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2025 Supreme(Online)(ITAT) 6101
INCOME TAX APPELLATE TRIBUNAL (MUMBAI BENCH)
Shri Rahul Chaudhary, J, Smt Renu Jauhri, ACJ
Income Tax Officer 23(3)(6) – Appellant
Versus
Rahul Hariprasad Tibrewal – Respondent
ITA No. 430/MUM/2025 | C.O. No. 63/MUM/2025
For the Appellants/Petitioners: Shri Dharmesh Shah, Ms. Mitali Parekh
For the Respondents: Shri R. R. Makwana
Timely and proper approval from specified authority is essential for issuing reassessment notices; failure to comply renders actions invalid.
Headnote:(A) Income Tax Act, 1961 - Sections 148, 148A, and 151 - Validity of reassessment notice - Appeal against earlier order by CIT(A) and cross-objection filed by the assessee challenging reassessment proceedings. The court found that the notice was issued without proper approval from the specified authority under Section 151(ii) after the specified time frame, resulting in the notice being quashed due to jurisdictional errors. (Paras 8, 9, 10)
(B) Jurisdictional approval - Required compliance with Section 151 is emphasized, and lack of such compliance affects the issuing officer’s jurisdiction. The non-compliance or incorrect authority approval renders the actions taken invalid. (Para 10)
Facts of the case:
The appeal challenges the assessment made under Section 147 read with Section 144B, with the core issue being the timeline and proper authority present during the issuance of notices under the Income Tax Act.
Findings of Court:
The earlier notices and subsequent assessments were rendered void due to lack of compliance with the Income Tax Act provisions regarding the required authority for reassessment.
Issues: The main issues were whether the approval for the assessment under specific sections of the act was obtained from the correct authority.
Ratio Decidendi: The court held that prior approval from the correct authority as per the provisions laid out in Section 151 was essential for jurisdictional validity; its absence invalidated the subsequent notice and assessment order.
Result: Cross-objection allowed; appeal dismissed.
| Table of Content |
|---|
| 1. core facts of the assessment and appeal. (Para 1 , 2) |
| 2. arguments over the validity of the reassessment notice. (Para 3 , 4 , 5) |
| 3. legal observations on issued notices and required approvals. (Para 6 , 7 , 8 , 9 , 10) |
| 4. final ruling considering jurisdictional compliance. (Para 11) |
ORDER
Per Rahul Chaudhary, Judicial Member:
1. The present appeal and cross objection pertains to Assessment Year 2017-2018. The Revenue has preferred appeal against the order, dated 27/11/2024, passed by the National Faceless Appeal Centre (NFAC), [hereinafter referred to as the ‘CIT(A)’], under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’], whereby the Ld. CIT(A) had partly allowed the appeal of the Assessee against the Assessment Order, dated 22/05/2023, passed under Section 147 read with Section 144B of the Act, for the Assessment Year 2017-2018. The Assessee has filed cross objection.
2. The relevant facts in brief are that notice under Section 148 of the Act (old regime) was issued to the Assessee for the Assessment Year 2017-2018 on 21/06/2021 (i.e., before the expiry of 4 years from the end of Assessment Year 2017-2018). Subsequently, in compliance with the judgment of the Hon’ble Supreme Court in the case of Union of India vs. Ashish Agarwal 444 ITR 1 (SC) [04/05/2022], communication, dated 24/05/2022, was sent to the Assessee intimating that the aforesaid notice issued under Section 148 of the Act (under old regime) would be treated as the show-cause notice issued in terms of Section 148 A(b) of the Act (under new regime introduced by the Finance Act, 2021 w.e.f. 01/04/2021). The Assessing Officer also shared with the Assessee material/information on the basis of which the Assessing Officer had formed a belief that income had escaped assessment. The Assessee filed reply on 04/06/2022. Thereafter, order under Section 148 A(d) of the Act was passed on 30/07/2022 after taking approval from the Principal Commissioner of Income Tax, Mumbai. This was followed by issuance of notice on 30/07/2022 under Section 148 of the Act (new regime). The reassessment proceedings culminated into passing of the Assessment Order, dated 22/05/2023, passed under section 147 read with Section 144B of the Act. The appeal preferred by the Assessee against the aforesaid Assessment Order was partly allowed by the CIT(A) vide Order, dated 27/11/2024. Being aggrieved, the Revenue has preferred the present appeal before the Tribunal challenging the relief granted by the CIT(A), while the Assessee has filed cross-objection challenging the validity of the re-assessment proceedings.
3. We would first take up cross-objection filed by the Assessee raising jurisdictional issue. The cross objection raised by the Assessee read as under:
“1. The Ld. CIT(A) ought to have appreciated that the reopening of assessment by issue of notice u/s.148 of the Act was invalid and void ab initio.”
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. There is no dispute as to facts. It is admitted position that the notice issued under Section 148 of the Act (old regime) on 21/06/2021, was treated as notice issued under Section 148 A(b) of the Act by the Assessing Officer. Thereafter, order under Section 148 A(d) of the Act, was passed on 30/07/2022, and the same was followed by issuance of notice dated 30/07/2022, under Section 148 of the Act (new regime). Thus, the notice under Section 148 of the Act (new regime) was issued after the expiry of 3 years from the end of the relevant assessment year.
6. In the facts and circumstances of the present case the first 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 an
