Loading judgment…
Facts
The assessee's appeal was against an order of the NFAC for AY 2017-18. The original notice under Section 148 was issued on 24.06.2021. Subsequently, a notice under Section 148A(b) was issued on 24.05.2022, followed by an order under Section 148A(d) and a fresh notice under Section 148 on 30.07.2022.
Held
The tribunal held that the notice issued under Section 148 on 30.07.2022 was in violation of Section 151(ii) of the Act, as it was issued without the prior approval of the specified authority under the new regime. Consequently, the notice and the reassessment order were quashed.
Key Issues
Whether the notice issued under Section 148 dated 30.07.2022, after the introduction of the new reassessment regime, is valid without prior approval as required by Section 151(ii)?
Sections Cited
148, 148A(b), 148A(d), 151, 151(ii)
AI-generated summary — verify with the full judgment below
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, DELHI ‘B’ BENCH,
Before: MS. MADHUMITA ROY, & SHRI NAVEEN CHANDRA
This appeal by the assessee is preferred against the order of the NFAC, Delhi dated 12.07.2024 for A.Y 2017-18.
Page 1 of 5 submitted that the issue raised in this appeal is covered by the decision of the Hon'ble Supreme Court in the case of Rajeev Bansal 167 taxmann.com 70.
Brief facts of the case are that Notice u/s 148 of the Income-tax Act, 1961 [the Act, for short] was issued under the unamended Act to the assessee on 24.06.2021. Thereafter, in view 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 Id AO issued letter u/s 148A(b) of the Act on 24.05.2022. The assessee filed its reply on 07.06.2022. The Assessing Officer passed an order u/s 148A(d) of the Act on 29.07.2022 rejecting the objections of the assessee and proceeded to issue notice u/s 148 of the Act on 30.07.2022. The bone of contention is whether the subsequent notice issued u/s 148 of the Act on 30.07.2022 is to be treated as legal or not in the light of decision of Hon'ble Supreme Court in the case of Union of India Vs. Rajeev Bansal reported in 469 ITR 46 (SC).
The ld. counsel for the assessee vehemently contended that the notice u/s 148 of the Act dated 30.07.2022 would have to be compliant with the new regime of reassessment as explained by the Hon'ble Supreme Court in the case of Rajeev Bansal 167 taxmann.com 70. The Page 2 of 5 Act could have been issued only with the prior approval of the specified authority as per section 151 of the Act which in the case of the assessee is PCCIT/PDGIT or CCIT. As, in the instant case, the approval is from PCIT, hence the notice u/s 148 is not in accordance with law. The ld AR placed reliance on the following decisions: i) ACIT Vs. Ramchand Tahkurdas Jhamtani 173 taxmann.com 182 ii) Ramesh Bachulal Mehta Vs. ITO 177 taxmann.com 606 iii) Rahat Mohd. Riyazuddin Shaikh Vs. ITO 175 taxmann.com 149 iv) ACIT Vs. Surya Ferrous Alloys [P] ltd 169 taxmann.com 736
The ld. DR, on the other hand, relied on the orders of the authorities below.
We have heard the rival submissions and have perused the relevant material on record. We find that the admitted facts are that the original notice u/s 148 was issued under the amended Act to the assessee on 24.06.2021. Thereafter, in pursuant to the decision of the hon’ble Supreme Court in the case of Ashish Agarwal (2023) 01 SCC 617, the Assessing Officer passed an order u/s 148A(d) of the Act on 29.07.2022 and issued a notice u/s 148 of the Act on 30.07.2022 after taking prior approval of PCIT u/s 151 of the Act. The decision of Hon'ble Supreme Court in the case of Union of India Vs. Rajeev Bansal reported in 469
Page 3 of 5 new regime introduced by the Finance Act 2021 w.e.f. 01.04.2021, the AO has to follow the process of obtaining the prior approval of specified authority as per section 151(ii) of the new regime, which in the case of instant assessee is PCCIT/PDGIT or CCIT. We are therefore of the considered view that thre is violation of the provision of section 151(ii) of the Act in issuance of notice u/s 148.
We find that the hon’ble Bombay High Court in the case of Ramesh Bachulal Mehta Vs. ITO 177 taxmann.com 606 have held that notice u/s 148 in violation of the provisions of section 151(ii) is bad in law and is required to be quashed. Respectfully following the above decision, we hold that the notice issued u/s 148 dated 30.07.2022 for A.Y. 2017-18 in the instant case, is in violation of section 151(ii) and the same is, therefore, liable to be quashed. In light of the above, we also quash the reassessment order emanating out of such notice u/s 148 of the Act.
Since the notice u/s 148 is quashed, no separate adjudication is made on other grounds. Further, as the assessment order has been quashed, all the issues raised by the assessee in his appeal, which deal with the merits of the case become academic and infructuous and require no separate adjudication. Grounds of appeal are allowed.
Page 4 of 5 is allowed.
The order is pronounced in the open court on 07.11.2025.