Loading judgment…
Facts
The assessee filed a return of income for AY 2016-17. The AO noticed that certain transactions related to the sale of shares in EML and GBFL amounting to Rs. 81,84,838 were not included in the return. Consequently, the AO reopened the case under Section 147 of the Income Tax Act, 1961, by issuing a notice under Section 148. The AO eventually disallowed the Long Term Capital Gains and added Rs. 81,84,838/- as unexplained income.
Held
The Tribunal held that the reassessment notice issued under Section 148 was invalid and bad in law because the proper sanction/approval from the specified authority as per Section 151 of the Income Tax Act, 1961, was not obtained. The reassessment proceedings and the consequential assessment order were quashed.
Key Issues
Whether the notice issued under Section 148 was valid without obtaining the prior approval from the specified authority under Section 151 of the Income Tax Act, 1961, especially considering the time limits prescribed.
Sections Cited
147, 148, 151, 10(38), 69A, 115BBE, 143(3), 144B, 250, 139, 148A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 1263/JPR/2025
PER DR. S. SEETHALAKSHMI, J.M. This is an appeal filed by the assessee against the order of ld. CIT(A), National Faceless Appeal Centre (NFAC) Delhi dated 31.07.2025 passed under section 250 of the Income Tax Act, 1961, for the assessment year 2016-17. 2. The assessee has raised the following grounds of appeal :-
1. 1. “1. That on the facts and circumstances of the case, the ld. Assessing Officer has grossly erred in law as well as on facts in initiating re-assessment /JPR/2025 Sonu Agarwal, Jaipur. proceeding u/s 147/148 of the Income Tax Act, 1961 and same is void ab initio and deserves to be quashed.
2. That on the facts and circumstances of the case, the ld. Assessing Officer grossly erred in not providing material on the basis of which the notices were issued and also not allowing opportunity of cross examination.
3. That on the law and in the facts and in the circumstances of the case, the ld. Lower authorities grossly erred in rejecting Long Term Capital Gain earned from sale of shares amounting Rs. 81,84,838/- claimed by the assessee appellant as exempt u/s 10(38) of the Act.
4. That on the law and in the facts and in the circumstances of the case, the ld. Lower authorities grossly erred in adding Rs. 49,552/- on account of commission paid for acquiring accommodation entries by the assessee appellant and treating the same as undisclosed expenditure.
5. The appellant craves leave to add, alter, modify or amend any ground on or before the date of hearing.”
The brief facts of the case are that the assessee is an Individual and filed her return of income under section 139 of the Income Tax Act, 1961 on 22.07.2016 declaring total income of Rs. 9,17,230/- for the assessment year 2016-17. As per specific information received through ITBA Software, the assessee has made transactions of Rs. 81,84,838/- during the FY 2015-16 relevant to AY 2016-17 on sale of shares in the scrip named as EML and GBFL which has been established as penny stock. On going through the return of total income of Rs. 9,17,230/- filed by the assessee on 22.07.2016, the AO noticed that the income from above transactions has not been included in the return and therefore he observed that the same has not been offered for tax and due tax has not been paid. Consequently, case was reopened under section 147 of the IT Act, 1961 /JPR/2025 Sonu Agarwal, Jaipur. by issuing notice under section 148 of the IT Act, 1961 dated 08.04.2021 to the assessee. In compliance, the assessee filed his return of income on 21.05.2021 declaring his total income for the year under consideration at Rs. 9,17,230/-. Thereafter, in compliance to the Hon’ble Supreme Court of India decision dated 04.05.2022 in the case of UOI vs. Ashish Agarwal and consequent CBDT Instruction No. 01/2022/F. No. 279/Misc./M- 51/2022-ITJ dated 11.05.2022, a letter with information and material relied upon for initiating reassessment proceedings was provided to the assessee vide DIN ITBA/COM/F/17/2022-23/1043252147(1) DATED 30.05.2022 wherein the assessee was given a show-cause as to why the total transaction amount of Rs. 81,84,838/- shall not be treated as income chargeable to tax which has escaped the assessment within the meaning of provision of section 147 of the IT Act, 1961 for the A.Y. 2016-17. In compliance to the said show-cause, the reply furnished by the assessee on 11.06.2022 has been reproduced in the order under section 148A(d) dated 26.07.2022, are as under : “ I had purchased shares of M/s. Appu Marketing and Manufacturing Limited/Ejecta Marketing Limited (Listed in Bombay Stock Exchange), Script code 538653 and declared long term capital gain of Rs. 80,46,677/- which was exempted u/s 10(38) of the I.T. Act, 1961 which had already been declared in the return of income for A.Y. 2016-17 filed on 22.07.2016. All the payments were made and received through account payee cheques drawn by the concerned Stock Broker of Bombay Stock Exchange and duly /JPR/2025 Sonu Agarwal, Jaipur. recorded in the bank accounts. That an amount invested in “penny” stocks gave rise to huge capital gains/loss in a short period does not mean that the transaction is “bogus” if the documentation and evidences cannot be faulted. Such penny stocks are allowed to trade in the Bombay Stock Exchange (BSE). That I fulfilled all the condition u/s 10(38) of the Income Tax Act, 1961. Moreover, I have erned the income strictly following the norms and guidelines of SEBI. I was not at all in a position to influence the purchase and sale prices of their shares. That the material/information provided by you has nothing adverse evidence to the axiomatic conclusion drawn by you that I had entered into an agreement with the broker or any other person to convert unaccounted money by claiming fictitious LTCG which is exempt u/s 10(38) in a pre-planned manner to evade taxes. That your goodself has not provided all the material i.e. attachments to case related information detail from insight portal on which you relied upon as directed in para 8(i) of the order dt.4th May, 2022 passed by the Hon’ble Supreme Court in the case of Union of India & Ors. Vs. Ashish Agarwal (Civil Appeal No. 3005 of 2022 [reported as (2022) 326 CTR (SC) 473; (2022) 213 DTR (SC) 217]. Your goodself is also requested to provide relevant portion of statement(s) in which entry providers had taken my and/or our share broker i.e. Hem Securities Ltd. name in wrong doings so that we can file meaningful further our reply.
The assessee, further, in reply to AO letter dated 23.06.2022, submitted reply through e-proceedings dated 27.06.2022 that “That your goodself has not provided all the material i.e. attachments to case related information detail from insight portal on which you relied upon as directed in para 8(i) of the order dt. 4th May, 2022 passed by the Hon’ble Supreme Court in the case of Union of India & Ors. Vs. Ashish Agarwal /JPR/2025 Sonu Agarwal, Jaipur. (Civil Appeal No. 3005 of 2022 [reported as (2022) 326 CTR (SC) 473; (2022) 213 DTR (SC) 217]”. The AO considered the reply furnished by the assessee as well as objection raised but could not found it tenable. Accordingly, the AO passed order under section 148A(d) concluding that on the basis of material available on record, the case of the assessee is a fit case for issuance of notice under section 148 of the IT Act, 1961 for the AY 2016-17. Consequently, notice dated 26.07.2022 under section 148 of the I.T. Act, 1961 was issued to the assessee after obtaining prior approval of the Principal Commissioner of Income Tax-1, Jaipur accorded on 23.07.2022. Thereafter, notices under section 142(1) and 143(2) and Show Cause Notice were issued on various dates. In compliance to the above notices, the assessee furnished ledger, bank statement, demat account on 10.02.2023 and 15.02.2023. The assessee further filed letter along with Contract Note and DP holding statement on 11.05.2023. All the replies submitted by the assessee have been considered by the AO but could not found the same acceptable. Hence, Long Term Capital Gains of Rs. 81,84,838/- claimed by the assessee from sale of the stock of Goenka Business and Finance Limited and Ejecta Marketing Ltd. has been disallowed treating the same as assessee’s own unaccounted income in the guise of bogus LTCG. The AO accordingly assessed the total income /JPR/2025 Sonu Agarwal, Jaipur. of the assessee at Rs. 91,02,068/- under section 147 r.w.s 143(3) r.w.s. 144B of the IT Act, 1961 by making addition of Rs. 81,84,838/- under section 69A read with section 115BBE of the IT Act, 1961 on account of unexplained money, vide his order dated 29.05.2023. Being aggrieved by the assessment order, the assessee preferred appeal before the ld. CIT (A). The ld. CIT (A) after discussing the matter, dismissed the appeal of the assessee by observing that “ In view of failure on part of appellant to discharge burden of proof and explain nature and source of transaction, in my opinion, learned assessing officer has rightly made addition in dispute, which does not require any interference. Hence, action of AO in treating entire sale consideration of scrip of M/s. AAML/EML as unexplained cash credit within meaning of section 69A of Act is in order and needs no modification. Accordingly, order of Assessing Officer is hereby upheld and addition of Rs. 81,84,838/- is confirmed.” Being aggrieved, the assessee has filed the present appeal before us on the grounds reproduced hereinabove.
Before us, the ld. AR of the assessee reiterated the submissions as were made before the lower authorities. The ld. AR further submitted his written submissions, in support of his case, which are being reproduced hereunder :-
“GROUND NO.1 :Proceeding initiated u/s 147/148 of the Income Tax Act, 1961 is void ab initio and deserves to be quashed.
A notice dated 08.04.2021 for A.Y. 2016-2017 was initially issued to the assessee appellant u/s. 148 of the Act by the ITO, Ward 1(3), Jaipur which was served on 08.04.2021.
Subsequently, an order dated 26.07.2022 was passed u/s. 148A(d) of the Act and a notice dated 26.07.2022 was issued u/s. 148 of the Act by the Assessing Officer. 2.1 The order u/s. 148A(d) & the notice u/s. 148 of the Act dated 26.07.2022 was issued after taking sanction from the ld. Principal Commissioner of Income Tax, Jaipur 1, Jaipur u/s. 151(i) of the Act, whereas after amendment made by the Finance Act, 2021, since more than 3 years had elapsed for the matters pertaining to A.Y. 2016-2017 & 2017-2018, the sanction had to be obtained u/s. 151(ii) of the Act from the ld. Principal Chief Commissioner of Income Tax, Jaipur. 2.2 The impugned notice dated 26.07.2022 issued u/s. 148 of the Act is thus bad in law in light of judgment of Hon’ble Supreme Court in the case of Union of India v. Rajeev Bansal [2024] 469 ITR 46 (SC) wherein it was held: iii. Sanction of the specified authority 73. Section 151 imposes a check upon the power of the Revenue to reopen assessments. The provision imposes a responsibility on the Revenue to ensure that it obtains the sanction of the specified authority before issuing a notice under Section 148. The purpose behind this procedural check is to save the assesses from harassment resulting from the mechanical reopening of assessments.128 A table representing the prescription under the old and new regime is set out below: Regime Time limits Specified authority Section Before expiry of four years from the end Joint Commissioner 151(2) of of the relevant assessment year the old regime Section After expiry of four years from the end of Principal Chief Commissioner or 151(1) of the relevant assessment year Chief Commissioner or Principal the old Commissioner or Commissioner regime Section Three years or less than three years from Principal Commissioner or 151(i) of the end of the relevant assessment year Principal Director or the new Commissioner or Director regime Section More than three years have elapsed from Principal Chief Commissioner or 151(ii) of the end of the relevant assessment year Principal Director General or the new Chief Commissioner or Director regime General 74. The above table indicates that the specified authority is directly co-related to the time when the notice is issued. This plays out as follows under the old regime:
/JPR/2025 Sonu Agarwal, Jaipur. (i) If income escaping assessment was less than Rupees one lakh: (a) a reassessment notice could be issued under Section 148 within four years after obtaining the approval of the Joint Commissioner; and (b) no notice could be issued after the expiry of four years; and (ii) If income escaping was more than Rupees one lakh: (a) a reassessment notice could be issued within four years after obtaining the approval of the Joint Commissioner; and (b) after four years but within six years after obtaining the approval of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner.
75. After 1 April 2021, the new regime has specified different authorities for granting sanctions under Section 151. The new regime is beneficial to the assessee because it specifies a higher level of authority for the grant of sanctions in comparison to the old regime. Therefore, in terms of Ashish Agarwal (supra), after 1 April 2021, the prior approval must be obtained from the appropriate authorities specified under Section 151 of the new regime. The effect of Section 151 of the new regime is thus : (i) If income escaping assessment is less than Rupees fifty lakhs: (a) a reassessment notice could be issued within three years after obtaining the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director; and (b) no notice could be issued after the expiry of three years; and (ii) If income escaping assessment is more than Rupees fifty lakhs: (a) a reassessment notice could be issued within three years after obtaining the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director; and (b) after three years after obtaining the prior approval of the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General.
76. Grant of sanction by the appropriate authority is a precondition for the assessing officer to assume jurisdiction under Section 148 to issue a reassessment notice. Section 151 of the new regime does not prescribe a time limit within which a specified authority has to grant sanction. Rather, it links up the time limits with the jurisdiction of the authority to grant sanction. 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. Thus, non-compliance by the assessing officer with the strict time limits prescribed under Section 151 affects their jurisdiction to issue a notice under Section 148.
77. Parliament enacted TOLA to ensure that the interests of the Revenue are not defeated because the assessing officer could not comply with the preconditions due to the difficulties that arose during the COVID-19 pandemic. Section 3(1) of TOLA relaxes the time limit for compliance with actions that fall for completion from 20 March 2020 to 31 March 2021. TOLA will accordingly 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 March 2020 and 31 March 2021, then the specified authority under Section 151(i) has an extended time till 30 June 2021 to grant approval. 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 March 2020 and 31 March 2021, then the specified authority under Section 151(2) has time till 31 March 2021 to grant approval. The time limit for Section 151 of the old regime expires on 31 March 2021 because the new regime comes into effect on 1 April 2021.
78. For example, the three year time limit for assessment year 2017-2018 falls for completion on 31 March 2021. It falls during the time period of 20 March 2020 and 31 March 2021, contemplated under Section 3(1) of TOLA. Resultantly, the authority specified under Section 151(i) of the new regime can grant sanction till 30 June 2021.
Under Finance Act 2021, the assessing officer was required to obtain prior approval or sanction of the specified authorities at four stages: a. Section 148A(a) – to conduct any enquiry, if required, with respect to the information which suggests that the income chargeable to tax has escaped assessment; b. Section 148A(b) – to provide an opportunity of hearing to the assessee by serving upon them a show cause notice as to why a notice under Section 148 should not be issued based on the information that suggests that income chargeable to tax has escaped assessment. It must be noted that this requirement has been deleted by the Finance Act 2022;129 c. Section 148A(d) – to pass an order deciding whether or not it is a fit case for issuing a notice under Section 148; and d. Section 148 – to issue a reassessment notice.
In Ashish Agarwal (supra), this Court directed that Section 148 notices which were challenged before various High Courts “shall be deemed to have been issued under Section 148-A of the Income Tax Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of Section 148-A(b).” Further, this Court dispensed with the requirement of conducting any enquiry with the prior approval of the specified authority under Section 148A(a). Under Section 148A(b), an assessing officer was required to obtain prior approval from the specified authority before issuing a show cause notice. When this Court deemed the Section 148 notices under the old regime as Section 148A(b) notices under the new regime, it impliedly waived the requirement of obtaining prior approval from the specified authorities under Section 151 for Section 148A(b). It is well established that this Court while exercising its jurisdiction under Article 142, is not bound by the procedural requirements of law.130 81. This Court in Ashish Agarwal (supra) directed the assessing officers to “pass orders in terms of Section 148-A(d) in respect of each of the assesses concerned.” Further, it directed the assessing officers to issue a notice under Section 148 of the new regime “after following the procedure as required under Section 148-A.” Although this Court waived off the requirement of obtaining prior approval under Section 148A(a) and Section 148A(b), it did not waive the requirement for Section 148A(d) and Section 148. Therefore, the assessing officer was required to obtain prior approval of the specified authority according to Section 151 of the new regime before passing an order under Section 148A(d) or issuing a notice under Section 148. These notices ought to have been issued following the time limits specified under Section 151 of the new regime read with TOLA, where applicable. 114. Conclusions 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 March 2020 and 31 March 2021, then the specified authority under Section 151(i) has extended time till 30 June 2021 to grant approval; /JPR/2025 Sonu Agarwal, Jaipur. 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 March 2020 and 31 March 2021, then the specified authority under Section 151(2) has extended time till 31 March 2021 to grant approval. 2.3 Hon’ble Bombay High Court in the case of Ramesh Bachulal Mehta v. ITO [2025] 8 TMI 1322 vide order dated 11.08.2025 subsequent to aforesaid judgment of Hon’ble Supreme Court in Rajeev Bansal (supra) has held: Reopening of assessment u/s 147 - no appropriate prior approval/sanction mandated u/s 151 - order passed beyond three years from the end of the relevant Assessment Year Grant of sanction by the appropriate authority is a precondition for the assessing officer to assume jurisdiction under section 148 to issue a reassessment notice. In the present case the period of three years from the end of the Assessment Year 2016-17 fell for completion on 31st March 2020. Since the expiry date fell during the time period of 20th March 2020 and 31st March 2021 contemplated under Section 3(1) of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (for short “TOLA”), the authority specified under Section 151(i) of the new regime could have granted sanction till 30th June 2021. On perusal of the order, dated 13.07.2022, passed under Section 148A(d) of the Act, we find that the aforesaid order was passed after taking approval from Principal Commissioner of Income Tax (Respondent No. 2). Since the aforesaid order was passed after the expiry of three years from the end of the Assessment Year 2016-17, as per the substituted provisions of re-assessment, the authority specified under Section 151(ii) of the Act (i.e. Principal Chief Commissioner or Chief Commissioner) was required to grant approval. Accordingly, we conclude that in the present case the approval has been obtained from the authority specified under Section 151(i) of the new regime instead of the authority specified under Section 151(ii) of the new regime. Thus, accordingly hold that the order dated 13.07.2022 passed u/s 148A(d) of the Act and the consequential notice issued under section 148 are bad in law for being violative of the provisions of Section 151(ii) of the Act. Hence they are required to be quashed and set aside. Assessee appeal allowed. 2.4 Hon’ble Delhi High Court in the case of H AND M HENNES AND MAURITZ RETAIL Pvt. Ltd. v. ACIT [2025] 5 TMI 1799 vide order dated 14.05.2025 subsequent to aforesaid judgment of Hon’ble Supreme Court in Rajeev Bansal (supra) has held: Reopening of assessment - Sanction for issue of notice u/s 151 - HELD THAT:- The question as to which would be the specified authority u/s 151 of the Act in respect of approval of notices u/s 148 that were issued pursuant to proceedings that were initiated under Section 148A of the Act prior to 30.06.2021 [the extended limitation under TOLA] has been considered by this Court in several cases including Twylight Infrastructure Pvt. Ltd. [2024 (1) TMI 759 - DELHI HIGH COURT] and Abhinav Jindal HUF [2024 (9) TMI 1282 - DELHI HIGH COURT] This Court has consistently held that TOLA would have no relevance for determining the specified authority whose approval was mandatory u/s 151 of the Act for issuance of a notice u/s 148 of the Act. Question as to which is the specified authority whose approval is mandatory, would depend on whether the notice under Section 148 of the Act was issued within a period of three /JPR/2025 Sonu Agarwal, Jaipur. years from the end of the relevant assessment year or thereafter. The impugned notice is liable to be set aside on this ground alone. Assessee appeal allowed. 2.5 Hon’ble Madras High Court in the case of Core Logistic Company v. ACIT [W.P. No. 18168/2023] vide order dated 05.06.2025 subsequent to aforesaid judgment of Hon’ble Supreme Court in Rajeev Bansal (supra) has held: A perusal of Section 151(i) would show that, the specified authority for the purpose of issuing notice under Section 148 within a period of three years from the end of the relevant assessment year is, the Principal Commissioner or Principal Director or Commissioner or Director. Further, in terms of provision of Section 149, three year time period is fixed for issuance of 148 notice, in the event of the amount is below 50 lakhs. In the present case, the amount involved is Rs.3,65,09,748/-, which is more than 50 lakhs. 148 notice was issued on 28.07.2022, which is beyond the period of three years. So admittedly, the approval has to be obtained from the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General as defined under Section 151(ii). But, in the present case, the approval was obtained from the Principal Commissioner in terms of Section 151(i) and no approval was obtained before issuance of 148 notice in terms of provision of Section 151(ii), which is mandatory. Therefore, the notice under Section 148 was issued in the present case in violation of provision of Section 151(ii) of the Income Tax Act. In view thereof, the initiation of proceedings itself is without any jurisdiction. Hence, the same is liable to be quashed. 2.6 Hon’ble Jurisdictional ITAT, Jaipur Bench in the case of Late Shri Jitendra Nagar v. ITO [ITA 1382/JPR/2024] vide order dated 01.10.2025 after considering the aforesaid judgment of Hon’ble Supreme Court in Rajeev Bansal (supra) has held:In the case in hand also notice under section 148 dated 25.07.2022was issued beyond three years from the end of the assessment year, hence it required the approval of Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General of Income-tax as per section 151(ii) of the Income Tax Act, 1961, but the AO has failed to obtain proper approval from the specified authority before issuing notice under section 148 of the Act, 1961. Since the facts of the present case of the assessee is similar to the case that has been decided by the Coordinate Bench of the Tribunal, Jaipur in the case of RSD Containers Pvt. Ltd. in dated 06.08.2025, by quashing the notice under section 148, we are of the considered view that the assessee deserves to succeed. Thus, on being consistent with the above order which has been passed considering the decision of the Apex Court in the case of Rajeev Bansal (supra) and Ashish Agarwal (supra), we quash the notice issued under section 148 of the IT Act, 1961, as bad in law and accordingly the consequential assessment order is hereby quashed. 2.7 Hon’ble Jurisdictional ITAT, Jaipur Bench in the case of ACIT v. Hans Raj Agarwal [2025] 4 TMI 1206 vide order dated 12.03.2025 after considering the aforesaid judgment of Hon’ble Supreme Court in Rajeev Bansal (supra) has held: Reopening of assessment u/s 147 - approval of the authority specified under section 151 accorded or not? - scope of New Regime - HELD THAT:- From the observations made by the Hon’ble Apex Court in Rajeev /JPR/2025 Sonu Agarwal, Jaipur. Bansal’s case [2024 (10) TMI 264 - SUPREME COURT (LB)] it transpires that though prior approval u/s 148A(b) and 148(d) was waived in terms of decision in the case of Ashish Agarwal case, for issuance of notice u/s 148A(a) and 148 on or after 1-04-2021, prior approval was required to be obtained from the appropriate authority specified u/s 151 of the New Regime. As per report from the AO, the assessee was issued notice under section 148 of the Act after obtaining sanction under section 151 from the JCIT, Range-4, Jaipur; that subsequently, an opportunity of being heard as per provisions of section 148A(b) of the Income Tax Act, 1961 was provided to the assessee with prior approval from the competent authority vide DIN and Notice dated 25.5.2022. In said report, the Assessing Officer has further reported that the competent authority for approving the proposal order u/s 148A(d) was Pr.CIT-2, Jaipur. In this way, the Assessing Officer has admitted the case of the assessee that for the relevant Assessment Year 2016-17, Pr. CIT-2 Jaipur was the competent authority for the purposes of sanction under section 151 of the Act. Copy of approval for passing order under section 148A(d), dated 22/25.7.2022, as per directions of Hon’ble Apex Court would reveal that said order was passed with the approval of the Principal Commissioner of Income tax-2, Jaipur. This fact also finds mention in Order under section 148A(d) of the Act issued on 27.7.2022. Thus, we hold that the notice under section 148 of the Act is invalid in the eye of law. Decided in favour of assessee. 2.8 Hon’ble ITAT, Mumbai Bench in the case of DCIT v. SS Jewellery [2025] 4 TMI 393 vide order dated 24.03.2025 after considering the aforesaid judgment of Hon’ble Supreme Court in Rajeev Bansal (supra) has held: Reassessment proceedings - validity of approval granted u/s 151(i) - HELD THAT:- Admittedly the assessment was reopened after elapsing of three years from the end of the relevant assessment year and therefore the approval of either of specified authorities as specified in sub clause (ii) of section 151 was required to be taken, which admittedly has not been taken but the approval dated 28.07.2022 for issuing the notice u/s 148A of the Act infact had taken from the Ld. Pr. Commissioner of Income Tax, Mumbai, which cannot be termed as valid/legal approval. Thus, on the aforesaid analyzations, the notice issued u/s 148 of the Act and in consequence to the said notice, the assessment order u/s 147 of the Act, is quashed being void- ab-initio. Decided in favour of assessee. 2.9 Hon’ble ITAT, Hyderabad Bench in the case of Raziulla Syed v. ITO [2025] 3 TMI 651 vide order dated 11.03.2025 after considering the aforesaid judgment of Hon’ble Supreme Court in Rajeev Bansal (supra) has held: Reopening of assessment - validity of notice issued u/sec.148 Mandation to get approval must be obtained from the Principal Chief Commissioner or Principal Director General. HELD THAT:- Respectfully following the decision of Union of India vs. Rajeev Bansal [2024 (10) TMI 264 - SUPREME COURT (LB)] and also the decisions of Manish Financial [2024 (12) TMI 1539 - ITAT MUMBAI] and Manish Jagdish Joshi 2024 (9) TMI 347 - ITAT MUMBAI], we are of the considered view that the notice issued by the Assessing Officer u/sec.148 of the Act dated 30.07.2022 by obtaining prior approval from the Principal Commissioner of Income Tax-1, /JPR/2025 Sonu Agarwal, Jaipur. Hyderabad dated 27.07.2022 and consequential final assessment order dated 02.03.2024 passed by the Assessing Officer u/sec.147 r.w.s.144C(13) of the Act is illegal, void ab initio and thus, we quash the final assessment order dated 27.07.2022 passed by the Assessing Officer. Appeal of the Assessee is allowed. 2.10 Hon’ble ITAT, Mumbai Bench in the case of Addl. CIT v. Ramchand ThakurdasJhamtani[2025] 4 TMI 585 vide order dated 28.02.2025 after considering the aforesaid judgment of Hon’ble Supreme Court in Rajeev Bansal (supra) has held: Validity of reopening of assessment - jurisdictional requirements of Sections 147 to 151 - whether approval obtained from the appropriate authority? - whether the Principal Commissioner of Income Tax or the Principal Chief Commissioner of Income Tax was the Specified Authority for seeking approval for passing order u/s 148A(d) of the Act and issuance of notice under Section 148 - HELD THAT:- In the present case the period of 3 years from the end of the Assessment Year 2017-2018 fell for completion on 31st March 2021. The expiry date fell during the time period of 20th March 2020 and 31st March 2021, contemplated under Section 3(1) of TOLA. Resultantly, the authority specified under Section 151(i) of the new regime could have granted sanction till 30th June 2021. On perusal of the order passed u/s 148A(d) of the Act we find that the aforesaid order was passed after taking approval from Principal Commissioner of Income Tax. Since the aforesaid order was passed after the expiry of 3 years from the end of the Assessment Year 2017- 2018, as per the new regime, the authority specified under Section 151(ii) of the Act (i.e. Principal Chief Commissioner or Chief Commissioner) was required to grant approval. We note that even the notice, dated 30/07/2022, was issued under Section 148 of the Act (new regime) after obtaining the prior approval of the Principal Commissioner of Income Tax. Accordingly, we conclude that in the present case the approval has been obtained by authority specified u/s 151(i) of the new regime instead of the authority specified under Section 151(ii) of the new regime. \The non-compliance by the AO with the provisions contained in Section 148A(d) read with Section 151(ii) of the new regime affects the jurisdiction of the AO to issue a notice under Section 148 of the Act. Accordingly, the order, dated 30/07/2022 passed under Section 148A(d) of the Act, the consequential reassessment proceedings and the order, dated 25/05/2023, passed under Section 147 read with Section 144B of the Act are quashed as bad in law being violative of the provisions contained in Section 148A(d), Section 148 and Section 151(ii) of the Act. Decided in favour of assessee. 2.11 Hon’ble ITAT, Raipur Bench in the case of Keshri Rice Industries v. DCIT [ITA: 410/RPR/2024] vide order dated 23.12.2024 after considering the aforesaid judgment of Hon’ble Supreme Court in Rajeev Bansal (supra) has held: 19. We have considered the rival submissions, perused the material available on record and the judicial pronouncements placed before us in support of the contentions. As per facts of the present case, the first notice u/s 148 (under old regime) was issued on the assessee on 30.06.2021. Subsequently, following the directions of Hon'ble Apex Court in the case of Ashish Agrawal (supra), the proceedings of reopening are reinstated under new regime by issuing a notice u/s 148A(b) on 23.05.2022. In /JPR/2025 Sonu Agarwal, Jaipur. furtherance, a notice u/s 148A(d) along with order was issued on 01.07.2022 and notice u/s 148 (under new regime) was issued on 02.07.2022. As the present case pertains to AY 2016-17 and the notice u/s 148 for initiation of reopening assessment proceedings was issued on 02.07.2022, beyond the period of 3 years, which were elapsed on 31.03.2020. Accordingly, as per provisions of section 151(ii) the sanctioning authority under the new regime are Principal Chief Commissioner or Principal Director General or Where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General, whereas in present case, the approval was granted by Ld. PCIT-1, Raipur, vide his approval letter F.No. Pr. CIT- 1/RPR/Tech/2022-23 dated 28.06.2022. The aforesaid facts are on records and are not disputed by the revenue. Since, the issue of sanctioning authority is no more res integra, as has been specifically deliberated upon and guided by the Hon'ble Apex Court in the case of Rajeev Bansal (supra), analyzing the order of Hon'ble Apex Court in the case of Ashish Agrawal (supra), wherein it is categorically held that, as per the provisions of new regime the sanctioning authority shall be decided as prescribed amended section 151(new regime). In the present case because the reopening has been initiated after 3 years therefore, clause(ii) of section 151 shall apply. We, thus, find substance in the contention of the Ld. AR that the approval granted u/s 151(ii) (new regime) was not by the Ld. PCIT, who do not have jurisdiction to do so in a case wherein the process of reopening has been triggered beyond 3 years from the end of the relevant assessment year. The contention of the revenue, placing reliance on the judgment in the case of Ashish Agrawal (supra), that in present case the prescribed authority is Principal CIT-1, Raipur found to be misplaced or misconstrued, as the directions by the Hon'ble Apex Court are clear, which are further clarified that the provisions of amended section 151 shall be applied in the cases in which the revenue has availed the benefit of extended life limit under TOLA and had proceeded for reopening assessment under the provisions of new regime. We, thus, are unable to persuade and concur with the response of the Ld. AO as per their report dated 12.12.2024.
Under such facts and circumstances, we are of the considered view that the impugned assessment order framed u/s 147 r.w.s. 144 r.w.s. 144B of the Act dated 24.03.2023 passed by the Ld. AO is liable to be struck down, being invalid for the want of valid assumption of jurisdiction on account of sanction u/s 151 by an authority, who is not vested with jurisdiction to grant such approval or other than the specified authority under clause (ii) of section 151(new regime). Consequently, the assessment u/s 147 r.w.s. 144 r.w.s. 144B of the Act dated 24.03.2023, stands quashed. 2.12 Hon’ble ITAT, Mumbai Bench in the case of ACIT v. Surya Ferrous Alloys Pvt. Ltd. [2025] 1 TMI 326 vide order dated 24.12.2024 after considering the aforesaid judgment of Hon’ble Supreme Court in Rajeev Bansal (supra) has held: Validity of reassessment proceedings - non-compliance of taking prior approval by the specified authority required u/s. 151 - Scope of “by whom” in procedural compliance for issuance of notice u/s.148 - amended provisions under the Act read with TOLA - notice u/s.148 has been issued beyond three years - HELD THAT:- In the present case, the relevant Assessment Year is 2017-18 and the time limit of three years lapsed on 31.03.2021 which falls between 20.03.2020 and 31.03.2021 during which provisions of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 /JPR/2025 Sonu Agarwal, Jaipur. (TOLA) would apply. Accordingly, the amended provisions under the Act read with TOLA extended the time limit for granting of approval till 30.06.2021 by the specified authority. Thus, in the present case, since the notice u/s. 148 and order u/s. 148A(b) have been issued beyond the period of three years from the end of the relevant Assessment Year, case of the assessee falls within the provisions of section 151(ii) of the amended law whereby the specified authority for grant of approval is specified as Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. Contrary to this requirement, the approval obtained is by Principal Commissioner of Income Tax-17, Mumbai. Accordingly, since a proper sanction by the specified authority had not been obtained for issue of notice u/s.148 under the applicable provisions of law, said notice is invalid and bad in law. Referring to judicial precedent in the case of Ashish Agarwal [2022 (5) TMI 240 - SUPREME COURT] and Rajiv Bansal [2024 (10) TMI 264 - SUPREME COURT (LB)] we hold that sanction by specified authority has not been obtained by the Assessing Officer in accordance with the provisions contained in section 151 of the Act under the new regime, since notice u/s.148 has been issued beyond three years from the end of the relevant Assessment Year. Accordingly, the said notice issued is invalid and thus quashed. Decided in favour of assessee. 2.13 Hon’ble ITAT, Mumbai Bench in the case of Abdul Saeed Issak Mulla v. International Tax [2025] 2 TMI 444 vide order dated 10.02.2025 after considering the aforesaid judgment of Hon’ble Supreme Court in Rajeev Bansal (supra) has held: Reopening of assessment u/s 147 - whether AO has not obtained the approval of the specified authority u/s. 151? - scope of section 151(ii) of the Act, under new regime - HELD THAT:- According to the notice u/s. 148 of the Act for A.Y. 2017-18, which is available on record, was issued on 29.07.2022 after obtaining the prior approval accorded by the of PCIT-27, Mumbai on 27.07.2022 of the said notice vide reference no. pr.CIT-27/148A(d) Approval/2022-23. Three years have elapsed from the end of the relevant assessment year 2017- 18 on 31.03.2021. According to section 151(ii) of the Act, under new regime, the approval should have been obtained either from the Principal Chief Commissioner of Income or Principal Director General or Chief Commissioner or Director General as specified authority which is not so obtained in the case in hand. We accordingly hold that the notice u/s. 148 of the Act is invalid hence the consequent assessment u/s. 147 of the Act is quashed -Assessee’s appeal is allowed. 2.14 Hon’ble ITAT, Raipur Bench in the case of Manoj Rajput v. DCIT [ITA No. 360/RPR/2023] vide order dated 22.10.2024after considering the aforesaid judgment of Hon’ble Supreme Court in Rajeev Bansal (supra) has held: 15. We, thus, in terms of our aforesaid observation concur with the Ld. AR that in the present case before us for A.Y.2017-18, wherein notice u/s.148 of the Act was issued on 30.06.2022, i.e. beyond a period of three years from the end of the assessment year, the A.O. was statutorily obligated to have obtained the approval from either of the authorities specified u/s. 151(ii) of the extant law, viz. Principal Chief Commissioner or Principal Director General or where there is no Principal Chief /JPR/2025 Sonu Agarwal, Jaipur. Commissioner or Principal Director General, Chief Commissioner or Director General. However, as the A.O. had obtained the approval from the Pr. Commissioner of Income Tax, i.e. an authority who was not vested with any jurisdiction as per the mandate of Section 151 of the Act (as made available on the statute w.e.f 01.04.2021), therefore, the assessment so framed by him u/s.147 r.w.s. 144 r.w.s. 144B of the Act, dated 11.05.2023 being devoid and bereft of valid assumption of jurisdiction is liable to be quashed. Accordingly, we quash the assessment framed by the A.O u/s.147 r.w.s. 144 r.w.s. 144B of the Act, dated 11.05.2023 in terms of our aforesaid observations. 2.15 Hon’ble ITAT, Mumbai Bench in the case of Ashok Amratlal Shah v. ITO [ITA 4287/Mum/2024] vide order dated 31.12.2024 after considering the aforesaid judgment of Hon’ble Supreme Court in Rajeev Bansal (supra) has held: 10. As per the provisions of Section 151(ii) under the new procedural regime, for assessment years where the notice under Section 148 is issued after more than three years from the end of the relevant assessment year, the sanction must be obtained from the Principal Chief Commissioner or Principal Director General. The ITAT’s ruling in Manish Financials clarified that while the Hon’ble Supreme Court in Ashish Agarwal (supra) allowed certain procedural relaxations for notices issued during the transition period, post-01/04/2021, the amended provisions under Section 151 must be strictly adhered to. Specifically, for cases where more than three years have elapsed, the required sanction must come from the higher authorities mentioned under Section 151(ii) of the Act.
In Manish Financials, for AY 2016–17, the Bench found that the notice issued under Section 148 was approved by the Principal Commissioner of Income Tax (Pr.CIT) instead of the Principal Chief Commissioner, as mandated. Consequently, the notice and the subsequent assessment order were deemed invalid. Applying the same rationale here, it is evident that for both assessment years under consideration, the sanctioning authority failed to comply with the specific requirements of Section 151(ii) of the Act. Since the notices were issued under the new regime but lacked the necessary approval from the appropriate authority, the sanction process stands invalid. As a result, the notices under Section 148 are deemed to have no legal foundation. In light of this, the assessment orders passed by the Ld. AO under Sections 148/143(3) are quashed. This decision reinforces the principle that procedural compliance, particularly regarding approval from the correct authority, is a fundamental requirement under the Act 2.16 Hon’ble ITAT, Mumbai Bench in the case of ACIT v. Manish Financials [ITA 5055/Mum/2024] vide order dated 02.12.2024 after considering the aforesaid judgment of Hon’ble Supreme Court in Rajeev Bansal (supra) has held: “14. We heard the parties and perused the material on record. In assessee's case for AY 2016-17 pursuant to the directions of the Hon'ble Supreme Court in the case of Ashish Agrawal, the AO passed an order under section 148(d) of the Act and issued a notice under section 148 on 30.07.2022. From the above observations of the Hon'ble Supreme Court it is clear that the though the prior approval under section 148A(b) and 148(d) were waived in terms of the decision of Ashish Agarwal (supra), for issue of notice under section 148A(a) and under section 148 on or after 1 April 2021, /JPR/2025 Sonu Agarwal, Jaipur. the prior approval should be obtained from the appropriate authorities specified under Section 151 of the new regime. The provisions of section 151 of the Act under the new regime read as under: Sanction for issue of notice.
151. Specified authority for the purposes of section 148 and section 148A shall be, —(i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year; (ii) Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year.
In assessee's case from the perusal of para 3 of the notice issued under section 148 for AY 2016-17 we notice that the same is issued with the prior approval of Pr.CIT-19 Mumbai accorded on 29.07.2022 vide reference No.Pr.CIT19/148/2022-23 and this fact is not contravened by the ld DR. For AY 2016-17, the period of three years have elapsed as of 31.03.2020 and the notice is issued beyond three years on 30.07.2022. Therefore as per the decision of the Hon'ble Supreme Court, the approval should have been obtained under the amended provisions of section 151(ii) of the Act i.e. the approval should have been obtained from the Principal Chief Commissioner whereas the approval has been obtained from Pr.CIT as stated in the notice under section 148 itself. Therefore we see merit in the contention of the assessee that the notice under section 148 for AY 2016-17 is issued without obtaining the prior approval from the appropriate authority. Accordingly we hold that the notice under section 148 is invalid and the consequent assessment under section 147 is liable to be quashed.” 2.17 Hon’ble ITAT, Delhi Bench in the case of Genpact India Holdings v. ACIT [2025] 3 TMI 993 vide order dated 19.03.2025 after considering the aforesaid judgment of Hon’ble Supreme Court in Rajeev Bansal (supra) has held: Reassessment proceedings u/s 147 - Valid sanction u/s 151 - “prescribed authority” as to whether it should be the jurisdictional commissioner or Principal Commissioner under section 151(i) or the Principal Chief Commissioner under clause (ii) of the Act, as the case may be - HELD THAT:- Section 151(ii) approval in the instant case involving escaped income of Rs. 50 lakhs or more, had to be obtained under the “new regime” from the “Principal Chief Commissioner” etc. We accordingly adopt the foregoing detailed discussion mutatis mutandis to conclude that the impugned section 148 proceedings herein are not sustainable in law for want of valid section 151(ii) approval in very terms. The impugned reopening/reassessment stands quashed therefore. Appeal of assessee allowed. The impugned notice dated 26.07.2022 issued under section 148 for AY 2016- 2017 was issued without taking the appropriate sanction as mandated u/s. 151(ii) of the Act. Multiple Hon’ble High Courts & Hon’ble ITAT have quashed materially identical notices. On these facts and authorities, the impugned notice is void for want of jurisdiction and must be quashed & set-aside.
/JPR/2025 Sonu Agarwal, Jaipur. GROUND NO. 3 and 4 [Rejecting Long Term Capital Gain earned from sale of shares amounting Rs 81,84,838/- claimed by the assessee appellant as exempt u/s 10(38) of the Act and addition of Rs. 49,552/- on account of commission] Since the initiation of reassessment proceedings initiated vide impugned notice dated 26.07.2022 is itself void-ab-initio and being beyond jurisdiction, entire reassessment proceedings is liable to be set-aside & quashed and hence consequential illegal additions of Rs. 81,84,838/- made by the ld. Assessing Officer is liable to be deleted. Without prejudice, the appellant reserves the right to submit detailed submissions on merits at an appropriate stage if necessary. SUMMARY The impugned notice issued u/s. 148 of the Act dated 26.07.2022 for A.Y. 2016-2017 is bad in law in light of judgment of Hon’ble Supreme Court in the case of Rajeev Bansal (supra) for the reason of Sanction not obtained from PCCIT u/s. 151(ii) of the Act. PRAYER In view of the above facts, statutory provisions, and judicial precedents, it is most respectfully prayed that:
1. 1. The impugned notice dated 26.07.2022 issued under Section 148 for A.Y.2016- 2017 be quashed and set aside.
2. The consequential reassessment order dated 29.05.2023 passed under section 147 r.w.s 144B along with all consequential additions be quashed.
3. Any other relief deemed fit in the interest of justice may please be granted.”
The ld. AR further filed the Paper Book in support of his case as under :-
PAPER BOOK S.No. Particular Page No. From To 1. Written Submission. 01 12 2. Copy of Notice dated 08.04.2021 issued u/s 148 of the Act. 13 13 3. Copy of Order dated 26.07.2022 passed u/s 148A(d) of the Act. 14 19 4. Copy of Notice dated 26.07.2022 issued u/s 148 of the Act. 20 22 5. Ramesh Bachulal Mehta v. ITO 23 29 [2025] 8 TMI 1322. (Hon’bleBombay High Court) 6. H AND M HENNES AND MAURITZ RETAIL Pvt. Ltd. v. ACIT [2025] 5 30 34 TMI 1799 (Hon’ble Delhi High Court) 7. 35 46 Core Logistic Company v. ACIT [W.P. No. 18168/2023] (Hon’ble Madras High Court.) 8. Late Shri Jitendra Nagar v. ITO 47 91 [ITA 1382/JPR/2024] (Hon’ble ITAT Jaipur)
We have head the rival contentions, perused the material on record and gone through the orders of the lower authorities. The assessee has challenged the issue raised in legal ground i.e. notice issued under section 148 of the IT Act, 1961 by the Assessing Officer is without proper approval and satisfaction of higher authority under section 151 of the IT Act, 1961 and entire proceeding is void-ab-initio. The technical ground was raised before the Ld. CIT(A) in ground no. 4, but he has not decided this issue and his find is silent. Therefore, as deal that legal ground based on the arguments advanced. It will be expedient to examine the argument of the ld. A/R that the order under section 148A(d) and notice under section148 were issued without sanction of proper authority. We have gone through the judgment of the Hon’ble Supreme Court in the case of Rajeev Bansal, 469 ITR 46 (SC) wherein the Hon’ble Court opined in para no. 81 as under :-
“81. This Court in Ashish Agarwal (supra) directed the assessing officers to “pass orders in terms of Section 148-A(d) in respect of each of the assesses concerned.” Further, it directed the assessing officers to issue a notice under section 148 of the new regime “after following the procedure as required under Section 148-A.” Although this Court waived off the requirement of obtaining prior approval under Section 148A(a) and Section 148A(b), it did not waive the requirement for Section 148A(d) and Section 148. Therefore, the assessing officer was required to obtain prior approval of the specified authority according to Section 151 of the new regime before passing an order under Section 148A(d) or issuing a notice under Section 148. These notices ought to have been issued following the time limits specified under Section 151 of the new regime read with TOLA, where applicable.”
It is the opinion of the Hon’ble Supreme Court that the Supreme Court did not waive the requirement of section 148A(d) and section 148 and the AO was required to obtain prior approval of the specified authority according to section 151 of the new regime. Section 151 of the New regime is as under :-
[Sanction for issue of notice.
Specified authority for the purposes of section 148 and section 148A shall be,— (i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year; (ii) Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year.] Therefore, under new regime the order u/s 148A(d) and notice u/s 148 after expiry of three years was required to be issued with the sanction obtained from PCCI/ PDGIT/ CCIT/ DGIT as against which the same has been issued with the sanction of PCIT and the same is not in accordance with the provisions of section 151 of the new regime. Further, we have also gone through the judgement of the Hon`ble Delhi High Court in the case of Kusum Healthcare P Ltd. v/s DCIT (W.P. (C) No. 383/2023 vide order dated 05.03.2025) wherein the issue was “38. It would therefore be wholly incorrect to read the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act as intending to amend the distribution of power or the categorization envisaged and prescribed by section 151. The additional time that the said statute provided to an authority cannot possibly be construed as altering or modifying the hierarchy or the structure set up by section 151 of the Act. The issue of approval would still be liable to be answered based on whether the reassessment was commenced after or within a period of four years from the end of the relevant assessment year or as per the amended regime dependent upon whether action was being proposed within three years of the end of the relevant assessment year or thereafter. The bifurcation of those powers would continue unaltered and unaffected by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act.
What we seek to emphasize is that the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act authorization merely enables the competent authority to take action within the extended time period and irrespective of the closure which would have ordinarily come about by virtue of the provisions contained in the Act. It does not alter or amend the structure for approval and sanction which stands erected by virtue of section 151. The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act merely extended the period within which action could have been initiated and which would have otherwise and ordinarily been governed and regulated by sections 148 and 149 of the Act. If the contention of the respondents were to be accepted it would amount to us virtually ignoring the date when reassessment is proposed to be initiated and the same being indelibly tied to the end of the relevant assessment year. Once it is conceded that the notice came to be issued four or three years after the end of the relevant assessment year, the approval granted by the Joint Commissioner of Income-tax would not be compliant with the scheme of section 151. We thus find ourselves unable to sustain the grant of approval by the Joint Commissioner of Income-tax.”
The Hon’ble Delhi High Court has also very categorically mentioned that approval for issuance of notice u/s 148 was required to be taken as per /JPR/2025 Sonu Agarwal, Jaipur. time gap between the Assessment Year and time when this notice was to be issued and TOLA did not amend the hierarchy set up under section 151. Hence in this judgement also the Hon’ble Delhi High Court opined that sanction for notice u/s 148 was required to be taken from authority specified under amended section 151 as per time gap existing between the assessment year and time of issue of notice.
Further, very recently in a judgment decided by Co-ordinate Bench of the Tribunal, Jaipur in dated 06.08.2025 in the case of RSD Containers Private Limited v/s ITO, Ward 7(1), Jaipur the issue of sanction in cases wherein as per order of the Hon’ble Supreme Court in the case of Ashish Agarwal notice u/s 148 were again issued the following was held :-
Even if the argument of the revenue is accepted that the since the time limit for issuance of notice was not expired in this case being A. Y. 2017-18 the notice issued u/s. 148 dated 28.07.2022 [ as is issued after 3 years ] required sanction of the PCCIT but the same is issued with the sanction of PCIT-2,Jaipur and thus, notice issued u/s.148 after lapse of 3 years is bad in law, since the same has been issued without obtaining the approval from Specified authority viz. Pr. CCIT prescribed u/s.151(ii), thereby violating the law settled by Hon'ble Apex Court in the case of UOL vs. Rajeev Bansal (167 taxmann.com 70). Thus, the bench noted that on the identical facts the co ordinate bench of ITAT Mumbai in has decided the issue raised by the assessee as to acquiring the jurisdiction to issue notice u/s. 148 without proper approval and thereby having similar fact the assessment was quashed and in that the co-ordinate Mumbai bench has given the following finding : “8. We find that in a recent decision by the Hon'ble Supreme Court in the case of Union of India and other Vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC), dated 03.10.2024, Hon'ble Court after the fall out of its own decision in the case of Ashish Agarwal (supra) had dealt with the issue in respect of sanction of the specified authority and concluded that TOLA will extend the /JPR/2025 Sonu Agarwal, Jaipur. time limit for the grant of sanction by the authority specified u/s.151. According to the Hon'ble Court, the test to determine whether TOLA will apply to section 151 of the new regime is that if the time limit of three years from the end of the Assessment Year falls between 20.03.2020 and 31.03.2021 then, the specified authority u/s.151(i) has extended time till 30.06.2021 to grant the approval. According to the Hon'ble Court, Assessing Officers were required to issue the re-assessment notice u/s.148 of the new regime within the time limit surviving under the Act read with TOLA. All notices issued beyond the surviving period are time barred and liable to be set aside. Hon'ble Court had elaborately dealt with this issue in Part E of its decision in para 73 to 78 which are extracted below: 73. Section 151 imposes a check upon the power of the Revenue to reopen assessments. The provision imposes a responsibility on the Revenue to ensure that it obtains the sanction of the specified authority before issuing a notice under Section 148. The purpose behind this procedural check is to save the assessees from harassment resulting from the mechanical reopening of assessments. 128 A table representing the prescription under the old and new regime is set out below:
The above table indicates that the specified authority is directly co-related to the time when the notice is issued. This plays out as follows under the old regime: 37 RSD Containers Pvt Ltd. vs ITO (i) If income escaping assessment was less than Rupees one lakh: (a) a reassessment notice could be issued under Section 148 within four years after obtaining the approval of the Joint Commissioner, and (b) no notice could be issued after the expiry of four years; and (ii) If income escaping was more than Rupees one lakh: (a) a reassessment notice could be issued within four years after obtaining the approval of the Joint Commissioner; and (b) after four years but within six years after obtaining the approval of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner.
/JPR/2025 Sonu Agarwal, Jaipur.
After 1 April 2021, the new regime has specified different authorities for granting sanctions under Section 151. The new regime is beneficial to the assessee because it specifies a higher level of authority for the grant of sanctions in comparison to the old regime. Therefore, in terms of Ashish Agarwal (supra), after 1 April 2021, the prior approval must be obtained from the appropriate authorities specified under Section 151 of the new regime. The effect of Section 151 of the new regime is thus: (i) If income escaping assessment is less than Rupees fifty lakha: (a) reassessment notice could be issued within three years after obtaining the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director; and (b) no notice could be issued after the expiry of three years; and (ii) If income escaping assessment is more than Rupees fifty lakhs: (a) a reassessment notice could be issued within three years after obtaining the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director, and (h) after three years after obtaining the prior approval of the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General.
Grant of sanction by the appropriate authority is a precondition for the assessing officer to assume jurisdiction under Section 148 to issue a reassessment notice. Section 151 of the new regime does not prescribe a time limit within which a specified authority has to grant sanction. Rather, it links up the time limits with the jurisdiction of the authority to grant sanction. 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. Thus, non-compliance by the assessing officer with the strict time limita prescribed under Section 151 affects their jurisdiction to issue a notice under Section 148.
Parliament enacted TOLA to ensure that the interests of the Revenue are not defeated because the assessing officer could not comply with the preconditions due to the difficulties that arose during the COVID-19 pandemic Section 3(1) of TOLA relaxes the time limit for compliance with actions that fall for completion from 20 March 2020 to 31 March 2021. TOLA willaccordingly 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 March 2020 and 31 March 2021, then the specified authority under. Section 151(1) has an extended time till 30 June 2021 to grant approval 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 March 2020 and 31 March 2021, then the specified authority under Section 151(2) has time till 31 March 2021 to grant approval. The time limit for Section 151 of the old regime expires on 31 March 2021 because the new regime comes into effect on 1 April 2021.
For example, the three years time limit for assessment year 2017-2018 falls for completion on 31 March 2021. It falls during the time period of 20 March 2020 and 31 March 2021, contemplated under Section 3(1) of TOLA /JPR/2025 Sonu Agarwal, Jaipur. Resultantly, the authority specified under Section 151(i) of the new regime can grant sanction till 30 June 2021......
This quote in Ashish Agrawal (supra) directed the Assessing Officers to "pass orders in terms of Section 148-A(d) in respect of each of the assessee concerned. Further, it directed the Assessing Officers to issue a notice u/s. 148 of the new regime "after following the procedure as required u/s. 148-A Although this quote waived off the requirement of obtaining prior approval u/s.1484(a) and section 148A(b), it did not waive the requirement for section 148A) and section 148. Therefore, the Assessing Officer was required to obtain prior approval of the specified authority according to section 151 of the new regime before passing an order us. 148Aldi or Issuing a notice u/s 148 These notices ought to have been issued following the time limits specified u/s.151 of the new regime r.w. TOLA, where applicable..... 114 ....... TOLA will extend the time limit for the grant of sanction by the authority specified u/s 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 March 2020 and 31 March 2021, then the specified authority u/s 151() has extended time till 30 June 2021 to grant approval;....” 8.1. From the above, we note that in para 73, in the table last two rows relate to provisions of Section 151(i) (ii) of the new regime prescribing the time limit as well as the specified authority. In para 75, it is very categorically mentioned by the Hon'ble Court that after 01.04.2021, in terms of Ashish Agrawal (supra) the prior approval must be obtained from the appropriate authorities specified u/s.151 of the new regime. This abundantly brings clarity on the aspect of obtaining approval for issue of notice u/s. 148 which are fall out of the decision in Ashish Agrawal (supra). In para 77, objective of section 3(1) of TOLA is mentioned which is to relax the time limit for compliance with actions that fall for completion from 20.03.2020 to 31.03.2021. Thus, the objective is specific for providing temporal flexibility. In para 78, the same has been explained by an example taking Assessment Year 2017-18 which also in specific terms mentions that the authority specified u/s.151 (i) of the new regime can grant sanction till 30.06.2021. Thus, while concluding in para 81 on the issue obtaining approval, Hon'ble Court has specifically stated that the Assessing Officer is required to obtain prior approval of the specified authority according to section 151 of the new regime before passing an order u/s.148A(d) or issuing a notice u/s.148. According to the Hon'ble Court, though it had waived off the requirement obtaining prior approval u/s.148A(a) and Section 148Ab, it did not waive the requirement for section 148A(d) and Section 148. 8.2. Taking into consideration the submissions made by the Id. Sr. DR and keeping the same in juxtaposition with the above observations and findings of the Hon'ble Court, we note that the issue we are presently addressing raised before us is not on the aspect of "when" for the procedural compliance for issuance of notice u/s.148 but on the aspect of "by whom" it ought to have been issued. Ld. Sr. DR has contended that there is hierarchical escalation vis-à-vis /JPR/2025 Sonu Agarwal, Jaipur. obtaining approval for issuing notice u/s.
148. In this respect, Hon'ble Court has very categorically held in para 75 that the prior approval must be obtained from the appropriate authorities specified u/s.151 of the new regime for the notices issued in terms of Ashish Agrawal (supra) after 01.04.2021. Reference by ld. Sr. DR to Section 149(1)(a) deals with time limit for issuing notice u/s.
Contention of the Id. Sr. DR that there is no hierarchical escalation for obtaining prior approval for issuing notice u/s.148 is not in coherence with the guidelines mandated by the Hon'ble Apex Court as enunciated above. Repeatedly, Hon'ble Court has stated including by way of illustration that TOLA extends time line from the old regime which survives making the notice validly issued subject to the approval requirements of Section 151 under the new regime. Accordingly, the prior approval requirement is mandated under the section 151 of new regime. 8.3. In the present case, the relevant Assessment Year is 2017-18 and the time limit of three years lapsed on 31.03.2021 which falls between 20.03.2020 and 31.03.2021 during which provisions of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) would apply. Accordingly, the amended provisions under the Act read with TOLA extended the time limit for granting of approval till 30.06.2021 by the specified authority. Thus, on the above stated facts and law, in the present case, three years had lapsed from the end of the Assessment Year when the order u/s.148A(d) and notice u/s.148 was issued on 30.07.2022. In the present case, since the notice u/s. 148 and order u/s. 148A(b) have been issued beyond the period of three years from the end of the relevant Assessment Year, case of the assessee falls within the provisions of section 151 (ii) of the amended law whereby the specified authority for grant of approval is specified as Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. Contrary to this requirement, the approval obtained is by Principal Commissioner of Income Tax-17, Mumbai. Accordingly, since a proper sanction by the specified authority had not beenobtained for issue of notice u/s. 148 under the applicable provisions of law, said notice is invalid and bad in law. 8.4. Keeping in juxtaposition the undisputed and the uncontroverted facts as stated above and the judicial precedent of the Hon'ble Supreme Court in the case of Ashish Agarwal and Rajiv Bansal (supra), we hold that sanction by specified authority has not been obtained by the ld. Assessing Officer in accordance with the provisions contained in section 151 of the Act under the new regime, since notice u/s.148 has been issued beyond three years from the end of the relevant Assessment Year. Accordingly, the said notice issued is invalid and thus quashed. Resultantly, the impugned re-opening proceedings so initiated and the impugned re-assessment order passed thereafter are also quashed.”
We further find that the issue under consideration is also covered by the decision of the Coordinate Bench of the Tribunal, Jaipur in the case of /JPR/2025 Sonu Agarwal, Jaipur. Late Shri Jitendra Nagar vs. ITO in dated 01.10.2025 wherein after considering the judgment of Hon’ble Supreme Court in case of Union of India vs. Rajeev Bansal (2024) 469 ITR 46 (SC), and subsequent order of Bombay, Delhi and Madars High Court, the Coordinate Bench quashed the notice issued under section 148 of the IT Act, 1961, as bad in law and the consequential assessment order, by observing at page 44 of its order, as under :-
In the case in hand also notice under section 148 dated 25.07.2022 was issued beyond three years from the end of the assessment year, hence it required the approval of Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General of Income-tax as per section 151(ii) of the Income Tax Act, 1961, but the AO has failed to obtain proper approval from the specified authority before issuing notice under section 148 of the Act, 1961. Since the facts of the present case of the assessee is similar to the case that has been decided by the Coordinate Bench of the Tribunal, Jaipur in the case of RSD Containers Pvt. Ltd. in dated 06.08.2025, by quashing the notice under section 148, we are of the considered view that the assessee deserves to succeed. Thus, on being consistent with the above order which has been passed considering the decision of the Apex Court in the case of Rajeev Bansal (supra) and Ashish Agarweal (supra), we quash the notice issued under section 148 of the IT Act, 1961, as bad in law and accordingly the consequential assessment order is hereby quashed.
Taking into consideration the above facts and circumstances of the case, and following the judgments of the Hon’ble Supreme Court in the case of Rajeev Bansal (supra) and Ashish Agarwal (supra), and the judgments of the Hon’ble High Courts and the Tribunal, discussed herein above, we quash the notice issued under section 148 of the IT Act, 1961, as bad in
As we have quashed the assessment order, hence there is no requirement for going into other grounds of appeal.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open Court on 19/11/2025.