment beyond three years. The approval for this reopening was obtained from the Pr.CIT-2, Kolkata, instead of the Pr.CCIT, leading to a disallowance of Rs.2,85,00,136/-.
Held
The Tribunal held that since the assessment was reopened beyond three years, the sanction for issuing a notice under Section 148 of the Act must be obtained from the Pr.CCIT, as per Section 151 and the Supreme Court's decision in Rajeev Bansal. As the approval was incorrectly obtained from the Pr.CIT, the notice issued under Section 148 and the subsequent reassessment proceedings are deemed invalid and quashed void ab initio.
Key Issues
Whether the reassessment proceedings initiated under Section 148 of the Act are valid when the required approval under Section 151 for reopening beyond three years was obtained from the Pr.CIT instead of the Pr.CCIT.
Sections Cited
148, 151
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Income Tax Appellate Tribunal, “C” BENCH, KOLKATA
Before: SHRI RAJESH KUMAR & SHRI PRADIP KUMAR CHOUBEY
(निर्धारण वर्ा / Assessment Year : 2016-2017) Madgul Services Private Ltd, Vs DCIT, Circle-11(1), Kolkata 20, Ballygunge Circular Road, Ballygunge, Kolkata-700019 PAN No. :AABCM 7691 K (अपीलधर्थी /Appellant) .. (प्रत्यर्थी / Respondent) निर्धाररती की ओर से /Assessee by : Shri Sunil Surana, AR रधजस्व की ओर से /Revenue by : Shri Mangtinlen Haokip, Sr.DR सुनवाई की तारीख / Date of Hearing : 28/07/2025 घोषणा की तारीख/Date of Pronouncement : 26/08/2025 आदेश / O R D E R
Per Rajesh Kumar, AM :
This is an appeal filed by the assessee against the order dated 28.12.2024, passed by the ld. CIT(A), National Faceless Appeal Centre, Delhi, for the assessment year 2016-2017.
The only issue raised by the ld. counsel of the assessee during the course of hearing was that the proceedings initiated u/s.148 of the Act is invalid as the case is reopened beyond a period of three years from the end of the assessment year based upon the invalid approval granted by the Pr.CIT u/s.151 of the Act.
Facts in brief are that notice u/s.148 of the Act was issued on 30.07.2022 and the impugned assessment year is 2016-2017. In para 3 of the notice u/s.148 of the Act, it is mentioned that the said notice is being issued after obtaining the prior approval of the Pr.CIT-2, Kolkata accorded on 28.07.2022 vide Reference No.AABCM7691K. The Assessing Officer finally passed the assessment order after calling information from the Rs.2,85,00,136/-. Ld.CIT(A) dismissed the appeal of the assessee and, hence, the assessee is in appeal before us.
After hearing the rival contentions and perusing the material available on record, we find that admittedly, the case of the assessee has been reopened after a period of three years from the end of the assessment year and, therefore, the sanction of ld. Pr.CCIT has to be obtained for issuing notice u/s.148 of the Act and not the ld. Pr.CIT whose approval was in fact obtained for issuance of notice. Therefore, the reopening of the assessment on the basis of the said notice is not sustainable in the eyes of law. The issue is no more res integra, as the Hon’ble Supreme Court in the case of Rajeev Bansal, reported in 469 ITR 46 (SC) has held vide para 114(d) that it is the Pr.CCIT who should grant sanction u/s.151 of the Act since the reopening is after three years. We also note that the said decision of the Hon’ble Apex Court has been followed in series of decisions by the various Tribunal and Hon’ble High Courts. Some of the decisions wherein the decision of the Hon’ble Supreme Court has been followed, are as under :- i) Shri Devang Ajit Jhaveri, dated 29.01.2025 (AY : 2016-2017); ii) Sakshi Ratneshchand Jain, dated 10.02.2025 (AY : 2016-2017); iii) Kusum Healthcare Pvt. Ltd., order dated 05.03.2025 (AY: 2016- 2017)(Delhi High Court); iv) Chandrakant Viththal Bhopi, ITA No.2405/Pune/2024, dated 07.05.2025 (AY : 2016-2017).
In view of the above, we quash the invalid notice issued u/s.148 of the Act holding the same as void ab initio as the same is based upon the