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Judgment
PER MADHUMITA ROY, JM:
The instant appeal filed by the Assessee against the order dated 24.11.2026 passed by the National Faceless Appeal Centre/Ld. Commissioner of Income Tax (Appeals), New Delhi, (hereinafter referred to as ‘Ld. CIT(A)’) airing out of the Assessment Order dated 29.03.2022, passed by the NFAC[DEL-W-(37)(93)], New Delhi (hereinafter referred to as the "AO") passed under Section 144 r. w.s 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year 2015-16.
The assessee has raised ground inter alia that in the absence of a valid approval obtained under Section 151 of the Act initiation of proceedings under Section 148 of the Act and assessment framed under Section 147/144/144B of the Act are invalid and deserves to be quashed. Since, this very ground relates to the jurisdiction of the AO itself which goes to the root of the matter, we have decided to address the same at the very threshold as submitted by the Ld. Counsel, Shri Lalit Mohan.
The brief facts leading to this case is that the assessee has not filed its return of income for the year under consideration, however the assessee company sold an immovable property at a consideration for Rs.6,10,09,773/- on 11.11.2014. As per AIR information, reason, therefore, was recorded alleging escaping assessment in the case of the assessee in the year under consideration within the provisions of Section 147/148 of the Act and the case was, therefore, reopened under Section 147 of the Act upon obtaining necessary approvals from the competent authority specified under Section 151 of the Act as claimed by Revenue. The assessee’s counsel, Mr. Lalit Mohan joins issues here to this effect that in the present facts and circumstance of the matter, reopening of assessment since beyond four years from the end of the relevant assessment year, the approval under Section 151(1) of the Act ought to have been obtained from the Ld. PCIT but in the instant case as approval has been obtained from the Range Office, the same is not sustainable in the eyes of law, void-ab-initio and thus, the entire proceedings is liable to quashed. In this regard, he has drawn attention of the Bench at page-42 of the paper book filed before us which supports its contention of approval being obtained from Range-22, Delhi, and not from the Ld. PCIT as per provisions of Section 151(1) of the Act.
This factual and legal aspect as narrated hereinabove has not been able to be controverted by the Ld. DR.
Under these facts and circumstances of the matter, we have further considered the judgment relied upon by the Ld. AR passed by the Coordinate Bench in the case of Picasa Facility Management vs ACIT, Central Circle-2, New Delhi, in ITA No.103/Del/2024 for AY 2015-16, wherein, on the identical issue, the Co-ordinate Bench has been pleased to observe the following by quashing the assessment proceedings:
“..4. Appellant/assessee preferred present appeal. Appellant pleaded that Commissioner of Income Tax (Appeals) erred in not holding the assessment order as void ab initio against the settled law, when the proceedings under section 147/148 of the Income Tax Act, 1961 had not been validly initiated as no sanction was obtained under section 151 of the Income Tax Act, 1961 from the competent authority after four years from end of relevant assessment year.
5.Learned Assessee’s representative submitted that although more than four years had elapsed from the end of relevant assessment year the sanction for issuance of notice under section 148 was neither sought nor obtained from the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner of Income Tax who were the only authorities competent to grant approval as per provisions of section 151 of the Act. On contrary approval was sought and obtained from the Additional Commissioner of Income Tax, Range 34, Delhi (hereinafter referred to as the Addl. CIT). Learned AO issued notice dated 31.03.2021 under section 148 of the Act. The notice specifically records that it is being issued after obtaining necessary satisfaction. Hon’ble Bombay High Court in Writ Petition No. 1050 of 2022 in the case of JM Financial and Investment Consultancy vs. ACIT dated 4th April, 2022 has held as under:-
“In our view, since four years had expired from the end of the relevant assessment year as provided under section 151(1) of the Act, it is only the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner who could have accorded the approval and not the Additional Commissioner of Income Tax. On this ground alone, we will have to set aside the notice dated 31st March, 2021 issued under section 148 of the Act, which is impugned in this petition.” Hon’ble High Court of Bombay in the case of Sidhmicro Equities (P.) Ltd. vs. Deputy Commissioner of Income-tax (2023) 150 taxmann.com 460 (Bombay) had held in above terms. Abovesaid judgment of Hon’ble Bombay High Court was upheld by the Hon’ble Supreme Court. Therefore the appeal may be accepted.
6.Learned Departmental Representative submitted that the impugned orders are legal and sustainable.
7.From examination of records in light of aforesaid rival contentions it is crystal clear that notice dated 31.03.2021 under section 148 of the Income Tax Act, 1961 Assessment Year 2015- 16 mentioned “This notice is being issued after obtaining the necessary satisfaction of the RANGE 34, DELHI”. Since four years had expired from end of relevant assessment year 2015-16 as provided under section 151(1) of the Act, it is only the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner who could have accorded the approval and not the Additional Commissioner of Income Tax. As per the ratio of judgment in Writ Petition No. 1050 of 2022 in the case of J M Financial and Investment Consultancy Services Private Limited vs ACIT’s case (supra) it is well settled that “In our view, since four years had expired from the end of the relevant assessment year as provided under section 151(1) of the Act, it is only the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner who could have accorded the approval and not the Additional Commissioner of Income Tax. On this ground alone, we will have to set aside the notice dated 31st March, 2021 issued under section 148 of the Act, which is impugned in this petition.” In view of above material facts and well settled principle of law the impugned orders of Ld. Assessing Officer and Learned CIT(A) are not legal and deserves to be set aside.
8.No other point was argued.
9.In the result appeal of the assessee is allowed. Both the impugned orders of Learned Assessing Officer and Commissioner of Income Tax (Appeals) are set aside.”
Having heard the Ld. Counsels appearing for the parties and having regard to the facts and circumstances of the mater, since the approval has admittedly not been obtained from the Ld. PCIT as per the provisions of Section 151(1) of the Act as the reopening has been made beyond four years from the end of the relevant assessment year, we are inclined to accept the ground raised by the assessee and the submissions made by the Ld. AR in holding the entire assessment not sustainable as the same is based on the approval granted by an officer having no jurisdiction. Further, respectfully relying upon the judgment passed by the Co-ordinate Bench as aforesaid, we, therefore, find the assessment proceeding is not sustainable and therefore quashed.
All other grounds raised by the assessee become academic and no order needs to be passed.
In the result, the appeal of the assessee is allowed.