Approval from specified authorities is essential for reopening assessments beyond three years under the new regime of the Income Tax Act.

आदेश/ORDER

PER SANDEEP GOSAIN, JM:

The present appeal has been filed by the assessee challenging the impugned order dt. 17.04.2025 passed under section 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre (NFAC) / CIT(A) for the assessment year 2016-17.

2. At the very outset, Ld. AR appeared on behalf of the assessee pressed ground No. 2, which is legal in question and relates to challenging the order of Ld. CIT(A) in upholding the approval sought by the AO while initiating proceedings of reopening. Therefore we have decided to adjudicate this ground firstly as it goes to the roots of the case.

3. We have heard the counsels for both the parties, perused the material placed on record, judgments cited before us and the orders passed by the revenue authorities. From the records, we noticed that the year under consideration is A.Y 2016-17 and the proceedings u/s 148A(d) of the Act in consequence to Hon’ble Supreme Court’s order 04.05.2022 were initiated and consequently the order under Clause – D of 148A of the Act was passed on 30.07.2022 and in the order it has been categorically mentioned that the same is being passed with prior approval of Ld. PCIT, Mumbai – 20. The copy of the said order is at paper book page No. 49-52. Apart from this notice u/s 148 of the Act was also issued on 30.07.2022 which is at paper book page No. 53, wherein at para 3 it has been categorically mentioned that this notice is being issued after obtaining the approval of Ld. PCIT, Mumbai - 20.

4. Admittedly in this case the proceedings for reopening has been initiated after the expiry of 3 years, thus as per the provisions of Sec. 151 of the Act for issue of notice beyond 3 years from the end of relevant assessment year, approval of Ld. Principle Chief Commissioner of Income Tax (PCCIT) or Ld. Chief Commissioner of Income Tax (CCIT) was required. In this case undisputedly the notice u/s 148 of the Act had been issued beyond the period of 3 years from the end of the relevant assessment. Therefore in our view, the approval of Ld. PCCIT was required. In this regard reliance is being placed upon the decision in the case of M/s Nickson Morries Rodricks Vs. ITO , in ITA No. 180/Mum/2025 and Ajay Multi Projects Pvt Ltd Vs. DCIT , in ITA No. 587/Mum/2025, wherein the ‘identical issue’ was decided in favour of assessee and the operative portion of the decision is reproduced herein below:

7. We have heard the counsels for both the parties, perused the material placed on record and judgments cited before us and the orders passed by the revenue authorities. It is undisputed fact that the impugned notice u/s 148 of the Act was issued by the department on 29.07.2022 for the year under consideration as in sub para (3) of the impugned notice it clearly mentioned that the said notice is being issued after obtaining the prior approval of PCIT instead of PCCIT as is required u/s 151 of the Act. In this regard, we placed reliance upon the decision of the Coordinate Bench of ITA T in ITA No. 3551/Mum/2024 ( supra ), wherein the ‘identical issue’ was decided in favour of assessee and the operative portion of the decision is reproduced herein below:

4. We have heard both the sides and have perused the material on record in relation to this issue. We have also taken into consideration the judicial precedents cited during the course of hearing.

5 In the facts and circumstances of the present case the issue that arises for consideration is whether the Principal Commissioner of Income Tax or the Principal Chief Commissioner of Income Tax was the Specified Authority for seeking approval for passing order under Section 148 A(d) of the Act and issuance of notice under Section 148 of the Act (new regime) for the Assessment Year 2017-18.

6 In this regard we deem it appropriate t