AJAY MULTI PROJECTS PRIVATE LIMITED,MUMBAI V. DCIT, CIRCLE 4(1)(1), MUMBAI, AAYKAR BHAWAN, MUMBAI

ITA 587/MUM/2025

AI Insights

Ajay Multi Projects Pvt. Ltd appealed against the order of the Commissioner of Income-tax (Appeals) concerning the reassessment for the assessment year 2016-17. The primary contention was the validity of the notice issued under Section 148 for reopening the assessment, which the assessee argued was bad in law due to non-fulfillment of jurisdictional requirements and improper application of mind. The Income Tax Appellate Tribunal found that the notice was issued without the necessary approval from the correct authority as mandated by the amended provisions of the Act, leading to the quashing of the reassessment proceedings.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471414 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Other Referred Cases: Ashish Agarwal vs. Taxmann.com, Rajeev Bansal vs. Taxmann.com
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM KRISHN KEDIA
• Assessee Lawyers: DHARAN GANDHI
• Keywords: Business income; Reassessment proceedings; Reopening of assessment; Principle of natural justice; Initiation of penalty proceedings
• Section: 147; 148; 143(3); 142(1); 271(1)(c); 48; 69A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND MS. KAVITHA RAJAGOPAL (JUDICIAL MEMBER) ITA No. 587/MUM/2025 Assessment Year: 2016-17 Ajay Multi Projects Pvt. Ltd., 2nd floor, C.J. House, 285 Princess Street, Marine Lines, Mumbai-400002. Vs. DCIT, Circle-4(1)(1), Aayakar Bhavan, Mumbai-400020. PAN NO. AADCA 0338 H Appellant Respondent Assessee by : Mr. Dharan Gandhi Revenue by : Mr. Ram Krishn Kedia, Sr. DR Date of Hearing : 13/03/2025 Date of pronouncement : 27/03/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 06.01.2025 passed by the Ld. Commissioner of Income-tax (Appeals) [in short ‘the Ld. CIT(A)’] for assessment year 2016-17, raising following grounds: 1. The Ld. CIT(A) has erred in upholding the validity of notice issued u/s. 148 the Act for reopening of the assessment by the Assessing Officer. 2. The notice u/s148 is bad in law and as the jurisdictional requirements of section 147 to 151 have not been fulfilled. 3. The reopening of assessment is without proper application of mind and therefore, bad in law. 4. The provisions of section 148A have not been followed as a result, the reassessment proceedings are bad in law. The sanction u/s 151 is bad in law and as a result, the reassessment proceeding is bad in law. 6. The Ld. CIT(A) has erred in confirming the reopening proceedings and upholding he order passed u 143(3) r.w.s. 144B of the Act without appreciating that the same was against the principle of Natural Justice and is bad in law. 7. The Ld. CIT(A) has erred in upholding the addition made by the Assessing Officer u/s. by adding the entire sale proceeds of the four scrips, (i) Syncom Formulation (India) Ltd. (i) Stampede Capital Ltd. Virtual Global Education Ltd. (iv) Nyssa Corporation Ltd. totaling to Rs. 8,88,89,141/ of the assesses. 8. The Ld. CIT(A) has erred in upholding the adding back of entire sale proceeds of the four scrips of Rs. 8,88,89,141/ u/s. 69A r.w.s. 11SBBE of the Act without appreciatin fact that the net profit earned of Rs. 63,35,453/ said four scrips was already offered for tax by assesse as business income. 9. The Ld. CIT(A) has erred in confirming the initiation of penalty proceedings u/s. 10. The Ld. CIT(A) has erred in confirming the levy of interest u/s. 234A, 234B, 234C and 234D Ajay Multi Projects Pvt. Ltd ITA No. 587/MUM/2025 2. The notice u/s148 is bad in law and without jurisdiction as the jurisdictional requirements of section 147 to 151 have not been fulfilled. 3. The reopening of assessment is without proper application of mind and therefore, bad in law. 4. The provisions of section 148A have not been followed as a result, the reassessment proceedings are bad in law. The sanction u/s 151 is bad in law and as a result, the reassessment proceeding is bad in law. 6. The Ld. CIT(A) has erred in confirming the reopening proceedings and upholding he order passed u/s. 147 r.w.s. 143(3) r.w.s. 144B of the Act without appreciating that the same was against the principle of Natural Justice and is bad 7. The Ld. CIT(A) has erred in upholding the addition made by the Assessing Officer u/s. 69A r.w.s. 115BBE of th by adding the entire sale proceeds of the four scrips, (i) Syncom Formulation (India) Ltd. - Rs. 3,93,91,482/-, (i) Stampede Capital Ltd. - Rs. 3,16,83,459/-, (iii) Virtual Global Education Ltd. - Rs. 1,17,87,390/-, (iv) Nyssa Corporation Ltd. - Rs. 60,26,810/-, totaling to Rs. 8,88,89,141/- as unexplained money assesses. 8. The Ld. CIT(A) has erred in upholding the adding back of entire sale proceeds of the four scrips of Rs. 8,88,89,141/ u/s. 69A r.w.s. 11SBBE of the Act without appreciatin fact that the net profit earned of Rs. 63,35,453/- from the said four scrips was already offered for tax by assesse as business income. 9. The Ld. CIT(A) has erred in confirming the initiation of penalty proceedings u/s. 271(1)(c) of the Act. Ld. CIT(A) has erred in confirming the levy of interest u/s. 234A, 234B, 234C and 234D of the Act. Ajay Multi Projects Pvt. Ltd 2 ITA No. 587/MUM/2025 without jurisdiction as the jurisdictional requirements of section 147 to 151 have 3. The reopening of assessment is without proper application 4. The provisions of section 148A have not been followed and as a result, the reassessment proceedings are bad in law. The sanction u/s 151 is bad in law and as a result, the 6. The Ld. CIT(A) has erred in confirming the reopening /s. 147 r.w.s. 143(3) r.w.s. 144B of the Act without appreciating that the same was against the principle of Natural Justice and is bad 7. The Ld. CIT(A) has erred in upholding the addition made 69A r.w.s. 115BBE of the Act, , as unexplained money 8. The Ld. CIT(A) has erred in upholding the adding back of entire sale proceeds of the four scrips of Rs. 8,88,89,141/- u/s. 69A r.w.s. 11SBBE of the Act without appreciating the from the said four scrips was already offered for tax by assesse as 9. The Ld. CIT(A) has erred in confirming the initiation of Ld. CIT(A) has erred in confirming the levy of interest 2. Briefly stated, facts of the case are that engaged in the business of inter corporate deposits/loans and advances, investment in shares & The assessee filed return of income on 01.09.2016 declaring total income at Rs.1,75,13, assessee was selected for scrutiny under the Income-tax served upon the assessee. In the scrutiny assessment completed u/s 143(3) of the Act on 30.11.2018, the returned income filed by the assessee was acc Act was issued on 30.06.2021. This notice was issued under the un-amended old provisions of 148 under the Act , o that limitation which was expiring on 31.03.2020 to 30.06.2021 by way of and Amendments of certain Provisions ) Act , 2020 ( in short the TOLA). The Department had issued such notices under provisions with extended period of TOLA in many cases which subjected to writ petition Hon’ble Supreme Court in the case of Ashish Agarwal taxmann.com 64(SC) section 148 of the Act process before actually issue of notice u/s 148 of the Act. Therefor the Hon’ble Supreme Court held that once the new provisions have been made effective from 01.04.2021 the old or the un provisions u/s 148 are not operation as on 01.04.2021 and Ajay Multi Projects Pvt. Ltd ITA No. 587/MUM/2025 Briefly stated, facts of the case are that the assessee is engaged in the business of inter corporate deposits/loans and advances, investment in shares & securities and share trading etc. he assessee filed return of income on 01.09.2016 declaring total income at Rs.1,75,13,680/-. The return of income filed by the assessee was selected for scrutiny assessment and statutory notices tax Act, 1961 (in short ‘the Act’) were issued and served upon the assessee. In the scrutiny assessment completed u/s 143(3) of the Act on 30.11.2018, the returned income filed by the assessee was accepted. Subsequently, the notice d on 30.06.2021. This notice was issued under the rovisions of 148 under the Act , o that limitation which was expiring on 31.03.2020, was extended up to 30.06.2021 by way of The Taxation and Other Laws ( Relaxation nts of certain Provisions ) Act , 2020 ( in short the . The Department had issued such notices under extended period of TOLA in many cases which subjected to writ petitions before various Hon’ble High Courts. The me Court in the case of Ashish Agarwal taxmann.com 64(SC) held that w.e.f. 01.04.2021, the provis section 148 of the Act are amended with introduction of three stage process before actually issue of notice u/s 148 of the Act. Therefor the Hon’ble Supreme Court held that once the new provisions have been made effective from 01.04.2021 the old or the un provisions u/s 148 are not operation as on 01.04.2021 and Ajay Multi Projects Pvt. Ltd 3 ITA No. 587/MUM/2025 the assessee is engaged in the business of inter corporate deposits/loans and securities and share trading etc. he assessee filed return of income on 01.09.2016 declaring total . The return of income filed by the and statutory notices Act, 1961 (in short ‘the Act’) were issued and served upon the assessee. In the scrutiny assessment completed u/s 143(3) of the Act on 30.11.2018, the returned income filed by epted. Subsequently, the notice u/s 148 of the d on 30.06.2021. This notice was issued under the rovisions of 148 under the Act , on the premise was extended up The Taxation and Other Laws ( Relaxation nts of certain Provisions ) Act , 2020 ( in short the . The Department had issued such notices under old extended period of TOLA in many cases which were Hon’ble High Courts. The me Court in the case of Ashish Agarwal in (2022) 138 held that w.e.f. 01.04.2021, the provisions of introduction of three stage process before actually issue of notice u/s 148 of the Act. Therefore, the Hon’ble Supreme Court held that once the new provisions have been made effective from 01.04.2021 the old or the un-amended provisions u/s 148 are not operation as on 01.04.2021 and therefore, same cannot be extended by way of TOLA, the Hon’ble Supreme Court held that however TOLA will be applicable on the new provisions during the period from 01.04.2021 to 30.06.2021. But as a onetime measure, the Hon’ble Supreme Court invoking the Article 142(1) of the Constitution notices u/s 148 of the Act old provisions as notice issued u/s 148A(b) of the Act amended reassessment provisions. Accordingly, the notice u/s 148 of the Act issued in the case of assessee on 30.06.2021 was held Act. Further, in the case of Rajiv Agrawal (supra), the various assessees challenged the limitation in completing the process of the reassessment under amended provisions and issue of notice u/s 148 of the Act as well as sanction/approval of the notice u/s 151 of the Act under the amended provisions. The Hon’ble Supreme Court in the case of Rajeev Bansal [2024] 167 taxmann.com 70 (SC) held that the period from the issue of the notice u/s 148 of the Act under old provisions up to the period of filing of reply by the assessee before the Assessing officer, the Hon’ble Supreme Court in the case of Ashish Agarwal (supra) will be deemed to be stayed and the Assessing Officer will get survival period for issue of completion of the entire three step process of reassessment and issue of the notice u/s 148 of the Act under the amended provisions. Ajay Multi Projects Pvt. Ltd ITA No. 587/MUM/2025 therefore, same cannot be extended by way of TOLA, the Hon’ble me Court held that however TOLA will be applicable on the new provisions during the period from 01.04.2021 to 30.06.2021. But as a onetime measure, the Hon’ble Supreme Court invoking the Article 142(1) of the Constitution of India directed to treat the ices u/s 148 of the Act old provisions as notice issued u/s amended reassessment provisions. Accordingly, the notice u/s 148 of the Act issued in the case of assessee on 30.06.2021 was held to be issued u/s 148A(b) of the in the case of Rajiv Agrawal (supra), the various assessees challenged the limitation in completing the process of the reassessment under amended provisions and issue of notice u/s 148 of the Act as well as sanction/approval of the notice u/s 151 of t under the amended provisions. The Hon’ble Supreme Court in the case of Rajeev Bansal [2024] 167 taxmann.com 70 (SC) held that the period from the issue of the notice u/s 148 of the Act under old provisions up to the period of filing of reply by the before the Assessing officer, consequent to the decision of the Hon’ble Supreme Court in the case of Ashish Agarwal (supra) will be deemed to be stayed and the Assessing Officer will get survival period for issue of completion of the entire three step process of reassessment and issue of the notice u/s 148 of the Act under the amended provisions. Ajay Multi Projects Pvt. Ltd 4 ITA No. 587/MUM/2025 therefore, same cannot be extended by way of TOLA, the Hon’ble me Court held that however TOLA will be applicable on the new provisions during the period from 01.04.2021 to 30.06.2021. But as a onetime measure, the Hon’ble Supreme Court invoking the directed to treat the ices u/s 148 of the Act old provisions as notice issued u/s amended reassessment provisions. Accordingly, the notice u/s 148 of the Act issued in the case of issued u/s 148A(b) of the in the case of Rajiv Agrawal (supra), the various assessees challenged the limitation in completing the process of the reassessment under amended provisions and issue of notice u/s 148 of the Act as well as sanction/approval of the notice u/s 151 of t under the amended provisions. The Hon’ble Supreme Court in the case of Rajeev Bansal [2024] 167 taxmann.com 70 (SC) held that the period from the issue of the notice u/s 148 of the Act under old provisions up to the period of filing of reply by the consequent to the decision of the Hon’ble Supreme Court in the case of Ashish Agarwal (supra), will be deemed to be stayed and the Assessing Officer will get survival period for issue of completion of the entire three step process of reassessment and issue of the notice u/s 148 of the Act In the case of the assessee notice u/s 148 of the Act under the old provisions was issued on 30.06.2021 available to the AO and the day of filing of reply by the assessee subsequent to the decisions of Ashish Agarwal (supra) 3. Before us, the Ld. counsel for the assessee has however not challenged the validity of the limitation in issuing the Act. The assessee has only challenged the approval for issue of the notice u/s 148 of the Act from the appropriate authority. 4. We have heard rival submissions of the parties and perused the relevant materials on record the assessee specifically relate to the issue of sanction u/s 151 of the Act. Under the old provisions notice u/s 148 could be issued up upto four years without any income limit but from four to six years from the end of the relevant evaded income exceeds now w.e.f. 01.04.2021 no limit of income escaped is for issue of notice within three years from the end of the relevant assessment year, but notice beyond 3 years up to 10 years could be issued only if the tax evaded income exceeded Rs.50,00,000/ proviso to section 147 under the amended provisions further restriction has been imposed not to apply for evasion exceeding Rs.50,00,000/ the new provisions along with TOLA, the notices u/s 148 could be Ajay Multi Projects Pvt. Ltd ITA No. 587/MUM/2025 In the case of the assessee notice u/s 148 of the Act under the old issued on 30.06.2021, So no survival period is available to the AO and entire procedure was to be completed within the day of filing of reply by the assessee subsequent to the decisions (supra). Before us, the Ld. counsel for the assessee has however not challenged the validity of the limitation in issuing notice u/s 148 of the Act. The assessee has only challenged the approval for issue of the notice u/s 148 of the Act from the appropriate authority. We have heard rival submissions of the parties and perused the relevant materials on record. The ground No. 5 the assessee specifically relate to the issue of sanction u/s 151 of the Act. Under the old provisions notice u/s 148 could be issued up to four years without any income limit but from four to six years from the end of the relevant assessment year where exceeds Rs.1,00,000/-. But in amended provision now w.e.f. 01.04.2021 no limit of income escaped is for issue of notice within three years from the end of the relevant assessment but notice beyond 3 years up to 10 years could be issued only if the tax evaded income exceeded Rs.50,00,000/-. But by way of proviso to section 147 under the amended provisions further restriction has been imposed not to apply the period upto 10 years exceeding Rs.50,00,000/- retrospectively. Thus under the new provisions along with TOLA, the notices u/s 148 could be Ajay Multi Projects Pvt. Ltd 5 ITA No. 587/MUM/2025 In the case of the assessee notice u/s 148 of the Act under the old , So no survival period is ire procedure was to be completed within the day of filing of reply by the assessee subsequent to the decisions Before us, the Ld. counsel for the assessee has however not notice u/s 148 of the Act. The assessee has only challenged the approval for issue of the notice u/s 148 of the Act from the appropriate authority. We have heard rival submissions of the parties and perused of the appeal of the assessee specifically relate to the issue of sanction u/s 151 of the Act. Under the old provisions notice u/s 148 could be issued up to four years without any income limit but from four to six years where minimum tax . But in amended provision now w.e.f. 01.04.2021 no limit of income escaped is for issue of notice within three years from the end of the relevant assessment but notice beyond 3 years up to 10 years could be issued only . But by way of proviso to section 147 under the amended provisions further the period upto 10 years retrospectively. Thus under the new provisions along with TOLA, the notices u/s 148 could be issued up to 30.06.2021 assessment year 2016 lakhs and in case of tax evaded income exceeding Rs.5 the notices under 14 2013-14. In the instant case, the income evaded is more than Rs. 50,00,000/- and assessment year being 2016 148 of the Act could have been issued under the amended provisions beyond the period of three years up to 31.03.2023. Since notice u/s 148 of the Act has been issued on 29.07.2022 it is within the limitation even without invoking TOLA provisions The assessee challenged limitation of issuing u/s 148 of the Act during submission before the Assessing Officer however, the Assessing Officer in his order passed u/s 148A(d) of the Act dated 29.07.2022 has rejected the contention of the assessee. A copy the said order is available on Paper Book page 214 to 227 of the Paper Book. Therefater notice u/s 148 has been issued on 29.07.2022 , a copy of which is available on Paper Book page 213. 4.1 Before us, the Ld. counsel for the assessee has not challen the limitation in issuing notice u/s 148 of the Act but only challenged the appropriate authority from whom sanction for issue of notice u/s 148 should referred to the section 151 of the Act period within three years of the relevant assessment year of notice approval of the Ld. Ajay Multi Projects Pvt. Ltd ITA No. 587/MUM/2025 issued up to 30.06.2021 in respect of assessment year up to assessment year 2016-17 in case of tax evaded income up to Rs.50 hs and in case of tax evaded income exceeding Rs.5 the notices under 148 could be issued only up to assessment year 14. In the instant case, the income evaded is more than Rs. and assessment year being 2016-17, then notice u/s 48 of the Act could have been issued under the amended beyond the period of three years up to 31.03.2023. Since notice u/s 148 of the Act has been issued on 29.07.2022 it is within the limitation even without invoking TOLA provisions The assessee challenged limitation of issuing u/s 148 of the Act during submission before the Assessing Officer however, the Assessing Officer in his order passed u/s 148A(d) of the Act dated 29.07.2022 has rejected the contention of the assessee. A copy the said order is available on Paper Book page 214 to 227 of the Therefater notice u/s 148 has been issued on opy of which is available on Paper Book page 213. Before us, the Ld. counsel for the assessee has not challen the limitation in issuing notice u/s 148 of the Act but only challenged the appropriate authority from whom sanction for issue should have been obtained. The Ld. counsel referred to the section 151 of the Act and submitted that for a period within three years of the relevant assessment year of notice approval of the Ld. Principal Commissioner of Income Ajay Multi Projects Pvt. Ltd 6 ITA No. 587/MUM/2025 in respect of assessment year up to in case of tax evaded income up to Rs.50 hs and in case of tax evaded income exceeding Rs.50,00,000/-, issued only up to assessment year 14. In the instant case, the income evaded is more than Rs. then notice u/s 48 of the Act could have been issued under the amended beyond the period of three years up to 31.03.2023. Since notice u/s 148 of the Act has been issued on 29.07.2022, therefore, it is within the limitation even without invoking TOLA provisions. The assessee challenged limitation of issuing u/s 148 of the Act during submission before the Assessing Officer however, the Assessing Officer in his order passed u/s 148A(d) of the Act dated 29.07.2022 has rejected the contention of the assessee. A copy of the said order is available on Paper Book page 214 to 227 of the Therefater notice u/s 148 has been issued on opy of which is available on Paper Book page 213. Before us, the Ld. counsel for the assessee has not challenged the limitation in issuing notice u/s 148 of the Act but only challenged the appropriate authority from whom sanction for issue . The Ld. counsel submitted that for a period within three years of the relevant assessment year, for issue Principal Commissioner of Income-tax( PCIT) was required whereas for issue of not from the end of the relevant assessment year approval Principal Chief Commissioner of Income Commissioner of Income notice u/s 148 of the Act had been issued beyond the period of three years from the end of the relevant assessment year therefore, in our opinion, the approval of Ld. P For ready relevant provision of section 151 is reproduced 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 here is no Principal Chief Commissioner or Principal Director Gen- more than three years have elapsed from the end of the relevant assessment year.] 4.2 Before us, the Ld. counsel for the assessee has referred to para 3 of the notice u/s 148 of the mentioned that prior approval of the PCIT vide his letter dated 26.07.2022. Since notice u/s 148 of has been issued beyond the period of three years, the approval should have been obtained from the PC has been obtained from the PCIT and therefore, approval not being from the appropriate authority under the Ajay Multi Projects Pvt. Ltd ITA No. 587/MUM/2025 was required whereas for issue of notice beyond three years from the end of the relevant assessment year approval Principal Chief Commissioner of Income-tax (PCCIT) or Chief Commissioner of Income-tax(CCIT) was required. Undisputedly, the notice u/s 148 of the Act had been issued beyond the period of three years from the end of the relevant assessment year therefore, in our opinion, the approval of Ld. PCCIT was required. For ready relevant provision of section 151 is reproduced as under: “Sanction for issue of notice. 151. Specified authority for the purposes of section 148 and section 148A shall be,— ) 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; ) Principal Chief Commissioner or Principal Director General or is no Principal Chief Commissioner or Principal -eral, Chief Commissioner or Director General, it more than three years have elapsed from the end of the relevant year.]” Before us, the Ld. counsel for the assessee has referred to para 3 of the notice u/s 148 of the Act issued on 29.07.2022 where mentioned that prior approval of the PCIT-4, Mumbai was obtained vide his letter dated 26.07.2022. Since notice u/s 148 of issued beyond the period of three years, the approval should have been obtained from the PCCIT/CCIT whereas approval has been obtained from the PCIT and therefore, approval not being from the appropriate authority under the law notice u/s Ajay Multi Projects Pvt. Ltd 7 ITA No. 587/MUM/2025 ice beyond three years from the end of the relevant assessment year approval of the Ld. tax (PCCIT) or Chief was required. Undisputedly, the notice u/s 148 of the Act had been issued beyond the period of three years from the end of the relevant assessment years and CIT was required. For ready relevant provision of section 151 is reproduced as under: 151. Specified authority for the purposes of section 148 and ) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed ) Principal Chief Commissioner or Principal Director General or is no Principal Chief Commissioner or Principal eral, Chief Commissioner or Director General, it more than three years have elapsed from the end of the relevant Before us, the Ld. counsel for the assessee has referred to para Act issued on 29.07.2022 where it is 4, Mumbai was obtained vide his letter dated 26.07.2022. Since notice u/s 148 of the Act issued beyond the period of three years, the approval whereas approval has been obtained from the PCIT and therefore, approval not being law notice u/s 148 issued in the case of the assessee is liable to be quashed. Identical issue came up before the Tribunal in the case of 3551/Mum/2024 for assessment year 2017 Tribunal held similar finding. The relevant part of the decision is reproduced as under: “7. On bare reading of the above extract of the judgment of Hon'ble Supreme Court in the case of find that the Hon'ble Supreme Court had clarified as under (a) Under new regime introduced by the Assessing Officer was required to obtain prior approval or sanction of the 'Specified Authority' at four stages at first stage under Sectio Section 148A(b), at third stage under Section 148A(d), and at fourth stage under (supra) the Hon'ble Supreme Court waived off the requirement of obtaining prior approval under section 148A(a) and 148A(b) of the Act only. Therefore, the Assessing Officer was required to obtain prior approval of the 'Specified Authority' according to Section 151 order under Section 148A(d) or issuing a notice under 148. (b) Under new regime if income escaping assessment is more than Rupees 50 lakhs a reassessment notice could be issued after expiry of three years from the end of the relevant previous year only after obtaining the prior approval of the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. (c) The test to determine whether TOLA will apply to of the new regime is this: if the time limit of three y end of an assessment year falls between 20th March 2020 and 31st March 2021, then the 'Specified Authority' under 151(i) has an extended time till 30th June 2021 to grant approval. (d) Section 151(ii) authority if more than three years have elapsed Assessment Year 2017-18 from the end of the relevant assessment year. Thus, non-complia Ajay Multi Projects Pvt. Ltd ITA No. 587/MUM/2025 in the case of the assessee is liable to be quashed. Identical issue came up before the Tribunal in the case of 3551/Mum/2024 for assessment year 2017-18 wherein the Tribunal held similar finding. The relevant part of the decision is under: 7. 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 (a) Under new regime introduced by the Finance Act, 2021 Assessing Officer was required to obtain prior approval or sanction of the 'Specified Authority' at four stages - at first stage under Section 148A(a), at second stage under Section 148A(b), at third stage under Section 148A(d), and at fourth stage under Section 148. In the case of Ashish (supra) the Hon'ble Supreme Court waived off the requirement of obtaining prior approval under section 148A(a) and of the Act only. Therefore, the Assessing Officer was o obtain prior approval of the 'Specified Authority' Section 151 of the new regime before passing an order under Section 148A(d) or issuing a notice under (b) Under new regime if income escaping assessment is more than Rupees 50 lakhs a reassessment notice could be issued after expiry of three years from the end of the relevant previous year only after obtaining the prior approval of the Principal issioner or Principal Director General or Chief Commissioner or Director General. (c) 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 has an extended time till 30th June 2021 to grant Section 151(ii) of the new regime prescribes a higher level of authority if more than three years have elapsed Assessment 18 from the end of the relevant assessment year. compliance by the assessing officer with the strict Ajay Multi Projects Pvt. Ltd 8 ITA No. 587/MUM/2025 in the case of the assessee is liable to be quashed. Identical issue came up before the Tribunal in the case of in ITA No. 18 wherein the Tribunal held similar finding. The relevant part of the decision is 7. On bare reading of the above extract of the judgment of (supra), we find that the Hon'ble Supreme Court had clarified as under: Finance Act, 2021 Assessing Officer was required to obtain prior approval or n 148A(a), at second stage under Section 148A(b), at third stage under Section 148A(d), and at Ashish Agarwal (supra) the Hon'ble Supreme Court waived off the requirement of obtaining prior approval under section 148A(a) and Section of the Act only. Therefore, the Assessing Officer was o obtain prior approval of the 'Specified Authority' of the new regime before passing an order under Section 148A(d) or issuing a notice under Section (b) Under new regime if income escaping assessment is more than Rupees 50 lakhs a reassessment notice could be issued after expiry of three years from the end of the relevant previous year only after obtaining the prior approval of the Principal issioner or Principal Director General or Chief Section 151 ears from the end of an assessment year falls between 20th March 2020 and 31st March 2021, then the 'Specified Authority' under Section has an extended time till 30th June 2021 to grant of the new regime prescribes a higher level of authority if more than three years have elapsed Assessment 18 from the end of the relevant assessment year. nce by the assessing officer with the strict time limits prescribed under to issue a notice under (e) Grant of sanction by the appropriate authority is a precondition for the assessing officer to assume jurisdiction under section 148 8. In the present case the perio Assessment Year 2017 2021. The expiry date fell during the time period of 20th March 2020 and 31st March 2021, contemplated under TOLA. Resultantly, the authority specified under of the new regime could have granted sanction till 30 th June 2021. On perusal of the order, dated 30/07/2022, passed under Section 148A(d) order was passed after taking approval from Principal Commissioner of Income Tax. Since the aforesaid order was passed after the expiry of 3 years f Assessment Year 2017 authority specified under Chief Commissioner or Chief Commissioner) was required to grant approval. We note that even the notice, dated 30/07/2022, was issued under regime) after obtaining the prior approval of the Principal Commissioner of Income Tax. Accordi the present case the approval has been obtained by authority specified under authority specified under 9. The non-compliance by the Assessing Officer with the provisions Assessment Year 2017 148A(d) read with jurisdiction of the Assessing Officer to issue a notice under Section 148 30/07/2022 passed under consequential reassessment proceedings and the order, dated 25/05/2023, passed under of the Act are quashed as bad in law being violative of the provisions contained in Section 148A(d), Section 151(ii) Assessee is allowed and accordingly, all the grounds raised by the Revenue in the departmental appeal in relation to the relief granted by the CIT(A) on merits are dismissed as having been rendered infructuous. Ajay Multi Projects Pvt. Ltd ITA No. 587/MUM/2025 time limits prescribed under section 151 affects their jurisdiction to issue a notice under section 148 (e) Grant of sanction by the appropriate authority is a precondition for the assessing officer to assume jurisdiction section 148 to issue a reassessment notice. 8. In the present case the period of 3 years from the end of the Assessment Year 2017-2018 fell for completion on 31st March 2021. The expiry date fell during the time period of 20th March 2020 and 31st March 2021, contemplated under Section 3(1) TOLA. Resultantly, the authority specified under Section 151(i) of the new regime could have granted sanction till 30 th June 2021. On perusal of the order, dated 30/07/2022, passed Section 148A(d) of the Act we find that the aforesaid order was passed after taking approval from Principal Commissioner of Income Tax. Since the aforesaid order was passed after the expiry of 3 years from the end of the Assessment Year 2017- 2018, as per the new regime, the authority specified under Section 151(ii) of the Act (i.e. Principal Chief Commissioner or Chief Commissioner) was required to ant approval. We note that even the notice, dated 30/07/2022, was issued under Section 148 of the Act (new regime) after obtaining the prior approval of the Principal Commissioner of Income Tax. Accordingly, we conclude that in the present case the approval has been obtained by authority specified under Section 151(i) of the new regime instead of the authority specified under Section 151(ii) of the new regime. compliance by the Assessing Officer with the provisions Assessment Year 2017-18 contained in Section 148A(d) read with Section 151(ii) of the new regime affects the jurisdiction of the Assessing Officer to issue a notice under of the Act. Accordingly, the order, dated 30/07/2022 passed under Section 148A(d) of the Act, the consequential reassessment proceedings and the order, dated 25/05/2023, passed under Section 147 read with Section 144B of the Act are quashed as bad in law being violative of the provisions contained in Section 148A(d), Section 148 Section 151(ii) of the Act. Thus, Cross-Objection raised by the Assessee is allowed and accordingly, all the grounds raised by the Revenue in the departmental appeal in relation to the relief granted by the CIT(A) on merits are dismissed as having been dered infructuous.” Ajay Multi Projects Pvt. Ltd 9 ITA No. 587/MUM/2025 affects their jurisdiction (e) Grant of sanction by the appropriate authority is a precondition for the assessing officer to assume jurisdiction d of 3 years from the end of the 2018 fell for completion on 31st March 2021. The expiry date fell during the time period of 20th March Section 3(1) of Section 151(i) of the new regime could have granted sanction till 30 th June 2021. On perusal of the order, dated 30/07/2022, passed of the Act we find that the aforesaid order was passed after taking approval from Principal Commissioner of Income Tax. Since the aforesaid order was rom the end of the 2018, as per the new regime, the of the Act (i.e. Principal Chief Commissioner or Chief Commissioner) was required to ant approval. We note that even the notice, dated of the Act (new regime) after obtaining the prior approval of the Principal ngly, we conclude that in the present case the approval has been obtained by authority of the new regime instead of the of the new regime. compliance by the Assessing Officer with the 18 contained in Section of the new regime affects the jurisdiction of the Assessing Officer to issue a notice under of the Act. Accordingly, the order, dated of the Act, the consequential reassessment proceedings and the order, dated Section 144B of the Act are quashed as bad in law being violative of the Section 148 and Objection raised by the Assessee is allowed and accordingly, all the grounds raised by the Revenue in the departmental appeal in relation to the relief granted by the CIT(A) on merits are dismissed as having been 4.3 In view of the aforesaid discussion, the reassessment proceedings in the case of the assessee are quashed. The ground No. 5 of the appeal of the assessee is accordingly allowed. 4.4 Since we have already quashed the reassessment p the other grounds raised by the assessee are rendered merely academic and therefore we are not adjudicating upon the same. 5. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on Sd/ (KAVITHA RAJAGOPAL JUDICIAL MEMBER Mumbai; Dated: 27/03/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Ajay Multi Projects Pvt. Ltd ITA No. 587/MUM/2025 In view of the aforesaid discussion, the reassessment proceedings in the case of the assessee are quashed. The ground No. 5 of the appeal of the assessee is accordingly allowed. Since we have already quashed the reassessment p the other grounds raised by the assessee are rendered merely academic and therefore we are not adjudicating upon the same. In the result, the appeal of the assessee is allowed. nounced in the open Court on 27/03/2025. Sd/- RAJAGOPAL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Ajay Multi Projects Pvt. Ltd 10 ITA No. 587/MUM/2025 In view of the aforesaid discussion, the reassessment proceedings in the case of the assessee are quashed. The ground No. 5 of the appeal of the assessee is accordingly allowed. Since we have already quashed the reassessment proceedings, the other grounds raised by the assessee are rendered merely academic and therefore we are not adjudicating upon the same. In the result, the appeal of the assessee is allowed. /03/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai "