Reassessment notice under section 148 void ab initio if prior approval for section 148A(d) order obtained from Principal Commissioner instead of Principal Chief Commissioner when issued after three-year period from end of assessment year.

ORDER

PER SANDEEP SINGH KARHAIL, J.M.

The present appeal by the Revenue and cross-objection by the assessee has been filed against the impugned order dated 17/10/2025, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2017-18.

2. In its appeal, the Revenue has raised the following grounds: -

“(i) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A), NFAC has erred in deleting the addition made on account of unexplained cash deposits during the demonetization period without appreciating that the assessee had failed to discharge the statutory onus of explaining the nature and source of such deposits despite repeated opportunities?

(ii) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A), NFAC has erred in holding that the Assessing Officer was required to conclusively establish that the cash deposits constituted taxable Income, ignoring the settled position that the primary burden to explain the source of cash deposits lies upon the assessee as provisions of Section 69A of the Act?

(iii) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A), NFAC has erred in not appreciating that an audit report cannot substitute the requirement of furnishing documentary evidences explaining abnormal cash deposits made during the demonetization period, and that the failed to submit any cogent evidence or satisfactory explanation regarding the availability and source of cash in hand?

(iv) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A), NFAC has erred in holding that the Assessing Officer exceeded the scope of reassessment proceedings, without appreciating that it is held at Explanation to Section 147 of the Act once reassessment is validly initiated, the Assessing Officer may examine all issues which come to notice during the course of such proceedings?

(v) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A), NFAC has erred in deleting the addition made on account of unexplained unsecured loans ignoring the fact that the assessee failed to establish the identity, creditworthiness of the creditors and genuineness of the loan transactions as mandated under section 68 of the Act.

(vi) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A), NFAC has erred in deleting the disallowance of business expenses and interest without appreciating that the assessee failed to produce supporting bills, vouchers or documentary evidences to substantiate the genuineness of such expenses.

(vii) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A), NFAC has erred in ignoring the non-compliance by the assessee to notices issued u/s 142(1) of the Act and in deleting the additions without appreciating the adverse inference that arises from such non- compliance.”

3. While in its cross-objection, the assessee has raised the following grounds: -

1. That on the facts and circumstances of the case and in law, the Hon'ble CIT(A) has grossly erred in not adjudicating on the ground that the order issued u/s 148A(d) of the Act, was a non speaking order passed by the Ld. AO, thereby vitiating the principles of natural justice.

2. That on the facts and in law, the Hon'ble CIT(A) erre