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2026 (4) TMI 51
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....ained sanction/approval of the competent authority in terms of Section 151 of the Act. Since the aforesaid issue raised by the assessee in its cross objection is a purely jurisdictional issue striking at the very root of the assessment proceedings and can be decided based on facts and materials available on record, we deem it appropriate to address the issue at the very outset. 3. Few relevant facts for deciding this issue are, the assessee is a resident individual. For the assessment year under dispute, assessee had filed his return of income u/s. 139(1) of the Act, declaring income of Rs. 90,58,280/-. On going through the information available on the insight portal of the department, the Assessing Officer came to know that the assessee had entered into some suspicious transactions in the year under consideration. It was noticed that the assessee is in the business of manufacturing of diamonds and its imports and exports. He found that the assessee had entered into high value transactions with couple of other entities which do not appear to be normal. Based on the information received, the Assessing Officer intended to make enquiry and accordingly issued notice u/s. 133(6) of t....
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....it has submitted, after expiry of 3 years from the end of the relevant assessment year, the competent authority who can grant approval/sanction u/s. 148 of the Act is the Principal Chief Commissioner of Income Tax or Chief Commissioner of Income Tax, whereas, he submitted, in the case of the assessee the Assessing Officer has taken prior approval of Principal Commissioner of Income Tax who is not an authority prescribed u/s. 151(ii) of the Act. Thus, he submitted, there is gross jurisdictional error in initiating the proceedings u/s. 147 of the Act. In this context, he relied upon the following decisions: i. Ramesh Bachulal Mehta v. ITO [2025] 177 taxmann.com 606 (Bombay). ii. (Third Member) Essar Exploration and Production Ltd. Vs. DCIT in ITA No. 549/Mum/2024, date of order 12.09.2025. 7. However, without prejudice to the aforesaid submissions, the learned Counsel for the assessee fairly submitted that in course of proceedings before the First Appellate Authority, the assessee had furnished an affidavit not to press the jurisdictional issue raised in ground no. 2 relating to the validity of the notice u/s. 148 of the Act. However, he submitted that the issue ....
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....jrat High Court in case of Dhanraj Govindram Kella vs. ITO in Special Civil Application No. 6387 of 2022 vide judgment dated 08.07.2025. 9. We have given a thoughtful consideration to rival contentions and perused the materials on record. We have also applied our mind to the judicial precedents cited before us. At the outset, we deem it appropriate to address the issue whether by not pressing the jurisdictional issue before the First Appellate Authority, the assessee had given up his right to raise the issue before the Higher Appellate Authority. In this context, we must observe that in course of proceedings before the First Appellate Authority, the assessee did furnish an affidavit expressing his intention not to press the grounds raised challenging the validity of the notice issued u/s. 148 of the Act. However, the present cross objection has been filed by the assessee before us raising the very same issue. The learned Departmental Representative has expressed strong objections against entertaining the grounds. In our view, jurisdiction or lack of it, strikes at the very root of any proceeding. It is fairly well settled that in case a particular authority has no jurisdiction t....
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....ance is placed on the decision of the Supreme Court in Commissioner of Income-tax v. M.K.K.R. Muthukaruppan Chettiar [1970] 78 ITR 69. The following passages from that judgment are relied upon by the learned counsel for the assessee: "It is not necessary to decide whether the observations made by the Appellate Assistant Commissioner in his order declining to assess the income of the Hindu undivided family operated to lift the bar of limitation as regards the assessment of income of the separated members by the application of the principle of the judgments of this court in Income-tax Officer v. Murlidhar Bhagwan Das [1964] 52 ITR 335 and N. Kt. Sivalingam Chettiarv. Commissioner of Income-tax [1967] 66 ITR 586. In our opinion, the orders passed by the income-tax authorities and confirmed by the Tribunal suffer from a fundamental defect. As we have already stated, Karuppan Chettiar submitted returns of his income in his individual capacity for the years 1950-51, 1951-52 and 1952-53 in response to the notice issued under section 22(2) of the Act. By his order dated June 18, 1953, the Income-tax Officer closed the assessments as 'no assessments' and added that since th....
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.... valid notice (now section 148). If the notice issued by him is invalid for any reason the entire proceedings taken by him would become void for want of jurisdiction" It is axiomatic that what is void is non est. In this situation, the assessee was not precluded from urging the grounds Nos. 2 to 5. By giving them up the assessee could not confer jurisdiction on the Income-tax Officer where he had none. Therefore, the Tribunal was bound to hear the assessee and could not reject the appeal on the ground that grounds Nos. 2 to 5 were not agitated before the Appellate Assistant Commissioner and thus could not be permitted to be agitated before it." 12. As could be seen from the aforesaid observations of the Hon'ble Court, where the authority concerned had no jurisdiction, any action undertaken by him beyond his jurisdiction would be void and non-est. Therefore, the act of giving up a jurisdictional issue by the assessee, would not confer jurisdiction on the Assistant Officer, where he had no jurisdiction in the first place. In case of Suresh K. Jajoo vs. ACIT (supra), the coordinate bench while dealing with similar issue of non-pressing of a ground before the First Appe....
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....n 148A(d) as also notice issued u/s. 148 of the Act demonstrate that they have been passed/issued after obtaining prior approval of Principal Commissioner of Income Tax-19, Mumbai. 14. At this stage, a reference can be made to Section 151(ii) of the Act. A reading of the said provision makes it clear that after expiry of 3 years from the end of the relevant assessment year, the authority competent to grant approval/sanction is the Principal Chief Commissioner of Income Tax or Chief Commissioner of Income Tax. The Principal Commissioner of Income Tax is not an authority prescribed u/s. 151(ii). Therefore, in the facts of the present appeal, it is proved beyond doubt that before passing the order u/s. 148A(d) and issuing notice u/s. 148 of the Act, the Assessing Officer has not obtained the approval of the competent authority in terms of Section 151(ii) of the Act. It is fairly well settled that lack of approval by a competent authority in terms of Section 151 of the Act vitiates the entire proceeding and makes it null and void. In this context, we may refer to the following observations of the Hon'ble Jurisdictional High Court in case of Ramesh Bachulal Mehta vs. ITO (supra):....
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....f the old regime Before expiry of four years from the end of the relevant assessment year Joint Commissioner Section (1) of the old regime After expiry of four years from the end of the relevant assessment year Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner Section 151 (i) of the new regime Three years or less than three years from the end of the relevant assessment year Principal Commissioner or Principal Director or Commissioner or Director Section 151 (ii) of the new regime More than three years have elapsed from the end of the relevant assessment year Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General 74. The above table indicates that the specified authority is directly co-related to the time when the notice is issued. This plays out as follows under the old regime: (i) If income escaping assessment was less than Rupees one lakh: (a) a reassessment notice could be issued under section 148 within four years after obtaining the approval of the Joint Commissioner; and (b) no notice could be issued after the expiry of four years; and ....
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.... of the Revenue are not defeated because the assessing officer could not comply with the pre conditions due to the difficulties that arose during the COVID-19 pandemic. Section 3(1) of TOLA relaxes the time limit for compliance with actions that fall for completion from 20th March 2020 to 31st March 2021. TOLA will accordingly extend the time limit for the grant of sanction by the authority specified under section 151. The test to determine whether TOLA will apply to Section 151 of the new regime is this: if the time limit of three years from the end of an assessment year falls between 20th March 2020 and 31st March 2021, then the specified authority under section 151(i) has an extended time till 30th June 2021 to grant approval. In the case of Section 151 of the old regime, the test is: if the time limit of four years from the end of an assessment year falls between 20th March 2020 and 31st March 2021, then the specified authority under section 151(2) has time till 31st March 2021 to grant approval. The time limit for Section 151 of the old regime expires on 31st March 2021 because the new regime comes into effect on 1st April 2021. 78. For example, the three year time li....
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....erms of Section 148-A(d) in respect of each of the assesses concerned." Further, it directed the assessing officers to issue a notice under Section 148 of the new regime "after following the procedure as required under section 148-A." Although this Court waived off the requirement of obtaining prior approval under section 148A(a) and Section 148A(b), it did not waive the requirement for Section 148A(d) and Section 148. Therefore, the assessing officer was required to obtain prior approval of the specified authority according to Section 151 of the new regime before passing an order under section 148A(d) or issuing a notice under section 148. These notices ought to have been issued following the time limits specified under section 151 of the new regime read with TOLA, where applicable." 8. On bare reading of the above extract of the judgment of Hon'ble Supreme Court in the case of Rajeev Bansal (supra), we find that the Hon'ble Supreme Court had clarified as under: 8.1 Under the substituted provisions of re-assessment as introduced by the Finance Act, 2021, the Assessing Officer is required to obtain prior approval or sanction of the 'Specified Authority....
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....ncipal Chief Commissioner or Chief Commissioner) was required to grant approval. Accordingly, we conclude that in the present case the approval has been obtained from the authority specified under Section 151(i) of the new regime instead of the authority specified under Section 151(ii) of the new regime. 10. The Hon'ble Supreme Court in the above case has drawn an illustration in paragraph 78 of it's order in the context of Assessment Year 2017-18, wherein it is categorically held that the authority specified under section 151(i) can accord sanction only upto 30.06.2021. This illustration makes it absolutely clear that when the period of three years from end of relevant Assessment Year expired between 20.03.2020 and 31.03.2021, the extension by virtue of TOLA was upto 30.06.2021 and not beyond. Thus, it can be said that the period of three years from the end of the relevant Assessment Year (here AY 2016-17) expired on 30.06.2021, whereas the Respondent No.1, despite passing the order on 13.07.2022 in repsect of Assessment Year 2016-17, has obtained approval of Respondent No.2 who is not the authority as prescribed under section 151(ii). 11. Non-compliance ....