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Facts
The assessee's appeal pertains to the assessment year 2017-18. The key issue is the validity of a notice issued under Section 148 of the Income Tax Act, 1961, which was based on the approval of the Principal Commissioner (Pr. CIT) instead of the Principal Chief Commissioner (Pr. CCIT). This notice was issued after more than three years from the end of the relevant assessment year.
Held
The Tribunal held that since the notice under Section 148 was issued beyond three years from the end of the assessment year, the prior approval for such reopening should have been obtained from the Principal Chief Commissioner (Pr. CCIT), not the Principal Commissioner (Pr. CIT). Therefore, the approval was invalid, making the notice and the consequent assessment order bad in law.
Key Issues
Validity of reassessment notice issued without obtaining prior approval from the competent authority (Pr. CCIT instead of Pr. CIT) when issued beyond three years from the end of the assessment year.
Sections Cited
148, 151
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Income Tax Appellate Tribunal, “CUTTACK BENCH, CUTTACK
Before: SHRI GEORGE MATHAN & SHRI RAJESH KUMAR
ORDER PER BENCH: This is an appeal filed by the assessee against the order of the NFAC, Delhi [hereinafter referred to as the ‘CIT(A)’] in appeal no.NFAC/2016-17/10276128 dated 11.07.2025 for the assessment year 2017-18. 2. Shri Pranaya Ku. Mishra, Prashant Kumar Mishra & Narahari Swain, Ars represented on behalf of the assessee and Shri Shakeer Ahamed, Sr. DR represented on behalf of the revenue.
3. It was the submission by the ld. AR that the impugned assessment year is 2017-18. The ld. AR drew our attention to the notice issued u/s 148 dated 16.112022 which reads as follows:
3.1 It was the submission that this notice has been issued after obtaining prior approval of Pr. CIT-1, Bhubaneswar on 24.08.2022. It was the submission that as per the provisions of section 151, prior approval is to be taken from Pr. CCIT and not the Pr. CIT. It was the submission that the notice issued u/s 148 is bad in law. It was the submission that this issue is squarely covered by the decision of the Coordinate Bench of this Tribunal in the case of Pradyumna Kumar Lath vs. ACIT in dated 25.02.2026, wherein, the Coordinate Bench of this Tribunal held as under:
5. We have considered the rival submissions. We find that the assessment was reopened after 03 years from the end of the relevant assessment year by issuing notice u/s 148 of the Act on 28.07.2022 whereas the assessment year involved is 2016-2017 and, thus, is 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. Pr.CCIT, whereas the AO has taken approval from ld. Pr.CIT-1, Sambalpur. Accordingly, in our opinion, the approval has not been granted by the competent authority as prescribed under the Act under section 151(ii) of the Act. Therefore, the notice issued u/s 148 of the Act with 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 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.”
6. 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, the stand taken by the Revenue is it will be made available during the re-assessment proceeding.
3. 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.
4. 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.
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.”
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. Similar ratio has been laid down in the cases as decided by the Hon’ble Bombay High Court Alag Property Construction Private Limited Vs ACIT Writ Petition No. 3938 of 2022 order dated 8.9.2025 and in Ramesh Bachulal Mehta Vs Income Tax Officer (2025) 177 taxmann.com 606 (Bom).
Further the Hon’ble Supreme Court in the case of ACIT, International Taxation Vs. LinkedIn Singapore Pte. Ltd., reported in [2025] 180 taxmann.com 158 (SC) has dismissed the SLP filed by the revenue and upheld the decision of the Hon’ble Bombay High Court wherein it was held that where approval for initiation of reassessment proceedings was granted by Commissioner after expiry of 3 years from end of relevant assessment year, said approval should have been granted by Principal Chief Commissioner, thus, impugned order passed under section 148A(d) of the Act and impugned notice issued under section 148 of the Act were to be quashed.
A perusal of the facts in the present case clearly shows that the law as on the date for issuance of notice has been repeatedly held by various 7 Hon’ble High Courts and the Hon’ble Apex Court. As in the present case it is noticed that the notice u/s.148 of the Act dated 28.07.2022 has been issued on the approval granted by the Principal Commissioner of Income Tax, however, the approval was required to be granted in such cases by the Principal Chief Commissioner of Income Tax. The notice u/s.148 of the Act has been issued beyond the period of 03 years from the end of the impugned assessment year. As it is noticed that the approval is to be granted in such cases by the Pr. Chief Commissioner of Income Tax but the approval for issuance of notice u/s.148 of the Act has been granted by the Pr. Commissioner of Income Tax, therefore, respectfully following the above judicial pronouncements, the approval granted in the case of the assessee for the year under consideration is held to be invalid and accordingly the notice u/s.148 of the Act beyond the period of 03 years from the end of the impugned assessment year, stands quashed. Consequently, the assessment order passed as consequence of the invalid notice issued 148 of the Act also stands quashed.
In reply, the ld. Sr. DR vehemently supported the orders of the Assessing Officer and ld. CIT(A).
5. We have considered the rival submissions. A perusal of the notice u/s 148 clearly shows that the notice has been issued after obtaining prior approval of the Pr. CIT-1, Bhubaneswar and not Pr. CCIT. The notice has been issued beyond 3 years and in such cases, the approval is to be obtained from the Pr. CCIT as per provisions of section 151 of the Act. This being so and respectfully following the decision of the Coordinate Bench of the Tribunal referred supra, the notice u/s 148 is found to be bad in law and the same stands quashed. Consequently, the assessment order stands quashed.
In the result, the appeal of the assessee is allowed.
Kolkata, the 16th March, 2026.