TaxTMI 
TaxTMI 
2026 (2) TMI 1479
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....00/-, citing non-application of the independent mind and lack of any enquiry done by the assessing officer, without appreciating the crucial fact that the material information/finding related to the assessee was a result of extensive enquiry and investigation undertaken by the investigative wing of the department in the course of 132 proceedings in the case of Vivekananda Yoga Anusandhana Samsthana (VYASA). 2. "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was correct in ignoring the findings revealed during search action u/s. 132 in the case of Vivekananda Yoga Anusandhana Samsthana (VYASA) that it was engaged in organized scam of providing bogus entries to various parties to claim weighted deduction u/s. 35(1)(ii) of the Income Tax Act, 1961 and to evade the taxes? 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was correct in holding that the Assessing Officer did not bring any material to disapprove the evidence furnished by the assessee without appreciating the facts that the investigation clearly revealed that Vivekananda Yoga Anusandhana Samsthana (VYASA) was engaged in providing bogus entries....
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....uted the present appeal to assail the finding of Ld. CIT(A) on merits. On the other hand, assessee preferred to file a cross objection (CO) before the tribunal. 4. At the outset, the Id. Counsel representing the assessee (ld. AR) submitted that legal contentions raised by the assessee before the ld. CIT(A) are dismissed without adjudication, as the appeal of assessee was decided on merits in favour of the assessee, stating that the grounds of appeal challenging the validity of assessment proceedings are dismissed for statistical purposes, since the assessee has already got the relief on quantum additions as per paragraph no. 5.2.5 of the impugned order. It is further submitted by the ld. AR that, a legal ground raised by the assessee before the ld. CIT(A) is again raised by the assessee in the C.O. challenging the validity of approval granted under section 151 of the Act. 5. Explaining the facts of the case, the ld. AR submitted that the present matter pertains to AY 2016-17, which was reopened u/s 147 and accordingly notice under section 148 was issued on 28.06.2021, thus clearly the initiation of re-opening proceeding was after three years from the end of relevant assessmen....
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....the approval of Pr. CIT who was not the specified authority to do so, whereas, in present case, the approval should have been granted by the Pr. CIT or Pr. Director General or Chief Commissioner or Director General as per clause-(ii) of section 151 of the Act. Consequently, the proceedings initiated on the foundation of invalid approval are bad-in-law and liable to be quashed. 8. Per contra, the ld. Sr. DR representing the revenue submitted that the notice dated 30.07.2022 was issued with requisite sanction in accordance with the process directed in Ashish Agarwal (supra), further any minor defect is curable under section 292B. It was the submission that the Hon'ble Supreme Court has held that re-assessment would be valid if "reason to believe" exists, even during the pending proceedings. It was the submission that the approval may be treated from the specified authority being the minor mistake is a curable one. 9. We have considered the rival submissions perused the material available on record and the judicial pronouncement relied upon by the assessee in support of the legal contention raised. The identical issue has been dealt with and decided by the Co-ordinate Bench ....
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....ied authority" for the purposes of section 148 and section 148A shall be, if three years or less than three years have elapsed from the end of the relevant assessment year, Principal Commissioner or Principal Director or Commissioner or Director. If more than three years have elapsed from the end of the relevant assessment year, then Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. 21 Admittedly, in this case, the approval/sanction for order under section 148A(d) of the Act has been granted by the Principal Commissioner of Income- tax-8. The entire controversy is, therefore, (a) whether the Principal Commissioner was the specified authority, who could have granted the approval/sanction? (b) if not, the effect thereof? In our view, the approval is not valid. Hence, the impugned order passed under section 148A(d) read with notice issued under section 148 of the Act dated July 31, 2022 is not valid and has to be quashed and set aside. The first proviso to section 148 of the Act refers to the approval of the specified authority being obtained before a notice under section 148 of the Act can be issued. Expla....
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....the period March 20, 2020 to December 31, 2020, the time limit for completion of such action stood extended to March 31, 2021. Thus, the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act only seeks to extend the period of limitation and does not affect the scope of section 151. 26 The Assessing Officer cannot rely on the provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act and the notifications issued thereunder as section 151 has been amended by the Finance Act, 2021 and the provisions of the amended section would have to be complied with by the Assessing Officer, with effect from April 1, 2021. Hence, the Assessing Officer cannot seek to take the shelter of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act as a subordinate legislation cannot override any statute enacted by Parliament. Further, the notification extending the dates from March 31, 2021 till June 30, 2021 cannot apply once the Finance Act, 2021 is in existence. The sanction of the specified authority has to be obtained in accordance with the law existing when the sanction is obtained and, therefore, the sancti....
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....in its order has held as under: "2. Counsels state that in all these Petitions the issue of improper sanction having been obtained has been raised among other grounds. Counsels state that the issue of improper sanction has been decided by this Court in the case of Siemens Financial Services Private Limited v. Deputy Commissioner of Income Tax and Others', wherein the Court has held that for Assessment Year 2016-2017, the sanction should have been given under Section 151 (ii) and not under Section 151(i) of the Income Tax Act, 1961 ("the Act") and consequently the sanction is invalid. The Court has stated that in view of the invalid sanction, the notice issued itself will be invalid and has to be quashed. We would also add, if the notice has to be quashed even where there is an assessment order passed subsequently, those assessment orders having been passed relying on an incorrect sanction, will also have to be quashed. Ordered accordingly. 3. In view of the above, all consequential notices/demands issued under Section 156 or 271 of the Act will also have to be quashed. Ordered accordingly. 4. All Petitions disposed. 5. Counsels furth....
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....here there is no PCCIT or PDGIT, the Chief Commissioner (CCIT) or the Director General (DGIT). However, in paragraph 7 of the order dated 13.07.2022 passed under section 148A(d), Respondent No.1 has stated that before passing the said order, prior approval of Respondent No.2 i.e. the Principal Commissioner of Income Tax-27, Mumbai, was obtained and the said order was passed thereafter. This aspect remains uncontroverted by the Respondents. 6. In these facts, the limited point to be examined is whether the order dated 13.07.2022 passed under section 148A(d) for the Assessment Year 2016-17 after obtaining approval of Respondent No.2 [i.e. the PCIT-27, Mumbai], was in accordance with the provisions of section 151. 7. The Petitioner has drawn our attention to the decision of the Hon'ble Supreme Court in the case of Union of India vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC)/[2024] 301 Taxman 238 (SC)/[2024] 469 ITR 46 (SC) and we deem it appropriate to refer to the said judgment where the Hon'ble Supreme Court has, while dealing with the issue of approval from the specified authority in terms of Section 151 of the Act, made the following observations: ....
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....ed 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 Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director Ge....
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....e 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. 80. In AshishAgarwal (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 the requirement of conducting any enquiry with the prior approval of the specifi....
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....equired 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. 8.2 Under 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 assessment year only after obtaining the prior approval of the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. 8.3 Section 151(ii) of the substituted provisions prescribes a higher level of authority if more than three years have elapsed from the end of the relevant assessment year. Thus, non-compliance with the provisions of section 151 vitiates the jurisdiction of the Assessing Officer to issue a notice under section 148. 8.4 Grant of sanction by the appropriate authority is a precondition for the assessing officer to assume jurisdiction under section 148 to issue a reassessment notice. 9. In the present case the period of three years from the end of the Assessment Year 2016-17 fell for completion on 31 March 2020. ....
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.... under Section 148A(d) of the Act and the consequential notice issued under section 148 dated 15.07.2022 are bad in law for being violative of the provisions of Section 151(ii) of the Act. Hence they are required to be quashed and set aside." 13. In backdrop of the facts and circumstances of the present case, analyzed in light of the decisions of the Hon'ble Apex Court and Hon'ble Bombay High Court, we are of the considered view that the order passed under section 148A(d) dated 31.07.2022, the notice issued under section 148 with prior approval of the authority specified u/s 151(i) for a case covered by provisions of section 151(ii) and further consequential proceedings of re-opening of assessment are bad-in-law, therefore are held as set-aside and quashed. 14. Since, one of the legal issues raised way of the C.O. is decided in favour of the assessee, which led to quashing of the assessment, the other issues raised challenging validity of jurisdiction as well as on the merits of case are rendered as academic and need not be adjudicated separately. 15. In result, the C.O. of assessee stands allowed and appeal of revenue challenging the decision of ld. CIT(A) on meri....