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Judgment
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)/ National Faceless Appeal Centre (NFAC) [in short ‘CIT(A)’] dated 25.2.2026, for assessment year 2017-18.
Shri I.P. Bansal, appearing on behalf of assessee, at the outset submits that the reassessment proceedings initiated against the assessee are void as the notice issued u/s. 148 is time barred. Narrating facts, he submits that the first notice u/s. 148 for AY 2017-18 was issued on 28.6.2021 (at Page no. 19 of the Paper Book). Thereafter, notice u/s. 148A(b) was issued on 18.5.2022 (at Page Nos. 20-21 of the Paper Book) and the order u/s. 148A(d) was passed on 26.7.2022 (at Page nos. 22-24 of the Paper Book). Thereafter, second notice u/s. 148 after obtaining the approval of the PCIT was issued on 26.7.2022 (at Page Nos. 25-26 of the Paper Book). He submitted that in the first instance the notice u/s. 148 dated 28.6.2021 under old regime is time barred i.e. beyond the period of three years. Even, if the subsequent notice issued u/s. 148 is considered, the same is defective as the notice has been issued after obtaining the approval of the Principal Commissioner of Income Tax (PCIT) instead of Principal Chief Commissioner of Income Tax (PCCIT). In support of his submissions, he placed reliance on the decision of the Mumbai Bench of the Tribunal in the case of DCIT vs. Prasad Shetty [2025] 178 taxmann.com 148 to contend that assessment proceedings emanating from defective notice u/s. 148 of the Act i.e. notice beyond time and without seeking appropriate approval, is invalid.
Per contra, Shri Manoj Kumar, representing the department vehemently supported the impugned order. He prayed for dismissing appeal of the assessee.
Heard both sides. Orders of the authorities below examined. The limited issue for consideration in the instant appeal is validity of reopening of assessment. The assessee has alleged that reopening is without jurisdiction as the notice u/s. 148 of the Act is invalid. To decide the issue it is important to note the sequence of events. The dates and events are as under:-
| Date | Particulars |
| 28.06.2021 | Notice u/s. 148 for AY 2017-18 issued under pre amended law. |
| 18.05.2022 | Notice u/s. 148A(b) for escapement of income of Rs. 25,70,000/- granting time upto 02.06.2022. |
| 26.07.2022 | Order u/s. 1548A(d) was passed. At page 23 it is mentioned that assessee did not respond and there is no mention of any request for extension of the time sought by the assessee. |
| 26.07.2022 | Notice u/s. 148 was issued after obtaining approval of Pr. CIT, Dehradun on 25.7.2022. |
A bare perusal of the above table, would show that the reassessment proceedings were initiated by the AO after the elapse of three years. The notice initially issued u/s. 148 of the Act was under old regime. The said notice is certainly beyond the time. Even, if subsequent notice u/s. 148 is considered, the same has been issued after obtaining approval of the PCIT whereas as per the provisions of section 151 of the Act, if notice is issued after three years but before ten years from the relevant year, approval has to be taken from the PCCIT. Undisputedly, in the instant case the AO before issuing notice u/s. 148 of the Act dated 26.07.2022 has taken approval from the PCIT. This makes the notice defective. In light of the above facts, I find that notice u/s. 148 of the Act is invalid and reassessment proceedings emanating from invalid notice are vitiated, hence, liable to be quashed. I hold and direct accordingly.
In the result, appeal of the assessee is allowed.