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2026 Supreme(Online)(ITAT) 7567
INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH)
Satbeer Singh Godara, Judicial Member
Narinder Kumar Bajaj – Appellant
Versus
Income Tax Officer – Respondent
ITA No. 638/Del/2026 : Asstt. Year: 2017-18
For the Appellants/Petitioners: Somil Agarwal, CA, Saksham Agarwal, CA
For the Respondents: Manoj Kumar, Sr. DR
Reassessment notice beyond three years invalid without Principal Chief Commissioner approval under Section 151(ii); TOLA time extensions do not alter specified authority hierarchy.
Headnote:(A) Income Tax Act, 1961 - Sections 147, 148, 148A, 149, 151 - Reassessment proceedings - Notice under Section 148 issued beyond three years from end of relevant assessment year - Approval obtained from Principal Commissioner instead of Principal Chief Commissioner or Chief Commissioner as required under Section 151(ii) - Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 does not alter specified authority under Section 151 - TOLA extends time limits but does not amend hierarchy of approving authorities - Approval by lower authority renders notice time-barred and invalid - Order under Section 148A(d), notice under Section 148, and consequent assessment order quashed. (Paras 3, 4)
(B) Sanction for reassessment - Determination of specified authority - Depends on time elapsed from end of relevant assessment year - Beyond three years, prior approval mandatory from Principal Chief Commissioner/Principal Director General/Chief Commissioner/Director General - Extension of limitation by TOLA irrelevant for determining approving authority - Subordinate legislation cannot override statutory provisions. (Paras 10-12, 14-17)
Facts of the case:
Reassessment initiated beyond prescribed three-year period from end of relevant assessment year with approval from Principal Commissioner. Assessee challenged validity relying on jurisdictional High Court decisions holding such approval insufficient.
Findings of Court:
Reopening proceedings quashed due to lack of approval from specified authority under Section 151(ii). Subsequent proceedings including assessment order set aside. All merits rendered academic.
Issues: Whether notice under Section 148 issued beyond three years valid with Principal Commissioner’s approval; impact of TOLA on specified authority under Section 151.
Ratio Decidendi: Section 151 mandates higher authority approval for notices beyond three years from assessment year end. TOLA extensions do not modify Section 151 hierarchy; approval by incorrect authority invalidates entire reassessment process.
Result: Appeal allowed.
| Table of Content |
|---|
| 1. appeal against cit(a) order under section 147. (Para 1 , 2) |
| 2. section 148 notice issued beyond 3-year limit. (Para 3) |
| 3. reopening quashed for lack of proper sanction. (Para 4 , 5 , 6) |
ORDER
This assessee’s appeal for Assessment Year 2017-18 arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2025-26/10823992650(1) dated 07.11.2025, in proceedings u/s 147 of the Income Tax Act, 1961 (in short “the Act”).
2. Heard both the parties at length. Case file perused.
3. It emerges at the outset that there arises the first and foremost issue of validity of section 148 proceedings herein between the parties wherein the learned Assessing Officer had issued his corresponding notice dated 13.07.2022 for assessment year 2017-18 in question i.e. beyond the prescribed period of three years from the end of the relevant assessment year after getting approval of the PCIT, Rohtak only. This being the clinching factual position, the assessee has quoted hon’ble jurisdictional high court’s decision that in such an instance, the necessary sanction could not be obtained from the PCIT as the facts herein, in light of Communist Party of India (M) Vs. ITO, (2025) 174 taxmann.com 925 (Del.) deciding the very issue against the department as follows:
“7. The learned AO was not persuaded with the explanation provided by the petitioner and passed an order dated 29.07.2022 under Section 148A(d) of the Act, holding that it was a fit case for reopening the assessment proceedings under Section 147/148 of the Act. The said order was issued with the approval of the Commissioner of Income Tax (Exemption) [CIT(E)] on an assumption that the CIT(E) was a specified authority under the provisions of Section 151 of the Act.
8. The AO issued a notice dated 29.07.2022 under Section 148 of the Act accompanied with the order dated 29.07.2022 passed under Section 148A(d) of the Act. It is the petitioner’s case that the said notice is barred by limitation.
9. It is material to note that the original notice under Section 148 of the Act [deemed to be a show cause notice under Section 148A(b) of the Act in terms of the decision in the case of Union of India & Ors. v. Ashish Agarwal (supra)] was issued on 28.06.2021, that is, two days prior to the expiry of the limitation period as extended by virtue of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 [TOLA]. Thus, the AO had two days to issue the notice under Section 148 of the Act after receiving the reply dated 08.06.2022 filed by the petitioner. Since the said period was less than seven days, the AO had, by virtue of the fourth proviso to Section 149(1) of the Act, seven days to pass an order under Section 148A(d) of the Act (which was necessarily required to accompany a notice under Section 148 of the Act). The said period expired on 16.06.2022. Therefore, the order passed under Section 148A(d) of the Act was beyond the period of limitation.
10. The impugned notice is also liable to be set aside on the ground that it was issued without the approval of the authority specified under Section 151 of the Act. Since the impugned notice was issued beyond the period of three years from the end of the relevant assessment year, thus, in terms of Section 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. The determination of the specified authority for grant of approval under Section 151 of the Act depends on whether the notice under Section 148 of the Act has been issued after the expiry of three years from the end of the relevant assessment year or within the said period.
11. Section 151 of the Act (as amended by the Finance Act, 2021) as in force on the date of issuance of notice read as under:
“151. Sanction for issue of notice.- Specified authority for the purposes of section 148 and section 148A shall be,-
(i) Principa
