Reassessment notice under section 148 invalid if approval taken from Principal Commissioner instead of Principal Chief Commissioner when issued after three years from end of assessment year; no retrospective application of time exclusion proviso.

ORDER

PER. RAVISH SOOD, J.M:

The present appeal filed by the assessee company is directed against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, dated 16/09/2025, which in turn arises from the order passed by the Assessing Officer (for short, “AO”) under section 147 r.w.s 144B of the Income Tax Act, 1961 (for short, “the Act”), dated 18/03/2024 for the Assessment Year (AY) 2018-19. The assessee company has assailed the impugned order of the CIT(A) on the following grounds of appeal:

1. The order passed by the Ld. CIT(A) u/s 250 of the Act dated 16.09.2025 is erroneous both on facts and in law to the extent the order is prejudicial to the interest of the appellant.

2. The Ld. CIT(A) erred in dismissing the appeal filed by the assessee without considering the facts and circumstances of the case.

3. The Ld. CIT(A) erred in considering the fact that, the notice issued under section 148 of the Act dt. 07.04.2022 by Circle 8(1), Hyderabad is not valid and is without Jurisdiction as the said ITO has no territorial Jurisdictions.

4. The Ld. CIT(A) ought to have appreciated that mere suspicion by the A.O cannot be equated to reason to believe that income has escaped assessment.

5. The Ld. CIT(A) erred in considering the fact that, the Ld. AO has passed the assessment order without giving any reasonable opportunity of being heard, which is incorrect and bad in law.

6. The Ld. CIT(A) ought to have quashed the assessment made u/s 147 of the Act and ought to have appreciated the fact that when the assessment itself is invalid, the additions made in such assessment are also invalid and are liable to be deleted.

7. The Ld. CIT(A) erred in upholding the addition made the Ld. AO amounting to Rs. 2,37,52,338/- towards purchases made by the assessee, by treating it as unexplained expenditure u/s 69C r.w.s 115BBE of the Act.

8. The Ld. CIT (A) ought to have appreciated the fact that the appellant company has already submitted original purchase invoices, Ledger Copies and bank statements before the AO for verification in support of the impugned purchases.

9. The Ld. CIT (A) erred in confirming the addition made merely on the ground that the appellant has not provided any additional evidence to counter the reasons pointed out by the AO.

10. The Ld. CIT(A) erred in considering the fact that, when the assessee himself admitted that the Purchases were made without actual supply of goods and once the same is offered to Tax in the subsequent year, the same cannot be made addition under section 69 of the Income Tax Act.

11. The Ld. CIT(A) erred in considering the fact that, the Ld. AO inadvertently initiated penalty proceedings under section 271AAC.

12. The assessee may add, alter, or modify or substitute any other points to the grounds of appeal at any time before or at the time of hearing of the appeal.”

2. Succinctly stated, the assessee company had filed its return of income for AY 2018-19 on 31/10/2018 declaring an income of Rs.1,49,01,597/-.

3. Thereafter, the AO based on information received from the DGGI authorities that the assessee company during the subject year had made bogus purchases without actual supply of goods from two concerns, viz., (i) M/s. Sri Prabhu Enterprises (Salika Mark): Rs.1,02,01,088/-; and (ii) M/s. Swasthik Enterprises (Chanduluru Jagendra Prasad Sarma): Rs.1,35,51,250/- initiated proceedings under section 148A of the Act. Thereafter, the AO issue