DCIT CIRCLE-28(1) , CIVIC CENTRE NEW DELHI vs. ASHWANI KHURANA, NEW DELHI
Facts
The appeal and cross-objection were filed by the Revenue and the Assessee against the order of the National Faceless Appeal Centre (NFAC). The NFAC quashed the reassessment proceedings under Section 147 of the Income Tax Act, 1961, citing issues with prior approval.
Held
The Tribunal held that the Assessing Officer was ignorant of the settled law regarding the competent authority for granting approval under Section 151 of the Act. The reopening notice was issued after three years from the end of the assessment year, requiring approval from the Principal Chief Commissioner of Income Tax, which was not obtained correctly.
Key Issues
Whether the reassessment proceedings were validly initiated and whether the approval for reopening was obtained from the competent authority as per law.
Sections Cited
147, 144B, 151, 151A, 148, 148A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, DELHI
Before: SHRI ANUBHAV SHARMA & SHRI MANISH AGARWAL
PER ANUBHAV SHARMA, JM:
This appeal and Cross Objection preferred by the Revenue and the
Assessee against the order dated 24.07.2024 of the Ld. National Faceless
Appeal Centre (NFAC) (hereinafter referred to as the First Appellate
Authority or ‘the ld. FAA’ for short) in DIN & Order No :
ITBA/NFAC/S/250/2024-25/1066956257(1)arising out of the assessment
order dated 21.05.2023 u/s 147 r.w.s 144B of the Income Tax Act, 1961
(hereinafter referred to as ‘the Act’) passed by the Assessment Unitfor AY:
2016-17.
On hearing both side we find that revenue has raised following
grounds:
“1. That on facts and circumstances of the case and in law, the CIT(A) has erred in quashing/invalidating the reassessment proceedings u/s 147 of the Act by ignoring that the Instruction No. 1/2022 dated 11/05/2022 was Issued by the CBDT in compliance of the judgement of Hon'ble Supreme Court dated 04/05/2022 in the case of Union of India Vs. Ashish Agarwal, for implementation of said judgment in uniform manner after considering the time extension provided by Taxation and Other Laws (Relaxation and amendment of certain provisions) Act, 2020 and the case of the assessee falls under the ambit of para 6.2(ii) this Instruction No.l and therefore prior approval in this case for order u/s 148A(d) of the Act & Notice u/s 148 of the Act for A.Y. 2016-17 (both dated 30/07/2022) has rightly been taken
P a g e | 3 ITA No.4534/De/2024 CO. 12/Del/2025 AshwaniKhurana (AY: 2016-17) from the specified authority as per clause (i) of Section 151 of the Act i.e. Pr. Commissioner of Income Tax, Delhi-10, New Delhi."?
That on facts and circumstances of the case and in law, the Ld. CIT(A) has failed to appreciate that the notices issued u/s 148 by the JAO are as per automated allocation and risk management strategies and therefore, in alignment with the provisions of Section 151A r.w.s. 144B of the Income-tax Act, 1961 and both JAO as well as units under NFAC have concurrent jurisdiction under the Income- tax Act 1961, which has also recently been held by Hon'ble Kolkata High Court in its order in WP No WPO/1566/2023 dt 13.09.2023.
Whether on facts and in circumstances of the case, the Ld. CIT(A) was justified in deleting the addition of Rs. 11,80,35,366/- without considering the facts that assessee has made property transaction of Rs. 11,80,35,366/- and without offering taxation of the same amount under the head Capital Gain?
Whether on facts and in circumstances of the case, the Ld. CIT(A) was justified in deleting the addition of Rs. 10,34,320/- without going through detailed finding of the AO assessment order with respect to penny stock.
The appellant reserves right to add, alter or amend the grounds of appeal on or, before the date of disposal of appeal.”
Ld. DR sought indulgence of the Bench on the basis that the question
of assessment being concluded by JAO and FAO is under consideration for
retrospective application by way of amendments brought recently in the Act,
therefore, adjournment be granted. However, what we find interesting is that
Assessing Officer has raised ground No 1 whereby the approval taken u/s 151
P a g e | 4 ITA No.4534/De/2024 CO. 12/Del/2025 AshwaniKhurana (AY: 2016-17) of the Act from PCIT, Delhi-10, New Delhi is claimed to be valid. Thus no
basis for adjourning was made out and request of ld. DR was not sustained.
It is apparent that Ld. AO seems to be completely ignorant of the
settled position of law as to under given facts of the case, which tax authority
is competent, to grant mandatory approval u/s 151 of the Act. The present
assessment for AY 2016-17 has been reopened vide notice dated 30/07/2022
i.e after the lapse of three years from the end of the relevant assessment year.
The specified authority would thus be Principal Chief Commissioner of
Income Tax. In this regard, reliance as placed by the Ld. AR on the decision
of Coordinate bench in the case of Sampark Management Consultancy LLP
Vs. DCIT in ITA Nos. 6025 & 6026/Del/2024 dated 25.06.205, has to be
sustained and the relevant part of this decision is reproduced below:
“This approval is contrary to the provisions of section 151 of the Act as amended/substituted by the Finance Act, 2021 because, as per section 151 of the Act, if more than three years have lapsed from the end of the relevant assessment year, approval of Principal Chief Commissioner of Income-tax or Principal Director General or Chief Commissioner or Director General was required to be obtained. In the present assessment years, notices u/s 148 have been issued on 28.07.2022 after expiry of three years from the end of relevant assessment years. Accordingly, sanction/approval of Principal Chief Commissioner of Income-tax or
P a g e | 5 ITA No.4534/De/2024 CO. 12/Del/2025 AshwaniKhurana (AY: 2016-17) Principal Director General or Chief Commissioner or Director General was required to be obtained. Reliance in this regard is placed on the decision of the Hon’ble Supreme Court in Union of India vs. Rajeev Bansal, 2024 (10) TMI 264 – SUPREME COURT) and various decisions. Thus, the approval is not sustainable under law.”
Thus, the groundsas raised have no substance.The appeal of revenue is
dismissed and the Cross Objection become infructuous and accordingly
dismissed.
Order pronounced in the open court on 11.02.2026
Sd/- Sd/- (Manish Agarwal) (Anubhav Sharma) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 11.02.2026 Rohit, Sr. PS
