Loading judgment…
Facts
The assessee filed an appeal against the order of the Ld. CIT(A) for Assessment Year 2017-18. The assessee's primary ground was that the notice issued under Section 148A(b) was liable to be quashed.
Held
The Tribunal held that the notice issued under Section 148 was not valid as the approval was not obtained from the specified authority under Section 151(ii) of the Act, especially since it was issued beyond three years from the end of the assessment year.
Key Issues
Whether the reassessment notice under Section 148 was validly issued without the requisite approval from the specified authority as per Section 151(ii) of the Income Tax Act, 1961.
Sections Cited
148A, 148, 151(ii), 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCHES ‘A’, NEW DELHI.
Before: SHRI SATBEER SINGH GODARA & SHRI S.RIFAUR RAHMAN
(Assessment Year: 2017-18) Durga Agencies Pvt. Ltd., vs. ITO, Ward 7 (1), C/o C.S. Anand, Advocate Delhi. B-81, First Floor (Part B), Defence Colony, Bhishma Pitamah Marg, New Delhi – 110 024. (PAN : AAACD4709Q) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri C.S. Anand, Advocate Ms. Vaishnavi Yadav, Advocate REVENUE BY : Shri Rajesh Kumar Dhanesta, Sr. DR Date of Hearing : 25.06.2025 Date of Order : 27.08.2025 O R D E R
PER S.RIFAUR RAHMAN,AM:
The assessee has filed appeal against the order of the Learned Commissioner of Income-Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [“Ld. CIT(A)”, for short] dated 27.09.2024 for the Assessment Year 2017-18.
At the time of hearing, ld. AR of the assessee pressed the Ground No.1 which read as under :-
1. On the peculiar facts of the case and in law, the letter-cum- notice dt. 19.05.2022 issued by the ITO, Ward 7 (1), Delhi u/s 148A(b) is liable to be quashed.
Ld. AR for the assessee brought to our notice the written submissions submitted by him before the Bench and submitted that the Notice dated 29.07.2022 issued u/s 148 of the Income-tax Act, 1961 (for short) is not a valid notice, as the approval was not granted by the specified authority i.e. Principal Chief Commissioner of Income Tax as mandated u/s 151(ii) He submitted that the impugned notice u/s 148 for AY 2017-18 was issued on 29.07.2022, after obtaining the approval Pr.CIT, Delhi i.e. beyond the period of three years from the end of the relevant assessment year and thus, in terms of sec.151(ii) of the Act, the same was required to be approved by the Principal Chief Commissioner or Principal Director General or where there is no such authority, by Chief Commissioner or Director General. He submitted that in the case of the assessee, it is apparent that the said notice u/s 148 was not issued with the prior approval of the Principal Chief Commissioner or any other authority specified u/s 151(ii) of the Act. In this regard, he placed reliance on the following decisions and prayed to allow the appeal of the assessee :- (i) Hon’ble Delhi High Court in the case of Communist Party of India (Marxist) vs. IT Department - W.P.(C) 9031/2023, [reported in 2025 SCC Online Del 3233] (ii) Hon’ble Delhi High Court in the case of Bhagwan Sahai Sharma vs DCIT - W.P.(C) 3220/2023 [reported in 2025 SCC Online Del 3443] (iii) ITAT, Mumbai Bench in the case of Manish Jaqdish Joshi vs CIT (DRP-3) - (iv) ITAT, Mumbai Bench in the case of ACIT vs Surya Ferrous Alloys Pvt Ltd - ITA No.1406/Mum/2024.
On the other hand, ld. DR of the Revenue relied on the orders of the authorities below.
Considered the rival submissions and the material placed on record. We observed that the Notice dated 29.07.2022 issued u/s 148 of the Act is not a valid notice, as the approval was not granted by the specified authority i.e. Principal Chief Commissioner of Income Tax as mandated u/s 151(ii) We further observe that the impugned notice u/s 148 for AY 2017-18 was issued on 29.07.2022, after obtaining the approval Pr.CIT, Delhi i.e. beyond the period of three years from the end of the relevant assessment year and thus, in terms of sec.151(ii) of the Act, the same was required to be approved by the Principal Chief Commissioner or Principal Director General or where there is no such authority, by Chief Commissioner or Director General. We further observe that in the case of the assessee, the said notice u/s 148 was not issued with the prior approval of the Principal Chief Commissioner or any other authority specified u/s 151(ii) of the Act. In this regard, we find force from the judgment of Hon’ble Delhi High Court in the case of Communist Party of India (Marxist) (supra) wherein Hon’ble Delhi High Court relying on various judgments decided the issue in favour of the assessee as under :- “18. In view of the above, the order dated 29.07.2022 passed under section 148A(d) of the Act is not sustainable. Consequently, the subsequent proceedings, including the assessment order dated 23.05.2023, cannot be sustained. Accordingly, the impugned order passed under section 148A(d) of the Act, the notice issued under section 13\48 of the Act as well as the assessment order dated 23.05.2023 and the demand raised pursuant thereto, are hereby set aside.”
Respectfully following the aforesaid decision of the Hon’ble jurisdictional High Court, we quash the impugned assessment in this case and allow the appeal of the assessee.
Since we have quashed the assessment order on the legal issue, the other grounds raised
by the assessee were not adjudicated at this stage. These are kept open.