2026 (4) TMI 836

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....explaining the nature and source of such deposits despite repeated opportunities? (ii) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A), NFAC has erred in holding that the Assessing Officer was required to conclusively establish that the cash deposits constituted taxable Income, ignoring the settled position that the primary burden to explain the source of cash deposits lies upon the assessee as provisions of Section 69A of the Act? (iii) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A), NFAC has erred in not appreciating that an audit report cannot substitute the requirement of furnishing documentary evidences explaining abnormal cash deposits made during the demonetization period, and that the failed to submit any cogent evidence or satisfactory explanation regarding the availability and source of cash in hand? (iv) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A), NFAC has erred in holding that the Assessing Officer exceeded the scope of reassessment proceedings, without appreciating that it is held at Explanation to Section 147 of the Act onc....

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.... case and in law, the Hon'ble CIT(A) erred in upholding the action of reopening of the assessment by the Income Tax officer, ward 28(3)(1) ('the Jurisdictional AO i.e., "JAO') in the case of the Assessee, ignoring the fact that the matter is squarely covered by the Hon'ble Bombay High Court's (Jurisdictional High Court) Judgement in the case of Hexaware Technologies Ltd. v Assistant Commissioner of Income-tax, Circle 15(1)(2) [2024] 162 taxmann.com 225 (Bombay), i.e., binding on the Ld. AO. 5. That on the Facts and circumstances of the case and in law, the Hon'ble CIT(A) has grossly erred in upholding the validity of the impugned notice issued u/s 148, ignoring the fact that no DIN was quoted on the notice Issued u/s 148 of the Act, in contravention to CBDT circular 19/2019 dated 14.08.2019. 6. The Respondent craves the right to add, alter, DELETE any of the grounds of Appeal as stated herein above." 4. The assessee, vide its application dated 02/04/2026, raised the following additional grounds in its cross-objection: - "1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in upholding the validity of t....

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....me Court in Union of India vs. Ashish Agrawal reported in (2022) 444 ITR 1 (SC), the original notice issued under section 148 of the Act on 17/06/2021 was deemed to be issued under section 148A(b) of the Act. Vide show cause notice dated 25/05/2022, the information and material relied upon by the Revenue were provided to the assessee and time was granted to the assessee to respond to the same within two weeks in terms of provisions of section 148A(b) of the Act. 10. Rejecting the objections filed by the assessee, an order under section 148A(d) of the Act was passed on 28/07/2022 declaring that it is a fit case for issuance of notice under section 148 of the Act. Thereafter, on the same date, i.e. on 28/07/2022, notice under section 148 of the Act was issued by the Jurisdictional Assessing officer. After considering the submissions of the assessee filed during the reassessment proceeding, the AO passed the order dated 23/05/2023 under section 147 read with section 144B of the Act assessing the total income of the assessee at Rs. 2,62,44,344. 11. The learned CIT(A), vide impugned order, granted relief to the assessee on merits and deleted the addition made by the AO. Being aggr....

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....ore, as per the first proviso to section 148 of the Act, it is evident that for issuing notice under the section, the AO is required to obtain prior approval of the Specified Authority. The second proviso to section 148 further provides that no such approval shall be required where the AO, with the prior approval of the Specified Authority, has passed the order under section 148A(d) of the Act. Further, Explanation 3 clarifies that the Specified Authority for the purpose of section 148 shall be the Specified Authority as referred to in section 151 of the Act. 14. Further, section 151 of the Act deals with the Specified Authority for section 148 and section 148A of the Act, and the same reads as follows: - "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 Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year." ....

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....Officer is required to obtain prior approval or sanction of the 'specified authority' at four stages - at the first stage under Section 148A(a), at the second stage under Section 148A(b), at the third stage under Section 148A(d), and at the fourth stage under Section 148. In the case of Ashish Agarwal (supra) the Hon'ble Supreme Court waived off the requirement of obtaining prior approval under section 148A(a) and Section 148A(b) of the Act only. 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 for issuing a notice under Section 148. (b) Under the new regime, if income escaping assessment is more than Rupees 50 lakhs, a reassessment notice could be issued after the expiry of three years from the end of the relevant previous year only after obtaining the prior approval of the Principal Chief Commissioner or the Principal Director General or the Chief Commissioner or the Director General. (c) Section 151(ii) of the new regime prescribes an approval of a higher authority, if more than three years have elaps....

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....No.1, despite passing order under section 148A(d) on 18.08.2022, and issuing notice under section 148 on 23.08.2022 [in respect of Assessment Year 2017-18], has obtained approval of Respondent No.2 who is not the authority as prescribed under section 151(ii). 12. Non-compliance by Respondent No.1 with the provisions contained in Section 148A(d) read with Section 151(ii) vitiates the jurisdiction of Respondent No.1 to issue a notice under Section 148 of the Act. 13. We are clearly of the view that the present matter stands covered by the decision of Hon'ble Supreme Court in the case of Rajeev Bansal (supra) and we are bound by it. Accordingly, we hold that the order dated 18.08.2022 passed under Section 148A(d) of the Act and the consequential notice issued under section 148 dated and 23.08.2022 are bad in law, and hence, are required to be quashed and set aside. 14. We accordingly set aside the impugned order dated 18.08.2022 passed under Section 148A(d) of the Act and the consequential notice issued under section 148 dated 23.08.2022, and all other proceedings/orders emanating therefrom." 18. From the perusal of the order dated 28/07/2022 passed u....