Vinsan Credit and Securities Limited vs DCIT Circle 25(1)

PER BRAJESH KUMAR SINGH, AM,

This appeal by the Assessee is directed against the order dated 20.11.2025 of ld. Commissioner of Income Tax, Appeal, NFAC (Delhi) [hereinafter referred to as the ‘Ld. CIT(A)] arising out of the order dated 30.05.2023 passed under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as the ‘the Act’) passed by the assessment unit, pertaining to Assessment Year (AY) 2017-18.

At the outset, the ld AR referring to the ground no. 1 of the appeal submitted that the order passed by the NFAC is not valid since the initiation of proceedings vide notice u/s 148 of the Act was barred by limitation in view of the order of the Hon’ble Supreme Court of India in the case of Union of India vs. Rajeev Bansal(2024) 167 taxmann.com 70. The said ground no. 1 of the appeal of the assessee is reproduced as under:

On the other hand, the Sr. DR supported the orders of the authorities below.

We have heard both the parties and perused the material on record. Having regard to the fact that ground no. 1 of the appeal relates to the jurisdictional ground, it was heard at the threshold and we have decided to proceed with the same at the initial stage itself. In this case, the notice under Section 148 of the Act was initially issued on 30.06.2021 which was deemed to have been the notice under Section 148A(b) of the Act. The procedure laid down by the Hon’ble Apex Court in the case of Union of India vs. Rajeev Bansal (supra) needs to be applied in the following manner:-

Considering the notice under Section 148 dated 30.06.2021 the surviving time available between the period till 30.06.2021 was, 01 day. Apart from that, the period from 01.06.2022 to 29.06.2022 is to be excluded as the assessee filed its response on 29.06.2022, against the subsequent notice dated 01.06.2022 issued by the AO under Section 148A(b) of the Act in compliance with the order passed by the Hon’ble Apex Court as above. The last date, i.e., the limitation period to issue notice under Section 148 of the Act by taking into account 01 day of surviving time comes to 30.06.2022. As in the case in hand, the notice under Section 148 of the Act was issued on 29.07.2022, the same is found to be barred by limitation and, therefore, liable to be quashed as submitted by the Ld. AR is found to be acceptable. In this regard, the Ld. AR relied upon very many judgements passed by the Hon’ble Delhi High Court and by the Coordinate Benches.

Under the facts and circumstances of the matter, assumption of jurisdiction by the Ld. AO under Section 148 of the Act is found to be bad in law and, thus, not sustainable. It is relevant to mention that this particular aspect of the matter has not been controverted by the Ld. DR. Thus, with the aforesaid observation, the entire assessment proceedings are found to be void ab initio and, therefore, quashed.

Further, undisputedly, assessment in the case of assessee for A.Y. 2017-18 has been reopened beyond the period of three years from the end of the relevant assessment year. Notice u/s.148 of the Act was issued to the assessee on 29.07.2022 after obtaining prior approval of the PCIT. The provisions of section 151 of the Act are unambiguous in so far as the specified authority from whom approval has to be obtained for the purpose of sections 148 and 148A of the Act is concerned. Where notice u/s 148 of the Act is issued after elapse of more than three years from the relevant assessment year, the AO was required to obtain approval from the PCCIT or CCIT. It is evident from the records that the AO has not taken prior approval from the competent authority in the present case, thus making the notice defective. Any proceedings arising from defective notice issued u/s 148 of the Act are non-est and are without jurisdiction. Thus, in light of the facts of case and the provisions of section 151 of the Act as they were applicable at the time when notice u/s 148 of the Act was issued, the reassessment proceedings are invalid, hence, quashed.

Therefore, in this case both the above jurisdictional challenges made by the assessee are found acceptable by us and since the assessment in this case has been quashed, the other grounds of appeal on merits become academic and are left open in this case.

In the result, appeal of the assessee is allowed.