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Facts
The assessee filed a regular return of income for AY 2017-18. The assessment was reopened under Section 147 of the Income Tax Act, 1961, after more than three years from the end of the assessment year. The approval for reopening was obtained from the Principal Commissioner of Income Tax (PCIT) instead of the Principal Chief Commissioner of Income Tax (PCCIT).
Held
The Tribunal held that since the reassessment was initiated beyond three years from the end of the relevant assessment year, the approval for reopening under Section 151 of the Act ought to have been obtained from the Ld PCCIT. Obtaining approval from the Ld PCIT was fatal to the assumption of jurisdiction under Section 147, rendering the reassessment proceedings vitiated.
Key Issues
Whether the reassessment proceedings initiated beyond three years are vitiated due to obtaining approval from the incorrect authority under Section 151 of the Income Tax Act, 1961.
Sections Cited
147, 144B, 151, 148, 148A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “C”: NEW DELHI
Before: SHRI M. BALAGANESH
O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in AY 2017-18, arises out of the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. NFAC’, in short] dated 11.03.2025 against the order of assessment passed u/s 147/144B of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 28.03.2023 by the Assessing Officer, National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as ‘ld. AO’).
The assessee has raised regular grounds challenging the validity of assumption of jurisdiction u/s 147 on various facets apart from grounds raised on violation of principle of natural justice and grounds raised on merits of the addition disputed. We find that assessee has also raised additional ground vide letter dated 11.11.2025 raising yet another facet of invalid assumption of jurisdiction u/s 147 of the Act by the ld AO by stating that the approval u/s 151 of the Act in the instant case was granted by the ld Pr. of Income Tax (PCIT) instead of Ld Pr. Chief ld. Commissioner of Income Tax (PCCIT). In our considered opinion, this additional ground goes to the root of the matter, being a purely legal issue and facts relevant for its adjudication are already on record, is hereby admitted and taken up for adjudication first.
We have heard the rival submissions and perused the material available on record. The regular return of income was filed by assessee for AY 2017-18 on 02.11.2017 declaring total income of Rs. 5,03,470/-. Subsequently, the assessment was sought to be reopened u/s 147 of the Act by the ld AO for which the initial notice u/s 148 of the Act was given on 22.04.2021. A show cause notice u/s 148A(b) of the Act was issued to the assessee on 01.06.2022 pursuant to the decision of the Hon'ble Supreme Court in the case of Union of India Vs. Ashish Agarwal reported in 444 ITR 1 (SC) dated 04.05.2022. The order u/s 148A(d) was passed on 29.07.2022. Finally notice u/s 148 of the Act was issued on 30.07.2022. Since, the reopening has been done beyond 3 years from the end of the relevant assessment year, the approval u/s 151 of the Act ought to have been obtained from the Ld PCCIT instead of ld PCIT. The main dispute is that the approval u/s 151 of the Act was obtained from Ld PCIT which would become fatal to the entire assumption of jurisdiction u/s 147 of the Act. Since, the approval in the instant case has been obtained from a wrong authority, the entire reassessment proceedings gets vitiated. Reliance in this regard has been rightly placed by the Learned AR before us on the decision of the Hon’ble Jurisdictional Delhi High Court in the case of Kids Dream International Private Limited vs ACIT in W P (C )
2814/2023 dated 24-2-2025 . The relevant operative portion of the said order is reproduced below:-
2. As is evident from the above, the solitary question which was canvassed for our consideration was the issue of sanction as contemplated under section 151 of the Income Tax Act, 1961 [“Act”]. 3.The reassessment action for Assessment Year [“AY”] 2017-18 came to be commenced immediately after a lapse of three years from the end of the relevant AY. It is in the aforesaid backdrop that Mr. Kantoor, learned counsel, had submitted that the said sanction accorded by the Principal Commissioner of Income Tax [“PCIT”] would not sustain. 4. We note that while dealing with the said question, we had in Abhinav Jindal H.U.F. v. Commissioner of Income Tax and Ors [2024 SCC OnLine Del 6585] duly enunciated the legal position which would obtain. We had ultimately in Abhinav Jindal held that the Taxation & Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 [“TOLA”] provisions would have no bearing on the identification of the competent authority under section 151 for according sanction. 5. In view of the aforesaid, and since undisputedly the facts of the present case the sanction was accorded only by the PCIT, the reassessment action would not sustain. 6. Accordingly and for all the aforesaid reasons, we allow the instant writ petition and quash the impugned order referable to section 148A(d) dated 30 July 2022 and notice under section 148 of even date.”
Similar view was expressed by the Hon’ble Jurisdictional High Court in the case of H and M Hennes and Mauritz Retail P Ltd vs ACIT reported in 174 taxmann.com 1113 (Del HC) dated 14-5-2025.
Respectfully following the same, the reassessment proceedings are hereby quashed and additional ground raised by the assessee is allowed.
Since the entire reassessment is quashed, the other grounds raised by the assessee both on law as well on facts need not be gone into and they are left open.
In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 28/11/2025.