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Facts
The revenue filed an appeal against the order of the CIT(A), and the assessee filed a cross-objection. The core issue was the validity of the notice issued under Section 148, specifically the approval obtained for its issuance. The assessee contended that the approval was granted by the Principal Commissioner of Income Tax (PCIT) instead of the Principal Chief Commissioner of Income Tax (PCCIT), making the notice bad in law.
Held
The Tribunal held that the notice issued under Section 148 was bad in law because the approval was granted by the PCIT-1, Kolkata, whereas Section 151(ii) of the Act mandates approval from the Pr. CCIT for reopening beyond three years. Citing decisions from the Bombay High Court and the Jurisdictional High Court, the Tribunal quashed the notice and the subsequent assessment.
Key Issues
Whether the notice issued under Section 148 for reopening of assessment is valid when the approval for issuance was granted by the Principal Commissioner (PCIT) instead of the Principal Chief Commissioner (PCCIT) as required by Section 151(ii) of the Income Tax Act.
Sections Cited
148, 151(ii), 148A(b), 148A(d)
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Income Tax Appellate Tribunal, “A” BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI LAXMI PRASAD SAHU
ORDER PER GEORGE MATHAN: ITA 2801/Kol/2025 is an appeal filed by the revenue against the order of the Commissioner of Income Tax (Appeals), NFAC, Delhi [hereinafter referred to as the ‘CIT(A)’] in appeal no.NFAC/2015- 16/10264196 dated 22.09.2025 and C.O No.13/Kol/2026 is a cross-
Shri Narendra Kedia, Advocate represented on behalf of the assessee and Shri Soumitra Ghosh, Sr. DR represented on behalf of the revenue.
3. At the time of hearing, it was submitted by the ld. AR that in the cross-objection, the assessee has raised legal ground that the notice issued u/s 148 is bad in law in so far as the approval has been granted by the Pr. CIT-1, Kolkata whereas the approval is supposed to be granted by Pr. CCIT as per provision of section 151(ii) of the Act. The ld. AR placed reliance on the decision of Hon’ble Bombay High Court in the case of Vodafone Idea Ltd. vs. DCIT vide WP No.2768 of 2022 dated 06.02.2024 and also on the decision of Hon’ble Calcutta High Court in the case of K K Agarwal and Sons HUF vs. ITO in WPA 25770 of 2022 dated 14.12.2022 wherein, the Hon’ble Jurisdictional High Court has held as under:
“Pursuant to the order of this Court dated 30th November, 2022, Mr. Dutt learned advocate appearing for the respondent has filed a written instruction with supporting documents on the issue of approval taken by the appropriate authority on issuance of notice under Section 148A(b) of the Income Tax Act, 1961. It is the case of the petitioner that the assessment year involved for reopening of the assessment is assessment year 2016-2017 and the appropriate authority for grant of approval in such case are the authorities under Section 151(ii) of the Income Tax Act, 1961. It appears from record and instruction submitted by Mr. Dutt that in this said case approval has been granted by principal CIT -9, Kolkata who is not the authority falls under Section 151(ii) of the Act as such the approval in this case is not an authority authorized under the law and such approval is not 2 sustainable in law and in view of this factual and legal position the impugned notice under Section 148A(b) of the Act and all subsequent proceedings are not sustainable in law and accordingly quashed. However, quashing of the impugned notice and subsequent proceedings will not be a bar on the part of the Income Tax authorities concerned to initiate any fresh proceeding in future in accordance with law. With this observation and direction this writ petition being WPA 25770 of 2022 stands disposed of. Let the record produced by Mr. Dutt be kept with the record.” 2 C.O. No.13/Kol/2026 Assessment Year: 2016-17 3.1 The ld. AR also placed reliance on the decision of Coordinate Bench of this Tribunal in the case of Sri Nikhil Maheswari vs. ITO in wherein the Coordinate Bench has held as under:
7. After hearing the rival contentions and perusing the materials available on record, we find that the assessment was reopened after a period of three years from the end of the relevant assessment year as the notice u/s 148 of the Act was issued on 28.07.2022, whereas the assessment year involved is 2017-18 and thus is apparently beyond three years from the end of the relevant assessment year. Therefore, in term of section 151 of the Act, the approval was required to be taken from the ld. PCCIT, whereas the AO has taken approval from ld. PCIT-5, Kolkata. In our opinion, the approval has not been granted by the competent authority as prescribed under section 151 of the Act. Therefore, the notice issued u/s 148 of the Act and consequent assessment are nullity and bad in law. The issue is covered by the decision of Hon'ble Bombay High Court in Writ Petition No.3249 of 2022 in case of Agnello Oswin Dias Vs. ACIT dated 22.02.2024, wherein it has held as under:- “4. The impugned order and the impugned notice both dated 22 April 2022 state that the Authority that has accorded the sanction is the PCIT, Mumbai-5. The matter pertains to Assessment Year ("AY") 2018-2019 and since the impugned order as well as the notice are issued on 22 April 2022, both have been issued beyond a period of three years. Therefore, the sanctioning authority has to be the PCCIT as provided under Section 151 (ii) of the Act. The proviso to Section 151 of the Act has been inserted only with effect from 1" April 2023 and, therefore, shall not be applicable to the matter at hand. 5. In the circumstances, as held by this Court in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors., the sanction is invalid and consequently, the impugned order and impugned notice both dated 22nd April 2022 under Sections 148A(d) and 148 of the Act are hereby quashed and set aside.” 2.1. Similarly, decision of Hon'ble Bombay High Court in case of Vodafone Idea Ltd. Vs. DCIT vide WP No. 2768 of 2022 dated 06.02.2024, wherein it has followed the decision of Agnello Oswin Dias (supra), as under:- “1. Petitioner is impugning a notice dated 19 March 2022 issued under Section 148A(b) of the Income Tax Act, 1961 ("the Act"), the order passed under Section 148A(d) of the Act and the notice both dated 7th April 2022 issued under Section 148 of the Act. One of the grounds raised
is that the sanction to pass the order under Section 148A(d) of the Act and issuance of notice under Section 148 of the Act is invalid inasmuch as the sanction has been admittedly issued by the Principal Commissioner of Income Tax ("PCIT") and not by the Principal Chief Commissioner of Income Tax (PCCIT").
2. Petitioner's request for a copy of the sanction has also been denied. Even in the affidavit in reply, the Department is refusing to give the sanction which makes us wonder what is the national secret involved in that, that Assessee is being refused what he is rightfully entitled to receive from the Department. In the affidavit in C.O. No.13/Kol/2026 Assessment Year: 2016-17 reply, the stand taken by the Revenue is it will be made available during the re- assessment proceeding.
The impugned order and the impugned notice both dated 7th April 2022 state that the Authority that has accorded the sanction is the PCIT, Mumbai 5. The matter pertains to Assessment Year ("AY") 2018-19 and since the impugned order as well as the notice are issued on 7th April 2022, both have been issued beyond a period of three years. Therefore, the sanctioning authority has to be the PCCIT as provided under Section 151 (ii) of the Act. The provisio to Section 151 has been inserted only with effect from 1 April 2023 and, therefore, shall not be applicable to the matter at hand.
In these circumstances, as held by this Court in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors., the sanction is invalid and consequently, the impugned order and impugned notice both dated 7th April 2022 under section 148A(d) and 148 of the Act are hereby quashed and set aside.
5. Petition disposed. No order as to costs. All rights and contentions are kept open.
6. For completion of record, Respondents are directed to make available to Petitioner copy of the approval form as well as the approval accorded for issuance of order under Section 148A(d) and Section 148 of the Act within one week from this order being uploaded.” 2.2. Similarly, in the case of Haresh kumar Dungarmal Jain Vs. DCIT vide vide order dated 24.02.2025 & Davos International Fund Vide dated 13.01.2025 the issue is decided on the same lines.
Considering the facts and circumstances of the case and also the above decisions, we are inclined to quash the reopening of assessment as well as the assessment order passed the ld. AO. .In the result, the appeal of the assessee is allowed. 9 “ 3.2 The ld. AR also drew our attention to the notice issued u/s 148 which reads as follows:
In reply, it was submitted by the ld. Senior DR that the approval has been rightly granted from the PCIT-1, Kolkata.
We have considered the rival submissions. A perusal of the notice u/s 148 clearly shows that the approval has been granted by the PCIT-1, Kolkata whereas as per the provision of section 151(ii) of the Act, the notice is required to be issued by the Pr. CCIT. This view is also supported by the decision of the Hon’ble Bombay High Court as referred supra and also on the decision of Hon’ble Jurisdictional High Court in the case of K K Agarwal and Sons HUF vs. ITO (supra).
Under the circumstances, respectfully following the principle laid down by the Hon’ble Jurisdictional High Court in the case of K K Agarwal and Sons HUF (supra), the notice issued u/s 148 of the Act having been issued by the PCIT-1, Kolkata is held as bad in law and consequent assessment also stands quashed. As the assessment order has been quashed, the revenue’s appeal becomes infructuous and the same is dismissed as infructuous. The Cross-objection filed by the assessee stands allowed and the other legal grounds raised in the cross- objection are not being adjudicated.
8. In the result, the appeal of the revenue stands dismissed and the cross-objection of the assessee stands allowed.
Kolkata, the 2nd March, 2026.