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Judgment
ORDER
PER SUDHIR KUMAR, JUDICIAL MEMBER:
This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “NFAC”] vide order dated 28.11.2025 pertaining to A.Y. 2017-18 arising out the assessment order dated 13.04.2023 u/s.147r.w.s.144B of the Income-tax Act, 1961, (in short ‘the Act’).
The assessee has raised the ground no, 2 on the approval which is as under:
2.That the order passed u/s 147 on 13-04-2023 as has ben upheld by Ld. CIT(A) on 28-11-25 become further non-est as also covered by M/s Twilight infrastructure (p) LTD vs. ITO (2024) S.C.C. online Delhi 330 because of granting approval/ section u/s 151 (1) by the Pr. CIT and not by Pr. CIT as contained u/s 151(ii) of the Act after 01-04-2021.
The brief facts of the case are that the assessee has filed his return of income for A.Y.2017-18 on 05-02-2018 declaring total income Rs.7,02,250/-. The assessee declared income from business amounting to Rs57,690/-, income from house property amounting to Rs7,84,000/- and income from other sources amounting to Rs10.560/-. In this case information available within the department that Shri Rajendra Kumar made cash deposit in the bank account amounting to Rs1,21,59,000/- in two banks account during the demonization period. Shri Rajendra Kumar expired on 17-02-2015 and after his death his wife Smt. Pooja Manchanda has been operate his business and bank account. During the demonization period Smt. Pooja Manchanda deposited the cash amounting to Rs1,18,96,000/- in the Account No. 200004184755 maintain in the name of M/s Satyam Furnishers and the deposit was transferred in her saving account no.100004258657. It has been found that Smt. Pooja Manchanda was transferred the amount in the account of Shri Purshotam Anand and he is actually beneficiary of the cash deposit. It was also noticed that Shri Purshotam Anand maintained a saving bank account in IndusInd Bank account no.100004130892. in which total credit entry was found amounting to Rs1,08,46,769/-. The assessee has not declared the credit entry in his return of income The case of the assessee was reopened u/s 147 of the Act and notice under section 148 of the Act was issued on 08-06-2021. The Assessing Officer completed the assessment after making the addition of Rs. 1,75,99,007/- under the section 56(2)(ix) and 69 A of the Act
Aggrieved the order of the AO the assessee filed the appeal before the Ld. CIT(A), who vide his order dated 28-11-2025 dismissed the appeal. Being aggrieved the order of the Ld. CIT(A) the assessee is in appeal before the Tribunal.
Ld. Counsel for the assessee has raised the legal ground no.1&2 and stated that first notice u/s 148 was issued on 08-06-2021 for the A.Y. 2017-18(paper Book page No.-2) under the old reassessment tax regime, however due to the introduction of new reassessment tax regime from 01-04-2021 and in the compliance of the Hon’ble Supreme Court Order in the case of Ashish Agarwal [2022] 444 ITR 1 SC, notice dated 04-05-2022 u/s 148A(b) of the Act was issued on 26-05-2022. The case of the assessee relates to the A.Y. 2017-18 and the first notice u/s 148 of the Act was issued on 08-06-2021 after obtaining the necessary satisfaction of the RANGE-49 Delhi and another notice in the compliance of the Hon’ble Supreme Court case Ashish Agarwal was issued on 26-05-2022 and notice dated 29-07-2022 under section 148 of the Act was issued obtaining the prior approval of the Pr. Commissioner of Income Tax Delhi after a period of three years from the end of relevant Assessment Year, the sanctioning authority as per the section 151(ii) of the Act should have been Principal Chief Commissioner or Principal Director General or Chief commissioner but in this case the approval has been obtained from the Pr. Commissioner Of Income Tax Delhi, which is not the competent authority to grant the permission. Reliance is placed the decision of TWYLIGHT Infrastructure Pvt Ltd v. Income Tax Officer Ward 253 Delhi & ors W.P.(C) 16524/2002 and others in this case the Hon’ble Delhi High Court held that:
12.1Clause(i) and (ii) of section 151 of the amended Act (Which has been extracted herein above) clearly specify the authority whose approval can trigger from the end reassessment proceedings, Thus if three (3) years or less have elapsed from the end of the relevant AY, the specified authority who would grant approval for initiation of reassessment proceedings will be the Principal Commissioner or Principal Director Or Commissioner or Director. However, if more than three (3) years from the end of the relevant AY have elapsed, the specified authority for according approval for reassessment shall be the Principal Chief Commissioner or Principal Director General or, where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General.
12.2That the approval is mandatory is plainly evident on perusal of the first proviso appended to section 148 of the Act, the said proviso at the risk of repetition reads as follows:
Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggest that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice………….”
12.3In these cases, there is no dispute that although three(3) years had elapsed from of the end of the relevant AY, the approval was sought from authorities specified in clause(i) as against clause(ii) of Section 151.
12.4Before us, the counsel for the revenue continue to hold this position. The only liberty that they seek is that if based on the judgement in Ganesh Dass Khanna, the impugned orders and notices are set aside, liberty be given to the revenue to commence reassessment proceedings afresh.
13.Therefore, having regard to the aforesaid the impugned notices and orders in each of the above -captioned writ petitions are quashed on the ground that there is no approval of the specified authority, as indicated in Section 151(ii) of the Act. The direction is issued with the caveat that the revenue will have liberty to take steps, if deemed necessary, albeit as per law.
14.Needless to add the rights and contentions of the both the sides will remain, in the event the revenue triggers reassessment proceedings.
15.The above-captioned writ petitions are disposed of, in the aforesaid terms.
16.Consequently, the pending applications shall stand closed.
This issue is squarely covered by the Judgement of Hon’ble Jurisdictional Delhi High Court in the case of Communist Party of India (Maxist) V. CIT(Ex) WP 9031/2023 dated 28-04-2025 and the case of Sampark Management Consultancy LLP v. DCIT, Circle -5(2) (1) Noida the Co-ordinate bench held as under: ITA NO. 6025 & 6026 /Del/2024 dated June 25,2025. In the case of Sampark Management Consultancy LLP v. DCIT, Circle -5(2) (1) Noida
We find that section 148 of the Act was substituted by the Finance Act, 2021 wet. 01.04.2021. Notice 14 of the Act as per the old provisions of section 148 of the Act applicable till 31.03.2021 should have been issued only upto 31.03.2021. The issue stands settled by the Hon'ble Supreme Court in Union of India vs Ashish Agarwal, 444 ITR 1 (SC) The assessee company was part of the litigations. The AO has issued notice u/s 148A(b) on 27.05.2022 and on 28.07.2021 order was passed u/s 148A(d) and issued notice is 148 of the Act on the same date, i.e, on 28.07.2022 in AY 2016-17 and while in AY 2017-18 on 27.07.2022 order was passed u/s 148A(d) and issued notice w/s 148 of the Act on 28.07.2022. This notice dated 28.07.2022 u/s 148 of the Act, available at page 14-15 of the paper book for AY 2016-17 and on pages 16-17 for PB for AY 2017-18, and same are shown to be issued after obtaining approval of Principal Commissioner of Income-tax, Noida. This approval is contrary to the provisions of section 151 of the Act as amended/substituted by the Finance Act, 2021 because, as per section 151 of the Act, if more than three years have lapsed from the end of the relevant assessment year, approval of Principal Chief Commissioner of Income-tax or Principal Director General or Chief Commissioner or Director General was required to be obtained. In the present assessment years, notices u/s 148 have been issued on 28.07.2022 after expiry of three years from the end of relevant assessment years. Accordingly, sanction/ approval of Principal Chief Commissioner of Income-tax or Principal Director General or Chief Commissioner or Director General was required to be obtained. Reliance in this regard is placed on the decision of the Hon'ble Supreme Court in Union of India vs. Rajeev Bansal, 2024 (10) TMI 264 SUPREME COURT) and various decisions. Thus, the approval is not sustainable under law. The grounds as raised deserves to be sustained. Consequently, the appeals of the assessee are allowed.”
The Ld. Sr. DR has relied the order of the lower authorities and submitted that the notice/ order was issued as per the directions of the Hon’ble Supreme Court in the case of Ashish Agarwal [2022] 444 ITR 1 SC. In the present case the notice was issued on 29-07-2022 for the A.Y. 2017-18 from the prior approval of the Pr. Commissioner, without, the approval of the authority specified u/s 151(ii) of the Act. The notice was issued beyond the period of three years from the end of the relevant assessment year, thus in term of section 151(ii) of the Act the sanction 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. Respectfully following the decision of the Hon’ble High Cort and the Co-ordinate Bench we allowed the appeal of the assessee and quashed the assessment order dated 13-04-2023.
We allowed the appeal of the assessee on legal ground the other grounds have become academic and keep them open for adjudication.
In the result the appeal of the assessee is allowed.