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Facts
The assessee's appeal arises from an order of the National Faceless Appeal Centre (NFAC) concerning Assessment Year 2016-17. The primary issue concerns the validity of approval granted under Section 151 of the Income Tax Act for issuing notice under Section 148A(d).
Held
The Tribunal held that the approval obtained for issuing the notice under Section 148A(d) was not in accordance with the new regime of the Act, as it appeared to have been accorded as per the old regime. The court cited the Supreme Court's decision in Union of India vs. Rajeev Bansal.
Key Issues
Whether the approval obtained for issuing a notice under Section 148A(d) was valid as per the provisions of Section 151 of the Income Tax Act, considering the change in regime.
Sections Cited
147, 144, 144B, 151, 148A, 148
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Income Tax Appellate Tribunal, “G” BENCH, DELHI
Before: SHRI ANUBHAV SHARMA & SHRI MANISH AGARWAL
This appeal is preferred by the assessee against the order dated 08.01.2025 of the National Faceless Appeal Centre (NFAC) Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN & Order No. ITBA/NFAC/S/250/2024-25/1071970572(1) arising out of the appeal before it against the order dated 24.05.2023 passed 147 r.w.s 144 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the Ld. AO for Assessment Year 2016-17.
At the time of hearing the Ld. Counsel has pressed for ground No. 3 to be disposed of as the approval granted under Section 151 of the Act is alleged to be not in accordance with law. In this context, it comes up as an admitted fact that approval of PCIT, Delhi-4, was taken while issuing of order under Section 148A(d) of the Act on 27.07.2022. The year involved is AY 2016-17 and under new regime approval from PCCIT was needed. The issue is covered in favour of the assessee by the decision of Hon’ble Supreme Court in the case of Rajiv Bansal and the same has been relied upon by the Coordinate Bench in the case of M/s Essel Housing Projects Pvt. Ltd. Vs. DCIT, in & 1900/Del/2025, the relevant portion of the case is reproduced as under: for AY 2017-18, the ld. AR has submitted that there was no valid approval for the purpose of section 151 of the Act and appreciating the contention of the ld. AR, we find that in the present case, order u/s 148A(d) has been passed and, thereafter, notice u/s 148 has been issued. The order u/s 148A(d) has been passed and notice issued on 27.07.2022, i.e., after three years from the end of AY 2017-18. The Hon’ble Supreme Court in Union of India vs. Rajeev Bansal, 2024 (10) TMI 264, order dated 03.10.2024, has held in para 81 as follows:-
“81. This Court in Ashish Agarwal (supra) directed the assessing officers to “pass orders in terms of Section 148-A(d) in respect of each of the assesses concerned.” Further, it directed the assessing officers to issue a notice under Section 148 of the new regime “after following the procedure as required under Section 148-A.” Although this Court waived off the requirement of obtaining prior approval under Section 148A(a) and Section 148A(b), it did not waive the requirement for Section 148A(d) and Section 148. Therefore, the assessing officer was required to obtain prior approval of the specified authority according to Section 151 of the new regime before passing an order under Section 148A(d) or issuing a notice under Section 148. These notices ought to have been issued following the time limits specified under Section 151 of the new regime read with TOLA, where applicable.
4. Thus, prior approval of Principal Chief Commissioner or Principal Director General and where these two authorities are not there, then, the Chief Commissioner or Director General are competent authorities to grant the approval. However, in the case in hand, such approval of these competent authorities have not been taken and the copy of notice on record shows that the approval has been accorded by the Principal Commissioner of Income-tax-1, New Delhi on 27.07.2022 which seems to have been as per the old regime. Thus, we are inclined to sustain the ground no.4 in impugned order for in AY 2017-18. The appeal of the assessee in is allowed. The impugned assessment is quashed.
In the light of the aforesaid the legal ground is sustained and the impugned assessment is quashed.
The appeal of the assessee is allowed.
Order pronounced in the open court on 28.11.2025