TaxTMI 
TaxTMI 
2026 (3) TMI 1485
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....onveying his desire to reopen the assessment for AY 2018-19. Pursuant to which, assessee filed RoI on 25.01.2024 declaring Rs.3,32,650/-. The AO completed the assessment u/s. 147 of the Act assessing the income of the assessee total income at Rs. 56,71,398/-. Aggrieved, the assessee filed further appeal before the CIT(A), who dismissed the appeal. The assessee is in appeal before this Tribunal against the order of the Ld CIT(A). 3. The Ld. Authorized Representative (AR) of the assessee submitted that through ground No.3, the assessee is challenging the validity of notice u/s. 148 of the Act issued after expiry of three years with the approval of Principle Commissioner of Income Tax (PCIT), instead of Principle Chief Commissioner of Income Tax (PCCIT). The Ld. AR further submitted that if the said ground is adjudicated in favour of the assessee, the other grounds on legal as well as on merits would become academic. Accordingly, we will first proceed to consider the said legal contention. 4. In this regard, the Ld. AR submitted that the notice under section 148 is dated 13.04.2022, which event is undisputedly beyond the period of 3 years from the end of the relevant AY; and the....
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....ered by clause (ii) to Section 151 of the Act. 42. If the notice u/s. 148 of the Act / order u/s. 148A(d) of the Act is issued / passed within 3 years from the end of the relevant assessment year, the competent authority for the purpose of granting sanction in terms of Section 151 of the Act is either Principal Commissioner or Principal Director or Commissioner or Director, as the case may be. 43. On the other hand, if the same is issued / passed after the expiry of the 3 years from the end of the relevant A.Y., the competent authority in this regard should be Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General. 44. Now, let us examine the facts of the present case by keeping in mind the above legal position. The Show Cause Notice in terms of Section 148A(b) of the Act came to issue on 23.03.2022 after obtaining prior approval from the office of the PCIT, Madurai - 1 and thereafter the order in terms of Section 148A(d) of the Act came to be passed on 19.04.2022 along with the notice u/s. 148 of the Act being issued on the....
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....lapsed from the end of the relevant assessment year. It is further proposed to insert a proviso in the said section so as to provide that the period of three years for the purposes of clause (i) shall be computed after taking into account the period of limitation as excluded by the third or fourth or fifth provisos or extended by the sixth proviso to subsection (1) of section 149. These amendments will take effect from 1st April, 2023. 49. Thus, it is an irrefutable fact that the amendment brought in by Finance Act, 2023 in introducing the proviso to Section 151 of the Act by giving effect to the exclusion of time limit by operation of 3rd to 5th proviso to Section 149(1) of the Act would take effect only from 01.04.2023. 50. Hence, it can be said that the said amendment would not come to the rescue of the revenue on the facts of the present case in view of the fact that the notice u/s. 148 as well the order u/s. 148A(d) of the Act being issued / passed well prior to the introduction of the said amendment, i.e. on 19.04.2022. 51. Before us, the Ld.DR argued that the said amendment introduced by Finance Act, 2023 ought to be reckoned as c....
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....ct was issued upon the assessee herein only upon prior approval of the competent authority, PCIT, Madurai - 1. But whether this sanction would also be available / extended to the issuance of notice u/s. 148 of the Act / passing of the order u/s. 148A(d) of the Act by the AO by reckoning it was a fit case for issuance of such notice u/s. 148 of the Act ? 56. We are unable to further accept this argument of the ld.DR, because if it were to be accepted, it would result in a scenario wherein the competent authority was according sanction / approval in terms of Section 151 of the Act for issuing notice u/s. 148 of the Act even prior to reply of the assessee to the Show Cause Notice u/s. 148A(b) of the Act and even prior the decision of the AO in reckoning whether it was a fit case or not for issuing notice u/s. 148 of the Act. 57. Furthermore, if the said argument were to be accepted, then the very purpose behind introduction of provisions in Section 148A of the Act by way of Finance Act, 2021 to grant an opportunity to the tax payer to demonstrate his case for dropping the proceedings before issuing notice u/s. 148 of the Act would stand defeated. 58. Thus, o....
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....sued u/s. 148 of the Act dated 19.04.2022 and the order u/s. 148A(d) of the Act after the expiry of 3 years from the end of the relevant assessment year as against the correct sanction to have been granted by the authorities prescribed u/s. 151(ii) of the Act would vitiate the entire reassessment proceedings initiated and completed in terms of Section 147 of the Act. The PCIT by assuming revisionary jurisdiction in terms of Section 263 of the Act could not have set aside a non-est re-assessment order and further could not have directed the AO to pass a fresh assessment order." 5. The Ld. DR on the other hand pointed out that the AO initiated the proceedings by issue of notice u/s. 148A(b) within 3 years and therefore the AO has rightly obtained the approval from PCIT. The Ld DR in this regard placed reliance on the decision of the Hon'ble Calcutta High Court in the case of Girija Commercial (P) Ltd vs UOI 2024 169 taxmann.com 168 (Calcutta). 6. We heard the parties and perused the material on record. In respect of the legal issue raised by assessee assailing that statutory notice issued by AO u/s 148 as bad in law for non-sanction by competent authority as prescribed u/s ....
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.... that AO ought to have obtained Approval from Principle Chief Commissioner of Income Tax (PCCIT) before issuing the ibid notice as per Section 151(ii) of the Act. Accordingly, respectfully following the ratio of judicial precedence cited supra, we hold that the re-opening notice issued by the AO u/s. 148 for AY 2018-19 beyond 3 years on 13.04.2022 with the approval of PCIT instead of PCCIT as per the provisions of section 151(ii) is not valid. Consequently, the assessment completed on 07.03.2014 stemming from the invalid notice dated 13.04.2022 deserves to be quashed, and we order accordingly. 9. Since we have allowed the appeal considering the legal issue raised by the assessee supra, other grounds have become academic, so not examined. 10. In result, appeal of the assessee is allowed. Order pronounced on the 25th day of March, 2026, in Chennai. ============= Document 1 GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT OFFICE OF THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 1(1) SALEM ME TAX DEPARTMENT To, VASANTHI RAGUNATHAN NO 355 , TRICHY MAIN ROAD GUGAI SALEM 636006 , Tamil Nadu India PAN: A.Y: Dated: DIN & Notice No: AAYPR3824M 2018-19 13/....