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Facts
The assessee filed an appeal against an order of the CIT(A). The assessee raised an additional ground challenging the validity of the notice issued under section 148 of the Income Tax Act, 1961, arguing it was issued prior to the mandatory approval under section 151.
Held
The Tribunal held that the notice issued under section 148 was invalid as it was issued prior to the communication of the approval under section 151. This procedural lapse goes to the root of the matter and renders the notice and consequent assessment order null and void.
Key Issues
Whether the notice issued under section 148 of the Income Tax Act, 1961, for reassessment is valid if it was issued before the communication of the approval under section 151 of the Act.
Sections Cited
148, 147, 151, 143(3)
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Income Tax Appellate Tribunal, “B” BENCH, KOLKATA
Date of concluding the hearing : 28.01.2026 Date of pronouncing the order : 17.02.2026 O R D E R Per Rajesh Kumar, AM
The present appeal filed by the assessee arises from order dated 22.08.2025 passed u/s 250 of the Income Tax Act, 1961 (hereafter referred to “the Act”) by the Ld. Commissioner of Income Tax (Appeals), Kolkata-21 [hereafter referred to “the Ld. CIT(A)].
At the outset, the Ld. Counsel of the assessee pointed out that the assessee has filed additional ground vide letter dated 27.01.2026 challenging the validity of notice u/s 148 of the Act dated 29.03.2017. For the sake of ready reference, the additional ground raised by the assessee is extracted below:
Kippy Engineering Pvt. Ltd. "That the impugned reassessment order dated 29.12.2017 passed u/s. 143(3) read with section 147 of the act that in the case of the assessee for the reassessment year 2010-11 is without jurisdiction, illegal, invalid and bad in law. The reassessment proceedings were wrongly initiated vide notice dated 29.03.2017 u/s. 148 even prior to the receipt of the proforma form on 30.03.2017 containing the mandatory approval of the sanctioning authority i.e. the Principal Commissioner of Income tax Central 2 Kolkata as required to be obtained u/s. 151 of the act."
After hearing the rival contentions and perusing the material on record, we find that the assessee has raised an additional ground of appeal challenging the jurisdiction of the AO to make addition. In our opinion the issued raised in the additional ground is a purely a legal issue qua which all the facts are available in the appeal folder and no further verification of facts are required from any quarter whatsoever. In our considered view the assessee is at liberty to raise any legal issue before any appellate authority for the first time even when the same has not been raised before the lower authorities. The case of the assessee is squarely covered by the decisions of the Apex court in the case of i) Jute Corporation of India Ltd. Vs CIT in 187 ITR 688, ii) National Thermal Power Co. Ltd v. CIT [1998] 229 ITR 383 and also by the decision of Hon’ble Calcutta High Court in PCIT vs. Britannia Industries Ltd. [2017] 396 ITR 677 (Cal). Therefore, we are inclined to admit the same for adjudication.
The Ld. AR vehemently submitted before us that the reopening of assessment made by the AO u/s 147 of the Act by issuing notice u/s 148 of the Act on 29.03.2017 is invalid and nullity in the eyes of law as the notice u/s 148 of the Act was issued on 29.03.2017 whereas the approval u/s 151 of the Act was conveyed to the AO vide communication no. 9198 dated 28.03.2017 received by the office of AO on 30.03.2017 under diary no. 1455. The Ld. AR therefore, prayed that the notice issued u/s 148 of the Act is invalid as the same was issued prior to the communication of approval u/s 151 of the Act to the AO. The ld. AR submitted that consequently, the assessment framed on the basis of said notice also bad in law and may be quashed. The Ld. Counsel relied on the decision of
5. The Ld. DR on the other hand relied heavily on the order of authorities below by submitting that the approval was signed by the Additional CIT on 28.03.2017 and thereafter signed by the Ld. PCIT-2, Central Circle, Kolkata which was prior to the date of notice i.e. 28.03.2017. Therefore, the mere fact that this was communicated on 30.03.2017 would not render the said notice issued u/s 148 of the Act as invalid as argued by the Ld. Counsel of the assessee. The Ld. DR therefore prayed that the additional ground raised by the assessee may kindle be dismissed.
6. After hearing the rival submission and perusing the material available on record, we find that the assessee moved the proposal to PCIT for initiating proceeding u/s 148 of the Act on 27.03.2017 after recording reasons which was signed by the Add. CIT Kolkata on 28.03.2017. We note from the Item No. 13 in the said proposal that PCIT signed the proposal without mentioning any date in the approval granted u/s 151 of the Act. For the ready reference, the same is extracted below:
7. The same was communicated to the AO vide letter dated 28.03.2017 however, the same was received by the office of AO on 30.03.2017 as is apparent from the said communication. For the sake of ready reference same is extracted below:
8. On the basis of above extractions, we find that certainly the approval granted u/s 151 of the Act was conveyed to the DCIT, Central Circle 3(4), Kolkata on 30.03.2017 whereas the notice u/s 148 of the Act was issued on 29.03.2017 meaning thereby that notice was issued even prior to the communication of approval granted by the Ld. PCIT u/s 151 of the Act. In our considered opinion, the issuance of notice u/s 148 of the Act even prior
Kippy Engineering Pvt. Ltd. to the communication of approval u/s 151 of the Act is serious lapse which goes to the root of the matter and renders the notice issued u/s 148 as null and void in the eyes of law and so is the assessment framed consequently. The case of the assessee finds support from the decision of the Paras Plaza Pvt. Ltd. Vs. ITO Ward 10(4), Kolkata (supra), wherein the similar issue has been decided in favour of the assessee by the coordinate Bench of the Tribunal, the operative part of the decision is extracted below:
“04. After hearing the rival contentions and perusing the materials available on record, we find that in this case the notice u/s 148 of the Act was issued by the ld. AO on 26.03.2019, whereas the approval was communicated to the ld. AO, the ACIT, Circle10(2), Kolkata by ITO Ward 10(4), Kolkata for PCIT-4, Kolkata vide letter dated 28.03.2019. For the sake of ready reference the same is extracted below: - “No. Pr. CIT-4/Kol/148/2018-19/13414 Dated 28.03.2019 To The DCIT, Circle-10(2), Kolkata Sir, Sub: Approval for reopening of proceedings u/s. 147 of the I.T. Act, 1961 in the case of M/s. Paras Plaza Pvt. Limited.; PAN AAECP8301N for the A.Y. 2012-13- matter regarding. Please refer to the above I am directed to inform you that Ld. Principal Commissioner of Income Tax- 4. Kolkata, has given his kind sanction for reopening of proceedings u/s. 147 of the Income Tax Act, 1961, in respect of the above-mentioned case. I am enclosing herewith the form for recording the reasons for initiating proceedings under section 148 and obtaining the approval of the Pr. Commissioner of Income Tax4. Kolkata, on the above-mentioned case for your information and necessary action. Encl: As stated above Yours faithfully Sd/- (Bikash Ranjan Gain) ITO, Tech-4, Kolkata For Pr. CIT-4 Kolkata Dated: 28.03.2019.
We note that though the approval u/s 151 of the Act was granted by the PCIT- 4, Kolkata on 25.03.2019, as is apparent from the notings and signature of the ld. PCIT on the proposal as moved by the ld. AO however the same was communicated to the assessee on 28.03.2019. For the sake of ready reference, the said approval is extracted as under: -
We note that the notice was issued by the ld. AO on 26.03.2019, meaning thereby that the same was issued prior to the communication of sanction u/s 151 of the Act. In our opinion, the notice issued u/s 148 of the Act on 26.03.2019, even before the communication of the order from the ld. PCIT to the ld. AO which was actually done on 28.03.2019, therefore, the notice issued u/s 148 of the Act is invalid as the same was issued even prior to the communication of approval u/s 151 of the Act to the ld. AO thereby rendering all the consequential proceedings including the assessment framed to be nullity and invalid in the eyes of law. Therefore, we are inclined to quash the reopening of assessment and the consequent order passed by the ld. Assessing Officer. The case of the assessee find support from the decision of the Hon'ble Apex Court in the case of Sethi Auto Service Station and Anr. Vs. Delhi Development Authority and Ors. 2008 (10) TMI 659 (SC), wherein the Supreme Court has held as under: - “12. It is trite to state that notings in a departmental file do not have the sanction of law to be an effective order. A noting by an officer is an expression of his viewpoint on the subject. It is no more than an opinion by an officer for internal use and consideration of the other officials of the department and for the benefit of the final decision-making authority. Needless to add that internal notings are not meant for outside exposure. Notings in the file culminate into an executable order, affecting the rights of the parties, only when it reaches the final decision-making Kippy Engineering Pvt. Ltd. authority in the department; gets his approval and the final order is communicated to the person concerned.
In Bachhittar Singh Vs. The State of Punjab3, a Constitution Bench of this Court had the occasion to consider the effect of an order passed by a Minister on a file, which order was not communicated to the person concerned. Referring to the Article 166(1) of the Constitution, the Court held that order of the Minister could not amount to an order by the State Government unless it was expressed in the name of the Rajpramukh, as required by the said Article and was then communicated to the party concerned. The court observed that business of State is a complicated one and has necessarily to be conducted through the agency of a large number of officials and authorities. Before an action is taken by the authority concerned in the name of the Rajpramukh, which formality is a constitutional necessity, nothing done would amount to an order creating rights or casting liabilities to third parties. It is possible, observed the Court, that after expressing one [1962] Supp 3 SCR 713 opinion about a particular matter at a particular stage a Minister or the Council of Ministers may express quite a different opinion which may be opposed to the earlier opinion. In such cases, which of the two opinions can be regarded as the "order" of the State Government? It was held that opinion becomes a decision of the Government only when it is communicated to the person concerned.
To the like effect are the observations of this Court in Laxminarayan R. Bhattad & Ors. Vs. State of Maharashtra & Anr.4, wherein it was said that a right created under an order of a statutory authority must be communicated to the person concerned so as to confer an enforceable right.”
In the light of the above decision and considering the facts and circumcisions of the case, we are inclined to quash the re-opening of assessment as well as the consequent assessment order.
In the result, the appeal of the assessee is allowed.
Consequently, the notice issued u/s 148 of the Act as well as the assessment framed u/s 143(3)/147 dated 29.12.2017 are quashed.
In the result, the appeal of the assessee is allowed.
Order pronounced on 17.02.2026.