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Facts
The assessee's appeal is against an order dated 25.03.2025 from the National Faceless Appeal Centre (NFAC). The core issue is the validity of the reassessment order, specifically challenging the notice issued under section 148A(b) of the Income Tax Act.
Held
The Tribunal held that the approval for issuing the notice u/s 148A(b) was sought from the Principal Commissioner of Income Tax, whereas as per Section 151 of the Act, approval should have been obtained from the Principal Chief Commissioner or Principal Director General. This procedural lapse vitiates the approval.
Key Issues
Whether the reassessment proceedings initiated by the assessee are vitiated due to improper approval as per Section 151 of the Income Tax Act.
Sections Cited
147, 144B, 148A(b), 151
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Income Tax Appellate Tribunal, “B” BENCH, DELHI
Before: SHRI ANUBHAV SHARMA & SHRI MANISH AGARWAL
O R D E R PER ANUBHAV SHARMA, JM:
This appeal is preferred by the assessee against the order dated 25.03.2025 of the Ld. National Faceless Appeal Centre (NFAC) Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’)
P a g e | M/s Galax Minerals (P) Ltd. (AY: 2017-18) in DIN & Order No : ITBA/NFAC/S/250/2024-25/1075010446(1)arising out of the order dated 19.05.2023 u/s 147 r.w.s 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the Assessment Unit, Income Tax Department for AY: 2017-18.
At the time of hearing ld. Counsel has pointed out that assessee has raised grounds on merits as well as law and primarily at this stage assessee is pressing ground No. 2.7 by which assessee has challenged the reassessment order on the basis that the notice u/s 148A(b) of the Act issued on 21.03.2024 u/s 148 of the Act is not issued after due compliance and as per Section 151 of the Act and for that ld. Counsel has drawn our attention to the copy of approval dated 23.07.2022 available at page No. 58 of the paper book and it shows that as for AY: 2017-18 the approval was sought from Principle Commissioner of Income Tax-04, Delhi on 07.07.2022 while the law stands settled that as approval sought to have been taken of Principle Chief Commissioner of Income Tax and that vitiates the approval. Reliance is placed of the decision of Hon’ble Supreme Court in the case of Union of India Vs. Rajiv Bansal (2024) 10 TMI 264 which has been relied by this P a g e | M/s Galax Minerals (P) Ltd. (AY: 2017-18)
& 1900/Del/2025 order dated 29.07.2025 in para 3 & 4 which is reproduced below: for AY 2017-18, the ld. AR has submitted that there was no valid approval for the purpose of section 151 of the Act and appreciating the contention of the ld. AR, we find that in the present case, order u/s 148A(d) has been passed and, thereafter, notice u/s 148 has been issued. The order u/s 148A(d) has been passed and notice issued on 27.07.2022, i.e., after three years from the end of AY 2017-18. The Hon’ble Supreme Court in Union of India vs. Rajeev Bansal, 2024 (10) TMI 264, order dated 03.10.2024, has held in para 81 as follows:-
“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.”
Thus, prior approval of Principal Chief Commissioner or Principal Director General and where these two authorities are not there, then, the Chief Commissioner or Director General are competent authorities to grant the approval.
P a g e | M/s Galax Minerals (P) Ltd. (AY: 2017-18) However, in the case in hand, such approval of these competent authorities have not been taken and the copy of notice on record shows that the approval has been accorded by the Principal Commissioner of Income-tax-1, New Delhi on 27.07.2022 which seems to have been as per the old regime. Thus, we are inclined to sustain the ground no.4 in impugned order for in AY 2017-18. The appeal of the assessee in is allowed. The impugned assessment is quashed.”
In the light of the aforesaid the ground as raised is sustained and the appeal of the assessee is allowed. The impugned order is quashed.
Order pronounced in the open court on 30.01.2026