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Judgment
PER S.RIFAUR RAHMAN,AM:
This appeal is filed by the assessee against the order passed by the ld. Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [for short ‘ld. CIT (A)] dated 17.02.2026 for the Assessment Year 2016-17.
At the outset of the hearing, ld. AR for the assessee submitted that assessee has filed additional grounds of appeal and it is purely legal issue and the same is reproduced below :-
“1.That on the facts and circumstances of the case, the approval accorded under section 151 of the Act is by wrong authority, mechanical and arbitrary, without there being any application of mind. Further, even the initiation of reassessment proceedings under section 148 read with section 149 of the Act are without satisfying the statutory preconditions of the Act are without satisfying the statutory preconditions of the Act and as such, the assessment so framed is null and void and deserves to be quashed.
2.That on the facts and circumstances of the case, the assessment so framed is illegal and without jurisdiction, as the instant proceedings have been initiated and finalized by jurisdictional assessing officer (JAO) instated of faceless assessing officer (FAO).?
Since the above grounds of appeal are purely legal, do not require fresh facts to be investigated and go to the root of the matter, ld. AR of the assessee prayed that the same may be admitted in view of the judgement of NTPC Ltd. vs. CIT, (1998) 229 ITR 0383 (SC).
On the other hand, ld. DR for the Revenue has no objection of admitting the additional ground of appeal being purely legal issue.
In view of the reliance made by the ld. AR for the assessee on the judgment of Hon’ble Supreme Court in the case of NTPC Ltd. (supra) and issue being purely legal, we proceeded to admit the additional ground of appeal being a legal issue.
At the time of hearing, ld. AR of the assessee specifically argued additional ground no.1 and submitted that the instant case is covered on the jurisdictional aspect i.e., no notice under section 148 of the Income-tax Act, 1961 (for short ‘the Act’) can be issued for AY 2016-17 without prior approval of the specified authority under the new regime in view of the judgement rendered by Hon’ble Supreme Court in the case of Union of India and Others vs. Rajeev Bansal [2024 SCC OnLine SC 2693. He submitted that the assumption of jurisdiction of the AO under section 147 of the Act could not be construed as valid when the approval under section 151 of the Act has been obtained from Learned Principal Commissioner of Income Tax (PCIT, Delhi - 10, New Delhi) instead of Learned Principal Chief Commissioner of Income Tax (PCCIT ). In this regard, he relied on various decisions of Hon’ble High Court and the Tribunal and specifically relied on the decision of Hon’ble Delhi High Court in the case of Kids Dream International Private Limited vs ACIT in WP(C ) 2814/2023 dated 24.02.2025. Accordingly, he prayed that the reassessment proceedings may be quashed and the appeal be allowed.
On the other hand, ld. DR of the Revenue relied on the findings of the lower authorities.
Considered the rival submissions and material placed on record. We observed that the additional ground raised by the assessee is as to whether the assumption of jurisdiction of the AO under section 147 of the Act could be construed as valid when the approval under section 151 of the Act has been obtained from Learned Principal Commissioner of Income Tax (PCIT, Delhi - 10, New Delhi) instead of Learned Principal Chief Commissioner of Income Tax (PCCIT ) .
We observed that the issue involved is reopening of assessment for the Assessment Year 2016-17. For this purpose, the AO obtained approval under section 151 of the Act from the Learned PCIT which fact is quite evident from the order passed under section 148 of the Act dated 22.07.2022. Since the reopening in the instant case has been made beyond 3 years from the end of the relevant assessment year, the specified sanctioning authority for the purposes of section 148 of the Act is Learned PCCIT. Since the approval in the instant case has been obtained from a wrong authority, the entire reassessment proceedings get vitiated. Reliance in this regard has been rightly placed by the Learned AR before us on the decision of the Hon’ble Jurisdictional Delhi High Court in the case of Kids Dream International Private Limited vs ACIT in W P (C ) 2814/2023 dated 24.02.2025 . The relevant operative portion of the said order is reproduced below:-
“2.As is evident from the above, the solitary question which was canvassed for our consideration was the issue of sanction as contemplated under section 151 of the Income Tax Act, 1961 [“Act”].
3.The reassessment action for Assessment Year [“AY”] 2017-18 came to be commenced immediately after a lapse of three years from the end of the relevant AY. It is in the aforesaid backdrop that Mr. Kantoor, learned counsel, had submitted that the said sanction accorded by the Principal Commissioner of Income Tax [“PCIT”] would not sustain.
4.We note that while dealing with the said question, we had in Abhinav Jindal H.U.F. v. Commissioner of Income Tax and Ors [2024 SCC OnLine Del 6585] duly enunciated the legal position which would obtain. We had ultimately in Abhinav Jindal held that the Taxation & Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 [“TOLA”] provisions would have no bearing on the identification of the competent authority under section 151 for according sanction.
5.In view of the aforesaid, and since undisputedly the facts of the present case the sanction was accorded only by the PCIT, the reassessment action would not sustain.
6.Accordingly and for all the aforesaid reasons, we allow the instant writ petition and quash the impugned order referable to section 148A(d) dated 30 July 2022 and notice under section 148 of even date.”
Respectfully following the aforesaid decision, the reassessment proceedings are hereby quashed and additional ground raised by the assessee is allowed.
Since the entire reassessment is quashed, the other grounds raised by the assessee both on law as well on facts need not be gone into and they are kept open.
In the result, the appeal filed by the assessee is allowed.