Rajesh Bansal vs Commissioner of Income Tax (Appeals)-27

Headnote:(A) Income-tax Act, 1961 - Sections 143(3), 148, 148B - Search and seizure - Validity of assessment - Mandatory approval - Assessment framed under section 143(3) without following procedure under sections 148 and 148B is bad in law and without jurisdiction - Where search under section 132 is initiated on or after 01.04.2021, the Assessing Officer must issue notice under section 148 and obtain prior approval under section 148B before passing assessment order for the assessment year to which Explanation 2 to section 148 applies - Failure to comply renders the assessment void ab initio. (Paras 5-9)

(B) Interpretation of statutes - Special provision overrides general provision - Principle of generalia specialibus non derogant - Section 148 (as a special provision triggered by search information) must prevail over section 143 (general provision for regular scrutiny) - Where a search takes place, the Assessing Officer must act under section 148 rather than continue with a pending proceeding under section 143(3). (Paras 7, 8.1, 8.2)

(C) Assessment - Time limit for issuing notice under section 143(2) - Notice under section 143(2) cannot be issued after expiry of three months from the end of the financial year in which the return is furnished - In the present case, the original return for A.Y. 2022-23 was filed on 29.10.2022 and notice under section 143(2) was issued on 21.06.2023, which was beyond the prescribed time limit, rendering the assessment under section 143(3) unsustainable. (Para 8.1)

Facts of the case:
A search and seizure operation under section 132 was conducted on 03.08.2022 against the assessees. For Assessment Year 2022-23 (the year immediately preceding the year of search), the Assessing Officer issued notice under section 143(2) on 12.06.2023 and completed the assessment under section 143(3) without issuing any notice under section 148 and without obtaining prior approval under section 148B. The assessees challenged the assessment orders before the Commissioner (Appeals), who partly allowed their appeals. The assessees and the Revenue appealed to the Tribunal.

Findings of Court:
The Tribunal held that for A.Y. 2022-23, the only permissible statutory course for the Assessing Officer was to issue notice under section 148 and complete the assessment after obtaining prior approval under section 148B. Since the Assessing Officer neither complied with section 148 nor section 148B, the assessment proceedings initiated and the assessment order passed were bad-in-law and without jurisdiction. The Tribunal relied on decisions of coordinate benches in Montage Enterprises Pvt. Ltd., Malbros International Pvt. Ltd., and Deepak Agarwal, which held that once a search is initiated, the assessment must be framed under the special provisions of section 148 and not under the general provisions of section 143(3).

Issues: The main issue was whether an assessment framed under section 143(3) for the assessment year immediately preceding the year of search, without following the procedure under sections 148 and 148B, is valid.

Ratio Decidendi: Where a search under section 132 is initiated on or after 01.04.2021, the Assessing Officer is mandatorily required to follow the procedure under section 148 and obtain prior approval under section 148B before passing an assessment order for the assessment year to which Explanation 2 to section 148 applies. Failure to do so renders the assessment bad-in-law and without jurisdiction. The special provisions under section 148 override the general provisions of section 143(3).

Result: Assessees' appeals allowed; Revenue's appeal dismissed as infructuous.

Legal Category Hierarchy

1. Assessments for AY 2022-23 completed under section 143(3) after search without complying with sections 148/148B challenged as invalid. (Para 1 , 2 )

2. Assessee argued assessment invalid for non-compliance with sections 148/148B; Revenue supported assessment as per law. (Para 3 , 4 )

3. Tribunal quashed the assessment orders, allowed assessee appeals, and dismissed revenue appeal as infructuous. (Para 9 , 10 )

4. After a search under section 132, can the assessing officer complete an assessment under section 143(3) without complying with sections 148 and 148B?

No. For the assessment year immediately preceding the year of search, the AO must issue notice under section 148 and obtain prior approval under section 148B before passing the assessment order. (Para 5 , 6 , 7 , 8 )

5. What is the consequence of failing to obtain prior approval under section 148B for an assessment order?

The assessment order is bad in law and without jurisdiction, and is liable to be quashed. (Para 7 , 8 , 9 )

6. Does the special provision for search-related assessments under section 148 override the general scrutiny provision under section 143?

Yes, under the principle generalia specialibus non derogant, the special provision prevails and the AO cannot continue parallel proceedings under section 143(3) after a search. (Para 8 )

PER YOGESH KUMAR, U.S. JM:

The Assessee Rajesh Bansal has challenged the order of the Ld. CIT(A) dated 29/08/2025 passed by the Commissioner of Income Tax (Appeals)-27, and the Assessee namely Malwa Packaging and also the Revenue have assailed the order of the Ld. CIT(A) dated 26/08/2025 pertaining to Assessment Year 2022-23. Since, identical questions to be decided in the captioned appeals, the above Appeals are taken up together and the parties have made respective arguments.

2. Brief facts of the case are that, a search and seizure operation conducted u/s 132 of the Act on 03/08/2022 against the Assessees and an assessment order came to be passed u/s 143(3) of the Act against Rajesh Bansal (Appellate No. 1herein) and an assessment order dated 31/03/2024 also came to be passed u/s 143(3) of the Act against Malwa Packaging (Appellate No. 1 herein) by making certain additions. Aggrieved by the above said assessment orders Assessees have preferred appeals before the Ld. CIT(A). The Ld. CIT(A) vide order dated 29/08/2025, partly allowed the appeals of the Assessees. As against the orders of the Ld. CIT(A)dated 29/08/2025, Assessee’s have preferred Appeal in ITA No. 6115/Del/2025 and 5756/Del/2025 respectively. The Revenue has filed Appeal in the case of Malwa Packaging in ITA No. 7586/Del/2025 by challenging the order of the Ld. CIT(A) dated 26/08/2025.

3. The Ld. Counsel for the Assessee vehemently submitted that the assessment framed u/s 143(3) is bad in law as mandatory approval u/s 148B of the Act has not been obtained. The Ld. Counsel for the Assessee further submitted that the Assessing Officer has neither complied with the provision of Section 148 of the Act nor the provisions of Section 148B of the Act. The Ld. Counsel by relying on plethora of judicial precedents sought for allowing the Appeals of the Assessee and dismissal of the appeal of the Revenue.

4. Per contra, the Ld. Departmental Representative submitted that the assessments have been framed in accordance with law and an additions have been made based on the merits, which requires no interference at the hands of the Tribunal, thus, sought for dismissal of the Appeal.

5. We have heard both the parties and perused the material available on record. In the present case search u/s 132 of the Act was conducted on 03.08.2022 i.e. F.Y. 2022-23 relevant to A.Y. 2023-24. The A.Y. 2022- 23 is the year immediately preceding the year of search. For the year under consideration the assessing officer has issued notice u/s 143(2) on 12/06/2023 and completed the assessment u/s 143(3) of the Act. However, the Ld. A.O. has not complied with the provisions of section 148/148B of the Act. For the year under consideration i.e., A.Y. 2022- 23 the assessing officer was mandatorily required to follow the procedures as per section 148 of the Act for initiating the assessment proceedings and shall pass the assessment order after obtaining approval of specified authority under section 148B of the Act. It is not in dispute that the assessing officer has neither complied with the provisions of section 148 of the Act nor the provisions of section 148B of the Act. For the sake of ready reference, provisions of Explanation 2 to section 148B of the Act is reproduced as under: -

-“ Explanation 2. For the purposes of this section, where,

(1) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or

(ii)a survey is conducted under section 133A, other than under sub- section (2A) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or

(iii)the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 20

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2026 Supreme(Online)(ITAT) 13289

INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH)
Yogesh Kumar, JM
Rajesh Bansal – Appellant
Versus
Commissioner of Income Tax (Appeals)-27 – Respondent
ITA No. 6115/Del/2025 | ITA No. 5756/Del/2025 | ITA No. 7586/Del/2025

For assessment years immediately preceding a search under section 132, the Assessing Officer must follow sections 148 and 148B; failure to do so renders an assessment under section 143(3) void ab initio.

Legal Category Hierarchy

Table of Contents

4. After a search under section 132, can the assessing officer complete an assessment under section 143(3) without complying with sections 148 and 148B?

5. What is the consequence of failing to obtain prior approval under section 148B for an assessment order?

6. Does the special provision for search-related assessments under section 148 override the general scrutiny provision under section 143?

2026 Supreme(Online)(ITAT) 13289

INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH)Yogesh Kumar, JMRajesh Bansal – AppellantVersusCommissioner of Income Tax (Appeals)-27 – RespondentITA No. 6115/Del/2025 | ITA No. 5756/Del/2025 | ITA No. 7586/Del/2025

For assessment years immediately preceding a search under section 132, the Assessing Officer must follow sections 148 and 148B; failure to do so renders an assessment under section 143(3) void ab initio.

Legal Category Hierarchy

Table of Contents

4. After a search under section 132, can the assessing officer complete an assessment under section 143(3) without complying with sections 148 and 148B?

5. What is the consequence of failing to obtain prior approval under section 148B for an assessment order?

6. Does the special provision for search-related assessments under section 148 override the general scrutiny provision under section 143?

Cases Referred (1)

INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH)
Yogesh Kumar, JM
Rajesh Bansal – Appellant
Versus
Commissioner of Income Tax (Appeals)-27 – Respondent
ITA No. 6115/Del/2025 | ITA No. 5756/Del/2025 | ITA No. 7586/Del/2025