SHREE SAI HOSPITALITY,MUMBAI vs. INCOME TAX OFFICER, WARD 2(1), MUMBAI, THANE

Aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A), NFAC, who vide order passed under section 250 dated 14.10.2025 confirmed the additions made by the Assessing Officer, noting that the assessee had not filed any submissions despite several opportunities during the appellate proceedings.

Against the aforesaid order of the learned CIT(A), the assessee is in appeal before us raising following grounds:

On the facts and in the circumstances of the case, and in law, the Ld. CIT(A) erred in in confirming the addition of Rs.85,00,000/- made by the Ld. AO. u/s. 69 of the Act. The appellant, therefore, prays that the aforesaid addition of Rs.85,00,000/- be deleted.

On the facts and in the circumstances of the case, and in law, the Ld. CIT(A) erred in in confirming the addition of Rs.85,00,000/- made by the Ld. AO. as alleged short term capital gains of the Act. The appellant, therefore, prays that the aforesaid addition of Rs.85,00,000/- be deleted. The appellant craves leave to alter, modify, amend or delete any of the above grounds of appeal

According to the learned Authorised Representative, since the sanction in the present case has admittedly been granted by the PCIT instead of the PCCIT, the condition prescribed under section 151 of the Act has not been complied with. Consequently, the very assumption of jurisdiction under section 147 of the Act is vitiated and the reassessment order passed pursuant to such invalid approval is liable to be quashed.

In support of the above contention, the learned Authorised Representative placed reliance on the decision of the coordinate bench in the case ofState Bank of India in (order dated 04.11.2025).The learned Authorised Representative submitted that in the said decision the Tribunal, after examining an identical issue, followed the judgment of theHon’ble jurisdictional Bombay High Courtin the case of Vodafone Idea Ltd. vs. DCIT (WP No. 2768 of 2022 dated 06.02.2024).

We have carefully considered the rival submissions and perused the material available on record. The primary legal issue raised by the assessee relates to the validity of the reassessment proceedings initiated under section 147 of the Act, on the ground that the mandatory approval required under section 151 of the Act was not obtained from the specified authority.

Section 151 of the Act prescribes the authority whose prior approval is required before issuing notice under section 148 or passing an order under section 148A(d). The relevant provision reads as under:

Thus, the statutory scheme clearly provides that where the notice is issued after three years, the approval must necessarily be

In the present case, the notice under section 148 was issued on 02.04.2022 for Assessment Year 2018-19. The end of the relevant assessment year is 31.03.2019. Therefore, the notice issued on 02.04.2022 is clearly beyond three years from the end of the relevant assessment year.The learned Authorised Representative has pointed out that the approval for issuing the notice under section 148 was granted by the Principal Commissioner of Income Tax, Thane-1.

In view of the statutory mandate contained in section 151(ii), where more than three years have elapsed from the end of the relevant assessment year, the sanctioning authority must be the Principal Chief Commissioner of Income Tax or equivalent authority, and not the Principal Commissioner of Income Tax. Thus, the approval granted by the PCIT in the present case does not satisfy the requirement prescribed under section 151(ii) of the Act.

An identical issue has been considered by the Hon’ble Bombay High Court in the case of Vodafone Idea Ltd. vs DCIT (supra).The Hon’ble High Court held as under:

Thus, the Hon’ble jurisdictional High Court has clearly held that where the notice under section 148 is issued beyond three years, the approval must be obtained from PCCIT and sanction granted by PCIT would render the notice invalid.

The coordinate bench in State Bank of India vs ACIT, dated 04.11.2025, following the judgment of the Hon’ble Bombay High Court, held that where the notice under section 148 of the Act is issued after the expiry of three years from the end of the relevant assessment year with the approval of the Principal Commissioner of Income Tax instead of the Principal Chief Commissioner of Income Tax as mandated under section 151(ii) of the Act, such notice cannot be sustained in law, and consequently the reassessment order passed pursuant to such invalid notice is liable to be quashed.

The learned DR submitted that this ground was not raised before the learned CIT(A). However, the issue raised by the assessee pertains to the jurisdiction of the Assessing Officer to reopen the assessment. It is well settled that a pure question of law which goes to the root of jurisdiction can be raised at any stage of the proceedings. Therefore, the legal ground raised by the assessee deserves to be admitted.

Applying the above legal position to the facts of the present case, we find that the notice under section 148 was issued on 02.04.2022 for A.Y. 2018-19, the notice was issued beyond three

Therefore, the sanction granted in the present case is not in accordance with law. Consequently, the notice issued under section 148 and the reassessment proceedings initiated pursuant thereto are invalid in law.

Accordingly, the reassessment order passed under section 147 r.w.s. 144 r.w.s. 144B dated 16.03.2024 is quashed.

Since the reassessment proceedings themselves are held to be invalid, the other grounds raised by the assessee on merits become academic and do not require adjudication.

In the result, the appeal of the assessee is allowed.