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Facts
The assessee's appeal was filed beyond the prescribed limitation period. The assessee had filed a return of income, which was processed. Subsequently, information regarding bogus purchases prompted the reopening of the assessment. The Assessing Officer (AO) made an addition on account of unexplained expenditure, and the CIT(A) confirmed the AO's order.
Held
The Tribunal noted that the reopening of the assessment was initiated after a period of three years from the end of the relevant assessment year. Furthermore, the approval for reopening was granted by the PCIT instead of the PCCIT, as required by Section 151 of the Act. The Tribunal relied on various High Court decisions that held such sanctions to be invalid.
Key Issues
Whether the reopening of assessment and the consequent assessment order are valid when the approval under Section 151 was not granted by the competent authority and was beyond the prescribed time limit.
Sections Cited
143(1), 148A(b), 148A(d), 148, 142(1), 151
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, KOLKATA
This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 23.08.2024 for the AY 2017-18.
At the outset, we note that the appeal of the assessee is barred by limitation by 281 days. At the time of hearing the counsel of the assessee explained the reasons for delay in filing the appeal. The Ld. D.R did raise objections to the condonation of dealy. After hearing the rival contentions and perusing the materials available on record, we find that the delay is for bonafide and genuine reasons and hence, we condone the delay and adjudicate the appeal in the following paras.
In the appellate proceedings, the ld. CIT (A) confirmed the order of the ld. AO.
5. The ld. Counsel for the assessee submitted that the reopening of the assessment is not sustainable as the approval accorded u/s.151 of the Act was not in accordance with law.
On the other hand, ld. DR supported the orders of the ld. lower authorities.
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.
“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.
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.” 7.1. 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 reply,
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.
Order pronounced on 17.02.2026.