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Facts
The assessee declared long-term capital gains of Rs.1,07,09,704/-, but the Assessing Officer deemed the entire receipt of Rs.110,45,675/- as bogus and added it under Section 69A of the Income Tax Act, 1961. The assessee challenged this action, including the improper assumption of jurisdiction, before the CIT(A) and subsequently before the ITAT.
Held
The Tribunal held that the reassessment proceedings were invalid because the approval for issuing the order under Section 148A(d) and notice under Section 148 was obtained from the Pr. Commissioner of Income Tax-12. As more than three years had elapsed from the end of the relevant assessment year, approval should have been obtained from the Principal Chief Commissioner or Chief Commissioner as mandated by Section 151(ii) of the Act, rendering the jurisdiction assumed illegal and the proceedings void.
Key Issues
Whether the reassessment proceedings initiated under Section 147/148 of the Income Tax Act, 1961 were valid when the approval for issuing notice under Section 148A(d) and Section 148 was obtained from the Principal Commissioner of Income Tax instead of the Principal Chief Commissioner/Chief Commissioner of Income Tax, as mandated by Section 151(ii) of the Act.
Sections Cited
250, 147, 144B, 148A, 148A(b), 148A(d), 148, 149, 149(1)(b), 151, 151(i), 151(ii), 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “B”NEW DELHI
Before: SHRIMAHAVIR SINGH, HON’BLE & SHRISANJAY AWASTHI
सुनवाईक�तारीख/ Date of hearing: 18.12.2025 18.12.2025 उ�ोषणाक�तारीख/Pronouncement on आदेश /O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
This appeal arises from order u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”), dated 19.05.2025 passed by Ld. CIT(A)-NFAC, Delhi. In this case, the assessee had shown long term capital gains of Rs.1,07,09,704/- in his return of income, but it is seen that the Ld. AO held that the entire receipt of Rs.110,45,675/-, from which the impugned capital gains was derived, was bogus and thereafter he added the entire receipts u/s 69A of the Act.
1.1 Aggrieved with this action of Ld. AO the assessee approached the Ld. CIT(A) where also he could not succeed. It is noteworthy that the assessee had raised the ground of improper assumption of jurisdiction before the Ld. CIT(A) but the same was adjudicated against him.
1.2 Further aggrieved, the assessee has approached the ITAT with as many as eight grounds which challenge the action of authorities below on merits as also on the ground that the assumption of jurisdiction was illegal. In fact,Grounds 2 to 4 are essentially on the issue of assumption of jurisdiction.
Before us, the Ld. AR argued with the help of written submissions and a paper book and requested that the grounds of assumption of jurisdiction should be taken up before the grounds on merits. It was the submission by the Ld. AR that the approval was given by the Pr.
Commissioner of Income Tax instead of the Pr. Chief Commissioner or Chief Commissioner of Income tax as per section 151(ii) of the Act. The Ld. AR read out from his submissions, which for the sake of reference deserve to be extracted on the point of jurisdiction: -
“Submission (collectively for both sub-grounds i.e 3.1 and 3.2) 3.1. The assessment order as passed u/s 147/144B draws its roots from the order u/s. 148A(d) and notice u/s 148 of the I.T. Act issued on 28.07.2022. In this connection, some important facts and dates are listed here below which are very essential to the arguments and submissions under the current ground.
Description Dated End date of Revenant Assessment Year 31.03.2017 (AY 2016-17) End of three years from end date relevant 31.03.2020 assessment year Notice issued u/s 148A(b) of the I.T. Act 22.05.2022 Approval for passing the order u/s 28.07.2022 148A(d) of the I.T. Act received from Pr. Commissioner of Income Tax-12 Approval for issuing notice u/s 148 of the 28.07.2022 I.T. Act received from Pr. Commissioner of Income Tax-12 Order u/s 148A(d) of the I.T. Act passed 28.07.2022 on Notice u/s 148 of the I.T. Act issued on 28.07.2022 3.2. A bare perusal of the chronology of events / dates as noted above clearly stipulates that the necessary approval for passing the order u/s. 148A(d) and issuing notice u/s 148 of the I.T. Act was received from Pr. Commissioner of Income Tax-12, New Delhi. Your kind attention is invited to S. 149 of the I.T. Act read with S. 151 of the I.T. Act. For the sake of convenience, the relevant portions of the two sections are reproduced hereunder: - ………………………. S.151 Specified authority for the purposes of section 148 and section 148A shall be – ……….. (ii) Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year.” 3.3. In the case of the appellant the cause of action for issuing of notice u/s 148A(b) pertains to be an amount of Rs.1,10,45,675/- which allegedly escaped assessment. It is also to be noted that a period of more than three years has lapsed since the last date of the relevant assessment year (i.e AY 2016-17). Thus, in accordance with the conjoint reading of the provisions of section 149 and 151 of the Act, clause (b) to section 149 and clause (ii) to section 151 of the act applies to the facts of the case. In such circumstances, the necessary approval/sanction for issue of order u/s 148A(d) and notice/s 148 should have been taken from Pr. Chief Commissioner of Income Tax, Delhi and not the Pr. Commissioner of Income Tax-12. As such, the approval sought by the assessing authority for issue of order u/s 148A(d) and notice u/s 148 are to be treated as null and void and as such the assessment as framed in the case is liable to be quashed.
3.4. Your kind attention is invited to the judgment of the Hon’ble Delhi High Court in the case of Twylight Infrastructure Pvt. Ltd. Vs. Income Tax Officer, Ward-25(3), Delhi, WPC No. 16524/2022. The facts of the case are identical to the issue under assessment wherein admittedly the order u/s. 148A(d) of the I.T. Act and notice u/s. 148 of the I.T. Act were passed / issued after obtaining prior approval of Pr. Commissioner of Income Tax.” The Ld. AR also relied on some authorities to canvass the point that the approval obtained was not as per law and therefore the entire impugned proceedings were illegal in the eyes of law.
2.1 The Ld. DR supported the orders of the authorities below and stated that the issue of assumption of jurisdiction has been dealt with extensively in the impugned order and the same has been disposed of against the assessee. The Ld. DR pointed out various portions from the orders of authorities below in this regard.
We have carefully considered the rival submissions and have gone through the documents before us. At this stage, we need to extract a table of dates provided by the Ld. AR during the course of arguments which give a clear picture of the mandate u/s 148A, 149 & 151 of the Act:
It is clear that the approval should have been taken from authorities specified in section 151(ii) of the Act instead of section 151(i) of the Act.
Hence, the proceedings are fatally hit by irregular assumption of jurisdiction and thus, the proceedings themselves become void in the eyes of law. In this respect, we also draw strength from the case of Vikram Kapahi reported in 170 taxmann.com 592 (Del) [order dated 13.03.2024].
In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 18.12.2025