ESSEN CONSULTING ,MUMBAI vs. DCIT CIRCLE 23(1), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E”, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No.7510/Mum/2025 (Assessment year: 2015-16) ITA No.7511/Mum/2025 (Assessment year: 2016-17)

ESSEN Consulting vs Deputy Commissioner of Income- 11-A Silk House, J.S. Sheth Tax Circle 23(1) Road. Near Metro, Mumbai- Piramal Chamber, 400002 PAN:AAEFE4504B APPELLANT RESPONDENT Assessee by : Shri Nitesh Joshi, Respondent by : Shri Ritesh Misra (CIT DR) Date of hearing : 28/01/2026 Date of pronouncement : 03/02/2026 O R D E R Per Bench: The instant appeal of the assessee filed against two separate orders of the NFAC, Delhi [for brevity ‘the ld. CIT(A)], order passed under section 250 of the Income Tax Act 1961 (for brevity ‘the Act’) for assessment year 2015-16 and 2016- 17, date of order 25.09.2025. The impugned orders emanated from the order of the Assessment Unit Income-tax Department (for brevity the “Ld. AO”) order

2 ITA No.7510 & 7511/Mum/2025 ESSEN Consulting passed under section 147 r.w.s. 144B of the Act date of both the orders 29.05.2023.

ITA No.7510/Mum/2025 A.Y. 2015-16 2. The Ld. AR initiated the argument by challenging the jurisdiction of the Ld. AO of issuance of notice u/sec. 148 related to assessment year 2015-16. The assessee filed a paper book containing pages 1 to 132 which has been placed on record. The Ld. AR contended that the date of issuance of notice U/s 148 is on 26.07.2022. The copy of notice is placed in APB page 47 to 48. Respectfully considering the order of the Hon'ble Supreme Court in Union of India v. Rajiv Bansal reported in 167 taxmann.com 70 (SC) in para no.19(b) of the said order the issuance of notice under section 148 of the Act for AY 2015-16 on or after 01/04/2021 is invalid. The revenue has made concession before the Hon’ble Apex Court that for AY 2015-16 they would drop all notices issued u/sec 148 after 01/04/2021. So, the notice u/sec 148 initiated by the Ld. AO stands dismissed.

3 ITA No.7510 & 7511/Mum/2025 ESSEN Consulting 1(1), Kalyan W.P. No.1428 OF 2023, date of order 06/10/2025 and in Cherian Nallathu Abraham Annamma vs ITO WP(L) no. 32774 of 2025 date of order 13/10/2025. The legal position that emerges from these authorities is unambiguous & all reassessment notices issued for A.Y. 2015-16 on or after 01/04/2021 are barred by limitation and must be dropped, as they do not fall within the extended period permissible under TOLA. The Hon’ble Bombay High Court has repeatedly applied this principle and quashed reassessment notices in identical fact situations. In the present case, the impugned notice under section 148 was issued on 26/07/2022, well beyond the legally permissible period. Consequently, the reassessment proceedings lack jurisdiction from their inception. The Ld. DR, despite relying on the orders of the revenue authorities, was unable to produce any contrary decision to rebut the judicial precedents cited by the Ld. AR. In view of the above, the legal ground pertaining to the validity of the reassessment notice goes to the root of jurisdiction and is sufficient to vitiate the entire proceedings. Once the notice itself is void ab initio, the consequent reassessment order cannot survive. Accordingly, the additions made by the Ld. AO become purely academic and need not be adjudicated on merits. We therefore hold that the reassessment proceeding initiated under section 148 is invalid, and the reassessment order passed pursuant thereto is liable to be quashed. As the issue is decided on the jurisdictional legal ground, the grounds on merits are rendered academic and are kept open. So, the appeal of the assessee stands allowed.

4 ITA No.7510 & 7511/Mum/2025 ESSEN Consulting ITA No.7511/Mum/2025, A.Y. 2016-17 5. The Ld. AR argued and filed paper book containing pages 1 to 126 which has been placed on record. The Ld. AR contended that the Ld. AO had wrongly assumed jurisdiction while issuing the notice under section 148 read with section 151 of the Act dated 30/06/2021. The notice U/s 148 is enclosed in APB page-14. Further, it was submitted that the sanctioning authority granting prior approval for issuance of the said notice was the Ld. Principal Commissioner of Income-tax- 19, Mumbai (hereinafter referred to as “Pr. CIT-19”). The Ld. AR challenged the validity of such approval on the ground that the Ld. Pr. CIT-19 was not the competent sanctioning authority for the issuance of notice under section 148A of the Act. It was contended that the approval accorded by Pr. CIT-19 vitiated the entire reassessment proceedings, rendering the notice issued under section 148 of the Act bad in law. In this regard, the Ld. AR invited our attention to the order passed under section 148A(d) of the Act dated 29.07.2022, wherein the relevant noting recorded by the Ld. AO reads as under: “10. This order is issued with the prior approval of the Pr. CIT-19, Mumbai in accordance with the provisions of section 151 of the Income-tax Act, 1961.” 6. The Ld. AR further contended that the aforesaid issue has already been examined and adjudicated by the Coordinate Bench of the ITAT, Mumbai ‘A’ Bench, in the case of Ashok Amritlal Shah vs. ITO in ITA Nos. 4286 to 4288/Mum/2024, vide order dated 31.12.2024. The relevant observations of the Coordinate Bench are reproduced below:

5 ITA No.7510 & 7511/Mum/2025 ESSEN Consulting “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. 11. 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. 12. Accordingly, the ground no-2 of the appeal for AYs. 2016-17 & 207-18 are allowed. As the legal ground of the assessee is survived, the other grounds are only for academic purposes and do not require further deliberation.”

6 ITA No.7510 & 7511/Mum/2025 ESSEN Consulting 7. The Ld. DR argued and stands in favour of the orders of the revenue authorities. 8. We have carefully considered the rival submissions and perused the material available on record. It is an undisputed fact that the notice under section 148 of the Act dated 30/06/2021 was issued with the prior approval of the Ld. Pr. CIT-19, Mumbai, as is evident from the order passed under section 148A(d) of the Act dated 29.07.2022. However, as per the amended provisions of section 151(ii) of the Act, where the notice under section 148 is issued after the expiry of three years from the end of the relevant assessment year, the mandatory sanction is required to be obtained from the Principal Chief Commissioner or the Principal Director General, and not from the Principal Commissioner of Income-tax. The Coordinate Bench of the ITAT, Mumbai, in Ashok Amritlal Shah (supra), after considering the statutory scheme under the new reassessment regime and the binding judicial precedents, has categorically held that sanction granted by an authority not competent under section 151(ii) vitiates the entire reassessment proceedings and renders the notice issued under section 148 invalid in law. Respectfully following the ratio laid down by the Coordinate Bench and applying the same to the facts of the present case, we hold that the approval granted by the Ld. Pr. CIT-19, Mumbai, being not in accordance with section 151(ii) of the Act, is invalid. Consequently, the notice issued under section 148 and the subsequent reassessment proceedings lack legal foundation and are liable to be quashed. Accordingly, the legal ground raised by the assessee is allowed. Since the reassessment itself is held to be invalid, the other grounds raised in the appeal become academic in nature and do not require adjudication.

7 ITA No.7510 & 7511/Mum/2025 ESSEN Consulting 9. In the result, the appeal of the assessee bearing ITA No.7510 and 7511/Mum/2025 are allowed. Order pronounced in the open court on 03rd day of February 2026. Sd/- Sd/- (MAKARAND VASANT MAHADEOKAR) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 03/02/2026 SAUMYASr.PS Copy of the Order forwarded to: 1. अपीलाथ�/The Appellant , 2. �ितवादी/ The Respondent. 3. आयकरआयु� CIT 4. िवभागीय�ितिनिध, आय.अपी.अिध., मुंबई/DR, ITAT, Mumbai 5. गाड�फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, MUMBAI