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Judgment
Per Raj Kumar Chauhan, Judicial Member:
The appeal o f the assessee is dir ected against the order dated 17.09.2025 of ld. C IT(A)/ NFAC passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) wherein the Assessment Order passed u/s 147 r.w.s. 144 of the Act dated 28.05 .2023 was set aside and the matter was restored to the file of the Assessing Officer for making a fresh assessment.
The facts in brief as culled out fro m para 3 of the impugned order are as under:
The assesse company filed its return of i nco me for t he ye ar under consi de ration on 11.10.2016. As per the informati on on Insi ght Portal , as sessee maintai ns a current account with Circul ar Roa d b ranch of Amri tsar Zone. The account was ope ned on 23.07.2014. The acco unt holder oc cupation is declared to be trader. The tur nover i n t he account duri ng the fi nancial year 2015-16 was Rs . 941.65 l acs de bit and Rs. 919.87 lacs credit of whic h the cash transac tions were Rs. 63.50 l acs de bit and Rs .18.73 lacs credit. During the current fi nancial ye ar 2016-17 the turnov er is Rs. 23.34 lacs debit and Rs.2.24 lacs c redit of whic h cash transac tions are Rs. 18.00 lacs debit and cr edit is nil. The pat tern of tr ansactions in the ac count is that credits are received thr ough R TGS and debits also thr ough R TGS or by cash withdrawals. Cash withdrawals are Rs. 9.00 lacs or less tha n that thus avoidi ng r eporting in the C TR .R TGS tr ansactions both debi t and credit appea r like routing tr ansaction without any economic rationale. Moreover we hav e also rec eived an enquiry about the account from Direct orat e of R evenue Intelligence (Headquarters) in res pect of fraudulent ex port of Flo or Coveri ng i n this acco unt.”. It is seen fr om per us al of the unde rlying informati on that the huge s uspicious transac tions without ec onomic rationale wer e appea ring in the ba nk account. It i s furthe r s een that Dir ectorate of Revenue Intelligence identified t he assessee c ompany involvement in fraudul ent export activiti es. The assessee booke d huge tr ansactions of s ale a nd purc hase duri ng the year . Further, In vi ew of underlying i nfor mati on i n possession wherei n assessee’s i nvolvement i n fraudul ent export activities as i dentified by Direc to rate of R evenue Int elligence, Notice U/s 148 was issued on 28.05.2021. Order U/s 147 r. w.s . 144 r.w.s. 1 44B of t he Act was pass ed on 28.05.2023 by making an addi tio n of Rs.91,16,550/-towards unexplai ned r ecei pts, R s. 1,00,03,235/- t owards unexplai ned expendit ure and Rs.72,92,446/- t owards r ej ecti on o f books of acco unts .”
Aggrieved by the impugned order, the assessee filed appeal before us and has raised the following grounds of appeal:
“1 . That t he CIT(A ) has er red i n re mandi ng back the mat ter to the AO wi thout adjudicating t he l egal grounds of a ppeal.
2.That the CIT(A) has erred i n no t appreciati ng that the re asons recor ded are bad i n law, sinc e, i nformati on is In res pect of fraudulent export whi le the assesse e was not i nvolved in any expo rt activiti es and as such, ther e is wrong assumpti on of facts.
3.That the CIT(A) has erred i n no t appreciati ng that the reaso ns r ecorded ar e bad i n law i n view of the fac t tha t t he re asons state about an e nquiry havi ng been rec eiv ed from Directorat e of Revenue Intelligenc e (Headquarters). That me re enquiry cannot be termed as reason for belief of escapement of i ncome whi ch ta ntamount t o borrowed satisfaction.
4.That the CIT(A) has erred i n no t appreciati ng that the notice iss ued U/S 148 issued on 11.07.2022 is bad in law si nc e t he ap proval has been obtai ne d from PCIT-1, Del hi while the same had t o be obtai ned from pri nci ple Chief Commissioner as the notice has be en i ssued aft er the lapse of 3 years i n view of the provisi ons o f s ection 151.That the subseque nt o rder passed u/s 148A(d) is also bad in law as the same has also been passed by without taki ng appro val of appro priate aut hority.
5.That the CIT(A) has erred i n no t appreciati ng that the ord er u/s 148A(d ) is bad i n l aw si nc e notice u/s 148A(b) was neit her rec eived by the appellant on e mail nor physically at the regis ter ed address.
6.That the CIT(A) has erred i n no t appreciati ng that the Ld. AO has erred i n sending t he notice u/s 133(6 ) to M/s HR I mpex in Karnataka havi ng PAN: AAHFS5014L whil e t he assessee was involved i n busi ness transacti ons with M/s HR Impex i n Pani pat havi ng PAN B PMPS1079D.
7.That the CIT(A) has erred i n no t appreciati ng that the addition made by the A O on account of transacti ons ent ered int o with HR Impex i n Pani pat (AAHFS5014L) by sendi ng notice u/s 133(6 ) to i nc orr ect pa rty without consideri ng the replies of the assessee i n which t he assessee had duly mentioned t he PA N and ad dress o f t he party.
8.That the appellant craves leave to a dd, amend and alter the grounds of appeal.”
We have heard the ld. AR and the ld. DR. At the very outset, the ld. AR submitted that the ld. CIT(A) vide impugned order dated 17.09.2025 has no t decided the legal issue raised in grounds as per Form 35 where in the assessee has raised the ground that proceeding initiated u/s 148 vide notice dated 01.06.2021 were bad in law since the approval obtained u/s 151 was bad in law and the subsequent no tice u/s 148 on 11.07.2022 was also bad in law. It is further argued that the approval was required to be obtained from PCCIT whereas the approval for issuing notice u/s 148 dated 11.07.2022 was obtained from PCIT-1, Delhi as placed at page 2 4 of the paper book wherein it is me ntioned in ‘column 3’, this notice is be ing issued after obtaining prior approval of PCIT-1, Delhi. It is further argued that the case is covered by the Union of India & Ors. Vs. Rajeev Bansal (2024) 469 ITR 46 (SC) as well as co-ordinate bench decisio n in the case of DC IT Vs. Rudra Buildwell Homes (P.) Ltd . (2025) 178 taxmann.com 55 (Del. Trib.). Thus, the o nly issue to be determined by us is w hether the notice u/s 148 is bad in law as the approval of the competent authorities is not obtained before issuing the notice.
In that regard, we have also heard the ld . DR who has relied upon the decision of the ld. lower authoritie s and did not submit anything regarding the approval being issued by incompe tent authorities i.e. PCIT in place of PCCIT.
We have considered the rival submissions and are examining the record.
We have heard the r ival submissio ns and perused the material placed on record. It is an admitted fact that where more than three years had e lapsed from e nd of relevant assessment year, sanctio n for r eopening was to be obtained from Principal Chief Commissio ner or Principal Director General or Chief Commissioner or Director General as per section 151(ii) of the Act. It is an admitted fact that in the instant case the approval was obtained u/s 151 of the Act from the PCIT-1, Delhi and no tice u/s 148 of the Act was issued on 11.07.2022, which demonstrates that notice date d 11.07.2022 u/s. 148 of the Act was issued without validly complying with section 151 o f the Act which is not in accordance with law and thus invalid, in view of the Hon’ble Apex Court decision in the case of Rajeev Bansal (supra) wherein it has been laid down as under:
“73.Section 151 impos es a c heck upon t he power of the Revenue to reope n assessment s. The provision impos es a res ponsibility on the R evenue to e nsur e that it obtains the sanction of t he s pecified authority before issuing a notice unde r section 148. The p urpose behi nd this proc edur al check is to save the assesses from harassment resul ting from t he mec hanical reopeni ng of assessments S ri kr ishna (P.) Ltd. v. ITO [1996] 87Tax man 315/221 ITR 538 (SC) /[1996] 9 SCC 534. A table repres enti ng the prescription under the old and new regim e is set out bel ow:
Regime Time li mits Speci fied author ity Secti on 151(2)of the old regime Before expiry of four years f rom the end of the rel evant assessment year Joi nt Commissioner Secti on 151(1)of the old regime Aft er expir y of four years f rom the end of the rel evant assessment year Pri ncipal Chi ef Commissi oner or Chi ef C ommissio ner or Pri ncipal Commissi oner or Commissi oner Secti on 151(i)of the new regime Thr ee years or less tha n three years from the end of the relevant assessment year Pri ncipal Commissi oner or Pri ncipal Direct or or Co mmissioner or Director Secti on 151(ii)of the new regime More than t hree ye ars have elaps ed from the end of the relevant assessment year Pri ncipal Chi ef Commissi oner or Pri ncipal Direct or General or Chi ef Commissi oner or Director Ge neral 74.The above tab le indicates that the specified authori ty is direc tly co-related to the ti me when the notice is issued. This pl ays out as follows under t he old regi me:
(i)If i nc ome escaping assessment was less t han Rupees one lakh: (a) a reassessment notic e could be issued under section 148 wi thin four ye ars a ft er obtai ning the ap proval of the Joi nt Commissi o ner; and (b) no notice co uld be i ssued after the expiry of four years; and
(ii)If i nco me escapi ng was more t han Rupees one lakh: (a) a reass essment notice co uld be i ssued withi n four years aft er obtai ni ng the approval of the Joi nt Commissioner ; a nd (b) after four years but wit hi n six years after obtai ni ng the approval of t he Pri ncipal Chief Commissioner or Chi ef Commissi o ner or Pri ncipal C ommissioner or Commissi o ner.
75.After 1 April 2021, the new regi me has specified different aut hori ties for granti ng sanc tions under section151. The new regi me is be neficial to the ass essee because it specifies a hi gher level of authority for t he grant of sancti ons in comparis on to t he ol d regime. Ther efore, i n t erms of As hi sh Agarwal (supra), aft er 1 April2021, the prior a pproval must be obtai ned from t he appr opriate aut horities specified under section 151 of t he new regi me. The effec t of S ec tio n 151 of the new re gi me is t hus:
(i)If i ncome escaping assessment i s less t han Rupees fift y lakhs: (a) a reasses sment notic e could be issued wit hi n thr ee years aft er obtai ni ng the prior approval of the Pri ncipal Commissi o ner, or Principal Di rector or Commissi o ner or Director; and (b) no notice could be issued aft er the expiry of thre e years; and
(ii)If i nc ome escaping assessment is mor e t han Rupees fift y lakhs: (a) a r eassessment notic e could be, issued withi n thr ee years aft er obtai ni ng the prior approval of the Pri ncipal Commissi o ner, or Principal Di rector or Commissi o ner o r Director ; and (b) after thr ee ye ars a ft er obtai ning the prior approval of t he Pri ncipal Chi e f Commissi oner or Principal Direct or General or Chi ef Commissio ner or Direct or General .”
In view of above factual matrix and respectfully following the aforesaid decisio ns, we hold that the notice issued u/ s 148 of the Act is bad in law and thus invalid, hence, the same is quashed and accordingly, the conseque nt assessment order is also quashed.
In the result, the appeal of the assessee is allowed.