An assessment order passed under Section 147 of the Income Tax Act, 1961 is without jurisdiction if the mandatory approval from the specified authority under Section 151(ii) is not obtained when the escaped income exceeds Rs. 50 lakhs and more than three years have elapsed.

ORDER

The Petitioner is before this Court against the Order dated 24.05.2023 passed under Section 144B read with Section 147 of the Income Tax Act, 1961 for the Assessment Year 2017-2018. This was in the light of fresh Notice dated 29.07.2022 issued under Section 148 of the Income Tax Act, 1961 under the new regime as in force with effect from 01.04.2021.

Earlier Section 148 Notice dated 30.06.2021 was issued to the Petitioner under the old regime as in force till 31.03.2021. However, in the light of the decision of the Hon’ble Supreme Court in Union of India and others Vs. Ashish Agarwal , 2022 SCC Online SC 543 vide Order dated 04.05.2022, a Notice dated 25.05.2022 was issued under Section 148A(b) of the Income Tax Act, 1961 which has culminated in issuance of Section 148 Notice dated 29.07.2022 under the new regime.

In Paragraph 28.1, the Hon’ble Supreme Court in Ashish Agarwal case (cited supra) had held that the Notice issued under the old regime shall be construed/treated as a Show Cause Notice under Section 148A(b) of the Income Tax Act, 1961 with effect from 01.04.2021.

Thus, Section 148 Notices issued between April, 2021 and 30 June 2021 under the old regime as in force till 31.03.2021 are deemed to have been issued under Section 148A(b) of the Act under the new regime with effect from 01.04.2021.

The Section 148 Notice dated 29.07.2022 was issued with the approval of Principal Commissioner of Income Tax. As per Section 151(ii) of the Income Tax Act, 1961 as in force with effect from 01.04.2021, the approval had to be obtained from the Principal Chief Commissioner of Income Tax if the income alleged to have escaped assessment is more than Rs.50,00,000/-.

In the present case, the income that has allegedly escaped assessment is Rs.1,11,40,572/- for the Assessment Year 2017-2018.

Section 151 of the Income Tax Act, 1961 as in force with effect from 01.04.2021 reads as under:-

“151. Specified authority for the purposes of section 148 and section 148A shall be,

(i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year;

(ii) Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year.

For the purpose of issuing Notice under Section 148 of the Income Tax Act, 1961 under the new regime and for the sake of understanding the specified authority, this Court in D. Tamilselvi and another Vs. The Income Tax Officer, Virudhunagar and others in W.P(MD) Nos.30938 of 2024 etc., batch vide order dated 15.09.2025 simplified the name of the specified authority as under:-

This Court in D.Tamilselvi’s case (referred to supra) in W.P(MD) Nos.30938 of 2024 etc., batch after analyzing Paragraph No.28 of the decision of the Hon’ble Supreme Court in Ashish Agarwal Case (cited supra) and Section 151 of the Income Tax Act, 1961 as in force with effect from 01.04.2021, observed as under:-

“88. As far as the Assessment Year 2017-2018 which is subject matter of W.P.No.30940 of 2024 is concerned, the amount of tax that had escaped assessment is Rs.1,64,53,850/-. Thus, the case would fall both under 3 years limitation and 6 years limitation for issuance of notice under Section 148 of the Act. It is noticed that approval had been obtained only from the Principal Commissioner of Income Tax under Section 151(1) of the Act.

89. Since