Vishesh Developers Pvt Ltd vs Assistant Commissioner Of Income Tax

PER VIKAS AWASTHY, JUDICIAL MEMBER:

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short 'the CIT(A)'] dated 16.10.2025, for Assessment Year 2019-20.

Shri Mani Bhadra Jain, appearing on behalf of the assessee submits that the Assessing Officer (AO) reopened the assessment and issued notice u/s 148 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') beyond the period of three years. He submits that where the assessment is reopened beyond the period of three years, sanction for issuance of notice u/s.148 of the Act has to be obtained from the Principal Chief Commissioner (PCCIT) or Chief Commissioner of Income Tax (CCIT). Without prejudice, the ld. Counsel made alternate prayer. Referring to the approval u/s 151 of the Act dated 12.04.2023 at pages 32 and 33 of the paper book, the ld. Counsel submits that while granting approval u/s 151 of the Act, in Row No. 9, the Principal Commissioner of Income Tax (PCIT) records that the time limit for the current proceedings is covered, “u/s. 149(1)(b) of the Act, i.e., more than three years but not more than ten years”. Even if it is accepted that notice u/s.148A(b) of the Act is issued within three years and approval is by the Competent Authority under the Act, the manner in which PCIT has sanctioned approval is itself testimony to the fact that the same has been accorded in mechanical manner without application of mind by the PCIT. To buttress his submissions, the ld. Counsel placed reliance on judgment of the Hon’ble Bombay High Court in the case of ITO v. Nikhil Chandrakant Dharia, 168 taxmann.com 40 to contend that where approval u/s 151 of the Act has been granted in a mechanical manner without application of mind, the notice issued for reopening is liable to be set aside. He further submits that the Hon’ble Supreme Court of India in appeal by the Revenue ITO vs. Nikhil Chandrakant Dharia, 168 taxmann.com 41 dismissed appeal of Revenue.

Per contra, Shri Manoj Kumar, representing the Department strongly supported the impugned order and submits that the approval u/s 151 of the Act has been granted by the competent authority.

Both sides heard, orders of the lower authorities examined. For reopening of Assessment Year 2019-20, notice u/s 148 of the Act was issued to the assessee on 12.04.2023. The notice issued u/s 148 of the Act is visibly issued beyond the period of three years from the end of relevant assessment year. As is evident from the copy of approval dated 12.04.2023 available at pages 32 and 33 of the paper book, the approval u/s 151 of the Act for reopening the assessment was accorded by the PCIT. In Row No. 9 of the approval, the PCIT records that the time limit for the current proceedings is covered u/s 149(1)(b) of the Act, i.e., more than three years but not more than ten years. Thus, the PCIT is accepting that reopening is after three years and still proceeded to grant approval for issuance of notice in contravention of the provisions of section 151 of the Act. The provisions of section 151 of the Act, as applicable at the relevant point of time, unambiguously provide that where more than three years have elapsed from the end of the relevant assessment year, sanction for issuance of notice has to be obtained from the PCCIT or Principal Director General or Chief Commissioner or Director General. Thus, in light of the material available on record, I am of considered view that the sanction for issuance of notice u/s 148 of the Act is not in accordance with the provisions of section 151 of the Act. Hence, the sanction is invalid. As a sequitur, the notice issued u/s 148 of the Act and the subsequent proceedings arising therefrom are without jurisdiction. Therefore, the notice issued u/s 148 of the Act and the assessment made pursuant thereto are quashed being void ab initio.

In the result, appeal of the assessee is allowed.

Order pronounced under Rule 34(4) of Income Tax (Appellate Tribunal) Rules, 1963 on Friday the 19^th day of June, 2026.