DEPUTY COMMISSIONER OF INCOME TAX, DELHI vs. ASSURE JEWELS PVT. LTD , DELHI

In this case the AO has recorded reasons to believe that the income had escaped assessment on19.10.2020 and issued notice u/s 148 dated 04.01.2021 after obtaining approval from the Joint Commissioner of Income Tax, Central Range-IV, Delhi before the Ld. CIT(Appeals) the assessee challenged that this approval which was granted by the JCIT, Central Circle-IV, Delhi is bad in law for the reason that assessment year being 2015-16, four years have been elapsed on 31.03.2020 to initiate the reassessment proceedings and in which case an approval from the CIT was required to be obtained 2 u/s 151(1) of the Act and therefore the approval granted by the JCIT, Central Circle-IV, Delhi is invalid and consequently the reassessment framed by the AO is also invalid. The Ld. CIT(Appeals) considering the submissions of the assessee accepted the contentions of the assessee and quashed the reassessment observing as under:

“5.2 I have considered the facts of the case and submissions filed by the appellant. The appellant contented that the notice issued by the AO is not legally tenable and is void ab- initio, since the AO has issued notice u/s 148 without obtaining valid approval of the competent authority. It has been observed from the facts of the case and the assessment record that the AO has recorded the reason to believe on 19/03/2020 to initiate the reassessment proceeding u/s 147 of the income tax Act, 1961 and the Joint Commissioner of Income Tax, Central Range-A, Delhi has given the approval on 19.10.2070 for initiation of reassessment proceeding. Thereafter, the AO initialed the reassessment proceeding vide notice u/s 148 of the IT Act, 1961 dated 04.01.2021 after taking approval from the Joint Commissioner of Income Tax, Central Range-4. On perusal of the assessment record, it has been also found that the approval for reopening of the case was taken from the Joint Commissioner of Income Tax Central Range-4, New Delhi. In the instant case, the 4 years has been elapsed on 31.03.2020 (i.e. 4 years from the end of the relevant assessment year 2015-16) and to initiate the reassessment proceeding after the lapse of four years, the approval from the Pr. Commissioner of Income Tax is required u/s 151(1) of the Income Tax Act, 1961. However, in the instant ease, the approval has been granted by the Joint Commissioner of Income Tax, Central Range-4, New Delhi. 5.2.1 In the case of Sidhmicro Equities (P.) Ltd vs DOT (2023) 150 taxmann.com 460 (Bom.), Hon’ble Bombay High Court has held that after the expire of four year from the end of the relevant assessment year as provided 3 under Section 151(1) of the Act, it is only the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner who could have accorded the approval and not the Joint Commissioner of income Tax and on this ground alone, we will have to set aside the impugned notice dated 26th March, 2021. Consequently, the order on objections passed on 6th February, 2022 also has to be quashed and set aside. Relevant extract of the order is as under:- “The issue in the petition pertains to A.Y. 2015-16 and one of the primary grounds taken to challenge re-opening proposed is invalid approval under Section 151 of the Income Tax Act, 1961 (the Act). Mr. Sharma tenders affidavit of one Mr. Pradeep Sharma, Deputy Commissioner of Income Tax, Circle 3(3)(1), Mumbai affirmed on 26th April, 2022 in which it is admitted that the sanction has been given by Additional Commissioner of Income Tax (ACIT), Joint Commissioner of Income Tax and not Principal Commissioner. Since the re-opening has been proposed more than four years after the end of the expiry of relevant assessment year as held by us in J M Financial and Investment Consultancy Services Private Limited vs. Assistant Commissioner of Income Tax, Circle 3(2)(1) and Ors. the Taxation and Other Laws (Relaxation of Certain Provisions) Act, 2020 (Relaxation Act) will not apply. Therefore, since four years had expired from the end of the relevant assessment year as provided under Section 151(1) of the Act, it is only the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner who could have accorded the approval and not the Joint Commissioner of Income Tax. On this ground alone, we will have to set aside the impugned notice dated 26th March, 2021. Consequently, the order on objections passed on 6th February, 2022 also has to be quashed and set aside.” It is important to mention here that the Hon’ble Supreme Court of India has dismissed the SLP filed against the order of Hon’ble Bombay High Court in the case of 4

Sidhmicro Equities (P.) Ltd vs DCIT and confirmed the view taken by the Hon’ble Bombay High Court. 5.2.2 In view of the above, since the approval for initiating re-assessment proceedings has not been taken from the competent authority, in this case Pr. Commissioner of Income Tax, Central-2, Delhi, the proceedings initiated U/s 147 r.w.s. 148 of the Act, by the AO not found to be valid in the eyes of law. Hence, it is held that the AO has wrongly assumed the jurisdiction U/s 147 r.w.s. 148 of the Act and the proceedings initiated by the assessing officer are void-ab-initio and liable to be quashed, Hence, tin: grounds taken by the appellant are hereby allowed.”

Order pronounced in the open court on 30.10.2025