Reassessment notice invalid if approval taken from Principal Commissioner instead of Principal Chief Commissioner under section 151(ii) when over three years from assessment year end; TOLA does not alter specified authority hierarchy.

ORDER

This assessee’s appeal for assessment year 2016-17, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2025-26/1076992154(1), dated 13.06.2025 involving proceedings under section 147 r.w.s. 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

Heard both the parties. Case file perused.

2 For the reasons stated in the assessee’s condonation averments, delay of 139 days in filing of the instant appeal is condoned in light of Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC).

3. It emerges during the course of hearing that there arises the first and foremost issue of validity of the impugned section 148A(b) proceedings herein itself initiated vide notice dated 24.05.2021 in assessment year 2016-17. This is for the precise reason that the learned Assessing Authority had obtained the necessary approval from the Principal Commissioner of Income Tax, Delhi-15, than the prescribed authority under section 151(ii) of the Act i.e. Principal Chief Commissioner or……………………., if more than three years have elapsed from the end of the relevant previous year. This clinching factual position has gone unrebutted from the Revenue side. Faced with this situation, we find that the hon’ble jurisdictional high court in Communist Party of India (Marxist) Vs. Income Tax Department, Circle Exempt 1(1), W.P.(C) No.9031/2023, dated 28^th April, 2025 has already settled the instant issue in the assessee’s favour and against the department that the Assessing Officer’s foregoing failure in obtaining proper section 151 approval vitiates the reopening itself as follows:

“2. The petitioner is a national political party and is registered under Section 29A of the Representation of Peoples Act, 1951. The petitioner filed its return of income for the assessment year [AY] 2016-17 on 15.10.2016, declaring a NIL income, after claiming exemption under Section 13A of the Income Tax Act, 1961.

3. The initial notice under Section 148 of the Act for AY 2016-17 was issued on 28.06.2021. The said notice was unsustainable as it was issued in accordance with the statutory regime as existed prior to 31.03.2021. This court in the case of Mon Mohan Kohli v. Assistant Commissioner of Income Tax & Anr.: Neutral Citation No.: 2021:DHC:4181-DB had set aside such notices that were issued after 31.03.2021 without following the procedure as prescribed under Section 148A of the Act. Some of the other High Courts also took a similar view and struck down notices that were issued under Section 148 of the Act after 31.03.2021 but under the unamended provisions relating to the re-assessment of income that had escaped assessment.

4. The Revenue appealed the decisions rendered by various High Courts to the Supreme Court of India. In Union of India v. Ashish Agarwal: 2022 SCC OnLine SC 543 - which was one of such appeals arising from the decision of the Allahabad High Court - the Supreme Court delivered its decision on 04.05.2022, whereby it concurred with the view that the amended provisions which came into force after 31.03.2021 would be applicable to notices issued thereafter. However, the Supreme Court also issued certain directions in exercise of powers under Article 142 of the Constitution of India. The Court directed that all notices that were issued under Section 148 of the Act after 01.04.2021 till the date of the said decision (04.05.2022), including those that had been set aside by the High Courts, would be construed as show cause notices under Section 148A(b) of the Act. The Assessing Officers were directed to provide the information