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Judgment
PER MANISH AGARWAL, AM:
These four appeals are filed by the Assessee are against the separate orders of Learned Commissioner of Income Tax (Appeals) National Faceless Appeal Centre (NFAC), Delhi (‘the CIT(A)’ in short) which are tabulated as under:
| Sr. No. | ITA Nos. | Asstt. Years | CIT(A)’s Order dated | Assessment Order dated | Assessment Order/Penalty Order under section |
|---|---|---|---|---|---|
| 1 | 7108/Del/2025 | 2017-18 | 29.08.2025 | 25.05.2023 | 147 r.w.s 144 read with section 144B of the of the IT Act. |
| 2. | 7109/Del/2025 | -Do- | 30.09.2025 | 25.11.2024 | 272A(2)(d) of the IT Act. |
| 3. | 7110/Del/2025 | -Do- | 09.10.2025 | 29.03.2021 | 271AAC(1) of the IT Act. |
| 4. | 7111/Del/2025 | -Do- | 30.09.2025 | 09.01.2024 | 270A of the IT Act. |
ITA No.7108/Del/2025 is filed by the assessee against order passed u/s 147/144 of the Act for Assessment Year 2017-18, thus, it is taken first for consideration.
The assessee is an individual and did not file his return of income for the year under appeal. An information was received that during the period of demonetization assessee has deposited Rs.2,40,00,000/- in bank account and further received commission of Rs.35,00,000/- for depositing SBN of others in his bank accounts. Therefore, proceedings u/s 147 were initiated after recording reasons. Thereafter, the assessment was completed u/s 147 r.w.s 144 read with section 144B of the Act dated 25.05.2023 wherein the total income of the assessee was assessed at Rs.3,41,72,950/-.
Against the said order, the assessee preferred an appeal before the Ld. CIT(A) who dismissed the appeal for non-prosecution. Therefore, the assessee is in appeal before the Tribunal wherein following grounds of appeal were taken by the assessee.
“1.That the proceedings U/s. 147/148A are without jurisdiction and bad in law.
2.That the impugned notice U/s. 148A(d)/148 is barred by limitation.
3.That the impugned notice U/s. 148 is bad in law as it is issued without DIN.
4.That under the facts and circumstances of the case, approval obtained U/s. 151 was mechanical, without application of mind and was invalid under the law.
5.That in the absence of prior approval as required u/s. 151, the whole proceedings are without jurisdiction.
6.That under the facts and circumstances of the case, both the lower authorities erred in not providing reasonable opportunity of hearing.
7.That under the facts and circumstances of the case, the Ld. AO erred in law in not providing the information on the basis of which re-asstt. proceedings has been initiated which is in violation of Hon'ble Supreme Court Direction in Civil appeal No. 3005/2022 dtd. 04.05.2022.
8.That under the facts and circumstances of the case, the impugned asstt. order is bad in law for non-service of statutory notice U/s. 148A/148.
9.That under the facts and circumstances of the case both lower authorities erred in law in making and sustaining addition of Rs. 3,01,97,700/- U/s. 69A as unexplained cash money.
10.That under the facts and circumstances, the Ld. AO erred in law as well as on merits in taxing the amount of Rs. 3,01,97,700/-U/s. 115BBE.
11.That under the facts and circumstances of the case both lower authorities erred in law in making and sustaining addition of Rs. 35,00,000/- as income from other sources.
12.That the Ld. AO erred in law as well as on merits in making addition of Rs. 4,75,250/-without specifying any basis.
13.That under the facts and circumstances of the case, no interest U/s. 234A and 234B should have been charged. In any, case the calculation are excessive.”
Since, grounds of appeal No.4 & 5 are with respect to the approval given u/s 151 by the authority which is not the prescribed authority for granting the approval for reopening the case , therefore, these grounds are taken first.
Heard the parties and perused the materials available on record. From the perusal of the order passed u/s 148A(d) of the Act dated 12.07.2022, it is observed that the said order is passed by obtaining prior approval of Principal Commissioner of Income Tax-15, Delhi and thereafter, notice u/s 148 was issued on 12.07.2022 obtaining prior approval of PCIT on 11.07.2022. In the instant case, initial notice u/s 148 was issued on 28.06.2021 and in terms of the judgment of Hon’ble Supreme Court in the case of Union of India vs. Ashis Agarwal reported in 444ITR 1, it was held that the said notice be treated as the notice u/s 148A(b) of the Act and thereafter, the proceedings u/s 148A of the Act as provided by Finance Act, 2021 should be completed and then notice u/s 148A could be issued.
In the instant case, as per the amended provisions as contended in section 151 of the Act, the case of the assessee is reopened after the expiry of three years from the end of the relevant Assessment Year and thus, in accordance with provisions of sub-section 2 of section 151 of the Act, approval from Principal Chief Commissioner of Income-tax or Principal Director General or Chief Commissioner or Director General is mandatorily to be obtained before the issue of notice u/s 148 of the Act. The Hon’ble Supreme Court in Union of India vs. Rajeev Bansal, [2024] 469 ITR 46 (SC) has made it very clear. The hon’ble jurisdictional high court in the case of Communist Party of India (Marxist) vs. CIT Exmpt. reported in (2025) 174 Taxmann.com925 (Delhi) has dealt this issue and held as under:
“10.The impugned notice is also liable to be set aside on the ground that it was issued without the approval of the authority specified under Section 151 of the Act. Since the impugned notice was issued beyond the period of three years from the end of the relevant assessment year, thus, in terms of Section 151(ii) of the Act, the same was required to be approved by the Principal Chief Commissioner or Principal Director General or where there is no such authority, by Chief Commissioner or Director General. The determination of the specified authority for grant of approval under Section 151 of the Act depends on whether the notice under Section 148 of the Act has been issued after the expiry of three years from the end of the relevant assessment year or within the said period."
In the instant case, admittedly, the notice u/s 148 and the order u/s 148A(d) of the Act were issued after obtaining the approval of PCIT, Delhi-15, therefore, such approval is not in accordance with the provisions of section 151(2) of the Act and, therefore is not a valid approval and, accordingly, the notice issued u/s 148 based on such invalid approval is bad in law and consequent order passed u/s 147 is hereby quashed. Since, we have allowed the assessee’s legal grounds No.4 & 5 and, therefore, other grounds taken on merits and other issues are not adjudicated.
Now, coming to ITA No.7109/Del/2025 against the order passed u/s 272A(1) (d) of the Act, ITA No.7110/Del/2025 filed against order passed u/s 271AAC(1) of the Act and ITA No.7111/Del/2025 against the order passed u/s 270A of the Act. Since, we have already quashed the reassessment order passed u/s 147 r.w.s 144 of the Act dated 25.05.2023 where the satisfaction for initiation of penalty proceedings u/s 272A(1)(d), 271AAC and 270A of the Act was recorded. Since, the very basis of the order is quashed, the consequent penalty proceedings initiated vide said order has no legs to stand and, accordingly, the consequent orders passed levied penalty u/s 272A(1)(d), u/s 271AAC and u/s 270A of the Act are invalid and thus quashed. All the three appeals filed by the assessee are allowed.
In the result, these four appeals of the assessee are allowed.