TaxTMI 
TaxTMI 
2025 (7) TMI 1954
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....ated by this common order. We take facts and figures for ITA number 1112 for the purpose of discussion and decision herein below. The decision taken therein in appeal number ITA 1112 shall apply mutatis mutandis in ITA number 1113 also. 3. The short legal challenge raised by the appellant assessee through its additional ground of appeal is regarding unauthorized approval by specified authority qua issuance of notice u/s 148. It has been contended that in its case notice u/s 148 was issued after lapse of 3 years and therefore, within the meanings of Section 151(ii) of the Act specified authority to approve issuance of notice u/s 148 was Pr. CCIT. It was stated that in its notice u/s 148 for AY 2016-17 dated 15/07/2022 was issued with the prior approval of Pr. CIT- 10 Delhi and that therefore said notice was issued without requisite sanction of prescribed specified authority. It was contended that it is trite law that invalidity of notice per se would be consequentially fatal to the assessment order per se. The Ld council accordingly requested for quashing the assessment order whish has been sustained by the Ld CIT(A) . 4. Per contra the Ld DR would like to place reliance upon ....
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.... the stipulations made Section 151(i) &(ii) of the Act. Hon'ble Apex Court ruled that " ... grant of sanction by the appropriate authority is a pre-condition for the assessing officer to assume jurisdiction u/s 148 to issue a reassessment notice ........ it links up time limits with the jurisdiction of the authority to grant sanction. Section 151(ii) of the new regime prescribed higher level of authority if more than have elapsed from the end of the relevant assessment year. Thus, a noncompliance by the Assessing Office with the strict time limit prescribed u/s 151 affects their jurisdiction to issue a notice u/s 148 .... " 1. We have noted that a Hon'ble Bench of the Mumbai Tribunal in the case of Manish Financials (supra) has ruled as under: - "11. The assessee for the year under consideration filed the return of income declaring a loss of Rs. 3,37,77,313/-. The assessment was reopened by issue of notice under section 148 of the Act on 23.04.2021 and notice was deemed to be a notice issued under section 148A(b) as per the directions of the Hon'ble Supreme Court in the case Ashish Agrawal (supra). The AO issued a notice under section 148 dated 30.07.2....
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....ioner or Commissioner. (b) After 1 April 2021, the new regime has specified different authorities for granting sanctions under Section 151. The new regime is beneficial to the assessee because it specifies a higher level of authority for the grant of sanctions in comparison to the old regime. Therefore, in terms of Ashish Agarwal (supra), after 1 April 2021, the prior approval must be obtained from the appropriate authorities specified under Section 151 of the new regime. The effect of Section 151 of the new regime is thus: (i) If income escaping assessment is less than Rupees fifty lakhs: (a) a reassessment notice could be issued within three years after obtaining the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director; and (b) no notice could be issued after the expiry of three years; and (ii)If income escaping assessment is more than Rupees fifty lakhs: (a) a reassessment notice could be issued within three years after obtaining the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director; and (b) after three years after obtaining the prior approval of the Princ....
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.... the a sessing officer was required to obtain prior approval or sanction of the specified authorities at four stages: a. Section 148A(a) to conduct any enquiry, if required, with respect to the information which suggests that the income chargeable to tax has escaped assessment; b. Section 148A(b) - to provide an opportunity of hearing to the assessee by serving upon them a show cause notice as to why a notice under Section 148 should not be issued based on the information that suggests that income chargeable to tax has escaped assessment. It must be noted that this requirement has been deleted by the Finance Act 2022; c. Section 148A(d) - to pass an order deciding whether or not it is a fit case for issuing a notice under Section 148; and d. Section 148-to issue a reassessment notice. (g) In Ashish Agarwal (supra), this Court directed that Section 148 notices which were challenged before various High Courts "shall be deemed to have been issued under Section 148-A of the Income Tax Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of Section 148-A(b)." Further, this Court dispensed with....
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....of Ashish Agarwal (supra), for issue of notice under section 148A(a) and under section 148 on or after 1 April 2021, the prior approval should be obtained from the appropriate authorities specified under Section 151 of the new regime. The provisions of section 151 of the Act under the new regime read as under: Sanction for issue of notice. 151. Specified authority for the purposes of section 148 and section 148A shall be,- (i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year; (ii) Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year. 14. In assessee's case from the perusal of para 3 of the notice issued under section 148 for AY 2016-17 we notice that the same is issued with the prior approval of Pr.CIT-19 Mumbai accorded on 29.07.2022 vide reference No. Pr. Cit- 19/148/2022-23 and this fact is not contraven....
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....er which suggests 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: [Provided further that no such approval shall be required where the Assessing Officer, with the prior approval of the specified authority, has passed an order under clause (d) of section 148A to the effect that it is a fit case to issue a notice under this section.] Explanation 1 - For the purposes of this section and section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means,- (i) any information [ *** ] in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time; (ii) any audit objection to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act, or (iii) any information received under an agreement referred to in section 90 or section 90A of the Ac....
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..... At this juncture, it would be relevant to extract the provision of Section 151, which is as follows: "Specified authority for the purposes of Section 148 and Section 148A shall be :- (i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year; (ii) Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year." 9. A perusal of Section 151(i) would show that, the specified authority for the purpose of issuing notice under Section 148 within a period of three years from the end of the relevant assessment year is, the Principal Commissioner or Principal Director or Commissioner or Director. Further, in terms of provision of Section 149, three year time period is fixed for issuance of 148 notice, in the event of the amount is below 50 lakhs. In the present case, the amount involved is Rs. 3,65,09,748/-, which is more than 50 lakhs. 148 notice was issued on 25.07.2022, which is beyond the period of three years. So ....