DEEPAK AGARWAL,DELHI V. DCIT, CENTRAL CIRCLE-25, DELHI

ITA 2306/DEL/2025

AI Insights

The case involves multiple appeals by the assessee, Deepak Agarwal, against the reassessment orders issued by the Deputy Commissioner of Income Tax for various assessment years. The primary legal issues revolved around the validity of the reopening of assessments under Section 148 of the Income Tax Act, the non-supply of sanction and materials, and the mechanical approval process by the tax authorities. The Tribunal examined each assessment year separately, considering the specific legal and factual circumstances, and found substantial procedural lapses in the reassessment process, leading to the quashing of the orders.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 779778 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 08-04-2025
• Other Referred Cases: Sunil Kumar ITA No.2429/Del/2023, Tia Enterprises Pvt Ltd vs ITO, Pasari Casting & Rolling Mills Ltd vs Income Tax Department, Micro Marbles Pvt. Ltd vs ITO, Ganesh Ganaga Investment [2025] 173 taxmann.com 878 (Delhi), UOI vs Rajeev Bansal, Managing Director Chhattisgarh State Cooperative Bank Marayadit vs Zila Sahakarikendriya Bank Maryadit, Kilasho Devi Burman v. Commissioner of Income Tax, W.B., Calcutta, Reuters Asia Pacific Ltd. v. DCIT, Prakash Krishnavtar Bhardwaj vs ITO, PCIT vs Prahalad Singh, SBC minerals Pvt Ltd vs ACIT, The Pr. Commissioner of Income Tax-7 vs. Pioneer Town Planners Pvt. Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT JAIN
• Assessee Lawyers: KAPIL GOEL
• Keywords: Set aside; Invalid notice; Reassessment proceedings; Question of law; Unexplained cash credit; Unexplained expenditure; Unexplained investment; Income from undisclosed sources; Onus to prove; Period of limitation; Search and seizure; Accommodation entries; Block assessment; Reason to believe; Tangible material; Bogus
• Section: 147; 148; 143(3); 132; 153A; 68; 133(6)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘A’: NEW DELHI BEFORE SHRI S RIFAUR RAHMAN, ACCOUNTNAT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA Nos.2305, 2306, 2308 and 2309/Del/2025 [Assessment Years: 2013-14, 2014-15, 2018-19 and 2021-22] Deepak Agarwal, C/o- Kapil Goel, Adv,, F-26/124. Sector-47, Rohini, New Delhi-110085 Vs Deputy Commissioner of Income Tax, Central Circle-25, New Delhi/ NCC DIT(S) Jhandewalan Extn. New Delhi PAN-ADKPA0795K Assessee Revenue Assessee by Dr. Kapil Goel, Adv. Revenue by Shri Amit Jain, CIT-DR Date of Hearing 09.09.2025 Date of Pronouncement 15.10.2025 ORDER PER ANUBHAV SHARMA, JM, These four appeals have been preferred by assessee in ITA No.2305/Del/2025 for AY 2013-14, ITA No.2306/Del/2025 for Assessment year 2014-15, ITA No.2308/Del/2025 for Assessment Year 2018-19 and ITA No.2309/Del/2025 for AY 2021-22, respectively, arising out of the appeals decided by the Ld. CIT(A) having following particulars:- Sl. No. ITA No. Jurisdictional CIT(A), Appeal No. and date of order Assessment Year Date of Assessment order Jurisdictional Assessing Officer and under section 1. 2305/Del/2025 CIT(A)-29, New Delhi dated 31.03.2025 in Appeal no.10160/2012-13 2013-14 31.03.2022 DCIT, Central Circle-25, New Delhi u/s 147 of the Act Printed from counselvise.com 2 ITA No.2305, 2306, 2308 and 2309/Del/2025 2. 2306//Del/2025 CIT(A)-29, New Delhi dated 31.03.2025 in Appeal no.10588/2013-14 2014-15 31.05.2023 DCIT, Central Circle-25, New Delhi, u/s 147/148 of the Act 3. 2308/Del/2025 CIT(A)-29, New Delhi dated 31.03.2025 in Appeal No.10461/2017-18 2018-19 08.09.2021 DCIT, Central Circle-25, New Delhi, u/s 143(3) of the Act 4. 2309/Del/2025 CIT(A)-29, New Delhi dated 31.03.2025 in Appeal no.10079/2020-21 2021-22 11.02.2023 DCIT, Central Circle-25, New Delhi u/s 143(3) of the Act 2. We have heard the rival sides and perused the matter on record and taken into consideration the written submission. The cases were heard together as they are based on same set of facts and quite many issues are common. The ld. Counsel for assesse has primarily argued on legal issues challenging the impugned orders on various grounds to allege that the impugned assessments are not in accordance with mandate of the Act while ld. DR has defended the issues submitting that these are minor abrasions and no prejudice is established. It was also contended that grounds were not raised at earliest. 2.1 As for convenience, wherever the basic facts relevant to be considered for each year under consideration are that in AY 2018-19 the case of the assessee was taken up for scrutiny assessment u/s 143(3) of the Act while in AY 2013-14 and 2014-15 although assessments were earlier completed u/s 153A of the Act, subsequently, the cases were reopened by way of a notice u/s 148 of the Act issued on 31.03.2021 in AY 2013-14 and on 13.04.2021 in AY 2014-15. Printed from counselvise.com 3 ITA No.2305, 2306, 2308 and 2309/Del/2025 Thereafter, in AY 2020-21, on the basis of search and seizure operation conducted on Shri Deepak Aggarwal on 17.11.2021, the case of the assessee was taken up for compulsory scrutiny. 2.2 The additions in AY 2013-14 pertained to alleged unexplained income on the basis that credit entries to the extent of Rs.2,89,98,057/- were suspicious. In AY 2014-15 addition of Rs.31,50,213/- u/s 68 of the Act was made as commission income on the basis that there were unexplained credit entries for which the case was reopened for reassessment. The assessee was found to be in the business of providing accommodation entries and the ld. AO observed that for the year under consideration after taking into consideration sales and purchase amount of Rs.21,05,78,920/- and Rs.10,44,42,381/-, respectively @ 1%, of this addition of Rs.31,50,213/- was made u/s 68 of the Act. In AY 2018- 19, addition of Rs.1,91,80,846/- was made as commission for providing accommodation entries. In AY 2021-22, addition of Rs.15,25,45,445/- was also made on account of the commission income. The, additions were sustained by the ld. First Appellate Authority for which the assessee is in appeal and primarily, before us, the ld. Counsel has argued on the grounds which are legal in nature and we take up the same issue wise. 3. The first issue raised is in regard to AY 2013-14 and 2014-15, as to whether the reopening is bad when admittedly the assessee was not supplied copy of sanction u/s 151 of the Act and the stated material relied upon in Printed from counselvise.com 4 ITA No.2305, 2306, 2308 and 2309/Del/2025 reasons u/s 148(2) of the Act along with the reasons recorded u/s 148(2) of the Act. 3.1 In AY 2013-14, brief factual background is that of general reopening action u/s 148 of the Act (under old regime prior to 01.04.2021) vide impugned jurisdictional notice u/s 148 of the Act dated 31.03.2021. Assessee filed regular return u/s 139(1) of the Act on 30.09.2013 with income declared of Rs 17,73,340. First assessment u/s153A/143(3) of the Act was framed on 29.12.2017 for subject AY with assessed income of Rs 649,01,135. 3.2 In AY 2014-15, the case is based on general reopening action u/s 148 of the Act (under new regime after 01.04.2021) vide impugned jurisdictional notice u/s 148 of the Act dated 30.07.2022 vide order u/s 148A(d) of the Act dated 28.07.2022. The subject matter of this reopening u/s 148 of the Act is based on certain general information received at end of Ld AO from DDIT (inv) unit 2(2) as referred in impugned order u/s 148A(d) of the Act dated 28.07.2022 and impugned order u/s 148 of the Act dated 31.05.2023. Assessee filed regular return u/s 139(1) on 27.09.2014 with income declared of Rs.18,61,880. First assessment u/s153A/143(3) of the Act was framed on 29.12.2017 for subject AY with assessed income of Rs.735,12,908. Though first notice u/s 148 of the Act was issued on 13.04.2021 but same was converted to new law notice u/s 148A of the Act vide impugned order u/s 148A(d) of the Act and notice u/s 148 of the Act dated 28.07.2022 and 30.07.2022. Assessee was issued SCN u/s 148A(b) of the Act on 25.05.2022 post decision in Ashish Aggarwal case Printed from counselvise.com 5 ITA No.2305, 2306, 2308 and 2309/Del/2025 (2022) 138 taxmann.com 64. Assessee filed detailed jurisdictional objection to reopening action u/s 148 (u/s 148A(c) of the Act which is referred in impugned assessment order. Then vide impugned order passed u/s 148A(d) of the Act on 28.07.2022 present case is treated as fit for reopening u/s 148 of the Act with alleged income escaping assessment being quantified at Rs 49.69 crores. 4. In regard to the issue of non-supply of sanction u/s 151 of the Act along with the reasons u/s 148(2) of the Act, the ld. Counsel has relied the decision of the coordinate Bench in the case of Sunil Kumar ITA No.2429/Del/2023, order dated 15.04.2025 wherein the coordinate Bench has held as follows:- “Further the Learned AR before me argued that the approval obtained in terms of section 151 of the Act need to be furnished to the assessee along with the reasons recorded, which was not done in the instant case by the Learned AO, thereby becoming fatal to the re-assessment proceedings itself. I find that this issue is no longer res integra in view of the decision of the Hon‟ble Jurisdictional High Court in the case of Tia Enterprises Pvt Ltd vs ITO reported in 468 ITR 5 (Del) wherein it was held as under:- “13. To our minds, the approval granted by the statutory authorities, as required under the provisions of the Act, has to be furnished to an assessee along with the reasons to believe. The statutory scheme encapsulated in the Act provides that reassessment proceedings cannot be triggered till the Assessing Officer has reasons to believe that income, which is otherwise chargeable to tax, has escaped assessment and the reasons recorded by him are placed before the specified authority for grant of approval to commence the process of reassessment.” 4.1. In the aforesaid case, the Hon‟ble Delhi High Court also took note of the fact that the approval under section 151 of the Act was not obtained by that Assessing Officer as otherwise there could be no reason as to why the same was not supplied to that assessee along with the reasons. Hence it is very clear that the approval obtained under section 151 of the Act need to be supplied along with the reasons to the assessee for further course of action. Since the same is not done in the instant case before me, it becomes fatal to the entire reassessment proceedings itself and accordingly the re- assessment proceedings deserve to be quashed accordingly. I find that the aforesaid decision of Hon‟ble Delhi High Court has been subjected to Printed from counselvise.com 6 ITA No.2305, 2306, 2308 and 2309/Del/2025 further appeal by the revenue before the Hon‟ble Supreme Court and Special Leave Petition (SLP) of the revenue was dismissed which is reported in 468 ITR 10 (SC) by a speaking order by observing as under:- “2. In view of the categorical finding recorded in para 13 of the impugned judgement and in the facts of the case, no case for interference is made out in exercise of our jurisdiction under article 136 of the Constitution of India. The special leave petition is accordingly dismissed.” 5. Respectfully following the aforesaid decisions, I hold that the entire assumption of jurisdiction under section 147 of the Act in the instant case is flawed and accordingly the reassessment proceedings are hereby quashed.” 5. On fatal impact of non supply of relied upon material with reasons u/s148(2) of the Act, reference was made by ld. Counsel to Coordinate bench decision in ITO vs B.C. Enterprises ITA No.4972/Del/2024 (CO 08/DEL/2025) for AY 2018-2019 decided on 04.04.2025. Further reference was made to Hon’ble Delhi High court decision in case of Saraswati Petrochem Pvt. Ltd vs ITO 470 ITR 47, where in for this issue, the Hon’ble Court observed as follows:- “The AO had not furnished either a copy of the letter dated 12.03.2018 received from the ITO (Nahan) or the copy of the intimation received from the ADIT(Inv)/Unit-4(2), New Delhi along with the document containing the reason to believe. Likewise, the AO did not supply copies of the FIR and chargesheet while furnishing the document containing the “reason to believe.” “17.1 The first and foremost principle of law, to which the AO must be wedded, is the obligation cast on him to furnish material and information that helped him to form a belief that income, otherwise chargeable to tax, had escaped assessment. Admittedly, the AO had in his possession a letter dated 12.03.2018 addressed to him by ITO (Nahan), which in turn contained the intimation supplied by ADIT (Inv)/Unit-4(2). It appears that the information furnished suggested that cash deposits had been made in the account bearing no. 083005000211 maintained with the ICICI bank by Ram Singh, the proprietor of Para Impex Chem, out of which monies were remitted via RTGS to the two bank accounts of the petitioner/assessee Printed from counselvise.com 7 ITA No.2305, 2306, 2308 and 2309/Del/2025 maintained with HDFC Bank. Neither the letter nor the intimation of the ADIT(Inv)/Unit-4(2), New Delhi was furnished to the petitioner/assessee.” “19. We are of the opinion that the AO did not have the tangible material on record that could have persuaded him to form a belief that income, otherwise chargeable to tax, had escaped assessment. The AO did not carry forward the enquiry process once he had received communication from ITO (Nahan). As noticed above, the AO did not furnish either the letter dated 12.03.2018 received from ITO (Nahan) or the relevant intimation received from the ADIT(Inv)/Unit-4(2) New Delhi, along with the document containing “reason to believe.‟ Had the AO furnished the documents, he would have been able to reach a firmer conclusion that crossed the threshold of suspicion and conjecture.” 5.1 Hon’ble Rajasthan High court decision in case of Micro Marbles Pvt. Ltd vs ITO 457 ITR 569, was also relied where, Hon’ble High Court held as follows:- “The petitioner in the grounds to the petition has taken a categorical stand that the respondents failed to furnish the information which formed the basis for reopening the assessment. It was not even provided with the statement of Deepak Jain, on which heavy reliance was being placed. There is no averment in the reply of the respondents anywhere that any such information or a copy of the statement was supplied to the petitioner along with the reasons to believe. 28. In view of the above, the reasons to believe, as supplied to the petitioner, on the face of it are incomplete and do not afford the petitioner due and proper opportunity to file objections against such reassessment. The non-supply of the above material is within the teeth of the directions of the Division Bench of the Delhi and Bombay High Courts. 29. The submission of Shri Bissa that reasons to believe cannot be equated with the final conclusion and as long as the Assessing Officer has sufficient material to demonstrate that he had bonafidely formed the opinion that the income chargeable to tax has escaped assessment, the requirement of law stands satisfied is of no avail as there are no two opinions on the above aspect. Sufficiency of material is one thing and supply of the same is another, which is mandatory in nature. Therefore, the non-supply of the material referred to in the reasons to believe would be enough to render the proceedings bad, even though the material for forming the opinion may be sufficient. 30. The argument of Shri Bissa is that information furnished by the Deputy Director of Income Tax, Investigation, by itself is sufficient for reopening Printed from counselvise.com 8 ITA No.2305, 2306, 2308 and 2309/Del/2025 the proceedings, more particularly when the said information was confirmed from other sources. Again the sufficiency of the information is not in question, nor its confirmation. What is questionable is the effect of its non-supply, to which there is no answer. 31. Thus, in the light of the decisions of the Delhi and the Bombay High Courts, as referred to above, the non-supply of the material, especially the documents of entry in the books of M/s. Sanmatri GemsPvt. Ltd. and the statement of Deepak Jain recorded under Section 132 (4) of the Act, is sufficient to vitiate the proceedings.” 6. Second issue is for AY 2013-14 and AY 2018-19 as the ld. counsel has raised a ground that alleged unexplained income has been added in the hands of the assessee without any provision being referred qua the same. In this regard it is submitted by ld. Counsel that under 1961 Act relevant provisions of unexplained income are contained under sec 68 to sec 69D of 1961 Act which are having different and special conditions . These provisions cannot be used in interchangeable manner. The importance of particular provision being referred in assessment order and also in Show cause notice prior to assessment order, cannot be ignored. He contended that in various coordinate benches decision it is held that CIT(A) if changes the provision of addition u/s 68 etc. then same is fatal and same is outside scope of power of CIT(A), so present case stands on stronger footing where no provision is referred at any stage. 6.1 In this context, as relied by ld. Counsel, we find that Hon’ble Jharkhand High Court in case of Pasari Casting & Rolling Mills Ltd vs Income Tax Department 436 ITR 469, has held as follows:- “As stated herein above that the recorded reason/impugned Assessment Order is silent under which provision of the Act the additions are sought to be made. It is well settled that the reasons cannot be supplemented by Printed from counselvise.com 9 ITA No.2305, 2306, 2308 and 2309/Del/2025 assessment Order or Affidavit. The recorded reason is totally silent whether the amount sought to be taxed is ‘income’ of the Petitioner and whether the addition is sought to be made on account of Cash Credit (Section 68), Unexplained Investments (Section 69), Unexplained Money (Section 69A), Amount of Investment, etc. not fully disclosed in books of account (Section 69B), Unexplained Expenditure, etc. (Section 69C). The requirement of each of the aforesaid sections are different and the rules of evidence and burden of proof are also different, hence unless the Petitioner to put the notice as to the exact contravention or provisions of law under which assessment or additions are sought to be made, the Petitioner cannot defend his case” 7. Third issue is specific to AY 2013-14, that the reasons u/s 148(2) of the Act are based on very vague and non-specific allegations without any necessary particulars about how the assessee has received bogus entries. There is no specific assertion about nature of deposit. Then it leads to conclusion that merely the investigation wing report was relied and there was otherwise no live link between the information and the reasoning. 7.1 Though Ld. DR has relied the decision of Hon’ble Delhi High Court in Ganesh Ganaga Investment [2025] 173 taxmann.com 878 (Delhi), to submit that reasons or reopening and at times of approval are demonstrative of due application of mind, however, as we go through the copy of reasons available at page 2-4 of the PB, we find that it only describes and narrates the details of information. As under the headings “Inquiries made by the AO as a sequel to information collected or received” the AO has merely mentioned of the fact of issuance of notice u/s 133(6) of the Act. However, it mentions issuance of notice to the assessee only. What were enquires is left ambiguous. The case is that amounts were received in the firm account of M/s Royal Traders which is Printed from counselvise.com 10 ITA No.2305, 2306, 2308 and 2309/Del/2025 managed and controlled by Shri Deepak Agarwal/Nem Chand Gupta. The reasons do not demonstrate any application of mind but show how repetitively the facts of information alone are reproduced with such changes here and there. 8. Fourth Issue is for AY 2014-15, where in the ld. counsel has raised a ground that reopening u/s 148 of the Act cannot be sustained when there is a total variation between the reasons recorded u/s 148A of the Act and the final assessment order. Reliance was placed on Hon’ble Punjab and Haryana High court decision in case of Dinesh Singla 474 ITR 532, where Hon’ble High Court has held as follows; “When an authority is empowered to exercise and pass orders in terms of the Act, it has to remain within four corners of the manner in which the said power is required to be exercised. Once the basis of reopening of the case u/s 147 of the Act is non disclosure of income under capital gain and non disclosure of source of investment , the AO has no authority available in law to pass order holding that the income had escaped assessment following as “adventure in nature of trade”. 8.1 Similarly Hon’ble Delhi High Court in ATS Infrastructure Ltd vs ACIT 473 ITR 595 and Banyan Real Estate Fund Mauritius vs ACIT 474 ITR 466 have upheld same principle. Admittedly no adverse inference is drawn on reopening ground of Rs 49.69 cr in final assessment order. Admittedly The alleged estimated commission income as finally added in impugned assessment is no where subject matter of reopening order u/s 148A(D) of the Act. 9. Fifth issue is also relevant to AY 2014-15, as the ld. Counsel has asserted that the sole effective addition of Rs.31,50,213/- being less than Printed from counselvise.com 11 ITA No.2305, 2306, 2308 and 2309/Del/2025 monetary threshold of Rs.50 lakhs u/s 149(1)(b) of the Act, makes the reopening bad in law. On this aspect it was submitted that surviving amount of sole effective addition (Rs 31,50,213) being less than minimum prescribed threshold of Rs 50 lacs u/s 149(1)(b) of the Act makes the reopening bad. Hon’ble Patna high court decision in case of Ankit Agarwal vs PCIT (18.04.2025) CWJ 5202 of 2024 and coordinate Delhi bench decision in case of Santosh (dated 29.11.2024 ITA 2025/Del/2024) were relied to contend that as per spirit of sec 149(1)(b) of the Act, once basis of reopening itself is found to be non surviving, the same is vitiated. We find substance in the contention as the alleged estimated commission income, finally added in impugned assessment, is nowhere subject matter of reopening order u/s 148A(D) of the Act. 10. Sixth issue is specific to AY 2021-22, and the ld. counsel has raised a ground that the impugned assessment u/s 143(3) of the Act is vitiated as the same is on the basis of the search action on the assessee dated 17.11.2021 and is contrary to the mandate of Explanation (2)(i) of section 148 of the Act. In AY 2021-22, assessment for this particular year is subject to search action u/s 132 of the Act on 17.11.2021. Assessee filed regular return u/s 139(1) of the Act on 15.03.2022 with income declared of Rs.37,69,390. Assessee case for this year was selected for scrutiny u/s 143(2) of the Act vide notice dated 03.06.2022. Ld. Counsel has submitted that it could only be taken u/s 148 Expl. 2 under deemed escapement clause and not u/s 143(2)/143(3) of the Act. The above Printed from counselvise.com 12 ITA No.2305, 2306, 2308 and 2309/Del/2025 scrutiny action was founded /initiated on basis of impugned approval of PCIT (Central) Delhi dated 28.06.2022. This approval is also subject matter of assail from assessee side being rubber stamp/mechanical and with only “approved” remarks and “unsigned” on face of it. Then centralization order u/s 127 of the Act was passed on 03.01.2022 by PCIT Central. Admittedly the impugned assessment action is made u/s 143(3) of the Act vide impugned assessment order dated 11.02.2023. Same mentions that approval is taken on 15.07.2022 from Range Head. 10.1 It is submitted by ld. Counsel that after 01.04.2021 vide Finance Act 2021, legislature made a policy shift in assessment of search related matters and search cases which were earlier separately assessed u/s 153A/153C of the Act respectively for searched and non searched person, said search related cases are brought under ambit of Sec 148 of the Act by way of reopening under income escaping assessment vide Explanation 2 to sec 148 of the Act which in turn deals with deemed escapement cases. The relevant date is search action initiated after 01.04.2021. Notably for search action after 01.09.2024, again block assessment scheme u/s 158B to Sec 158 BI has been inserted vide Finance No 2 Act 2024 w.e.f 01.09.2024. It was submitted that in case of assesse search action u/s 132 of the Act is after 01.04.2021 and before 01.09.2024 that is , 17.11.2021. So relevant applicable provision could be only Section 148 read with Explanation 2 clause (i) covering deemed escapement clause. Thus present Printed from counselvise.com 13 ITA No.2305, 2306, 2308 and 2309/Del/2025 action of revenue by taking recourse to Section 143(2)/143(3) of the Act, which is general provision is totally unlawful and invalid. 10.2 Ld. Counsel submitted that effect has to be given to words “deemed to have escaped assessment” under Expl. 2 to sec 148 of the Act. Further present situation is same where under erstwhile assessment u/s 153A of the Act, courts have held that for assessment falling u/s 153A of the Act, recourse cannot be had to general provision u/s 143(3) of the Act. Further the legislature has used word “shall” in Explanation 2 to Section 148 of the Act, which supports assessee’s contention. This is more so when entire impugned assessment u/s 143(3) of the Act is solely founded on information /material emanating from search action u/s132 of the Act and it is not a case of general assessment based on routine or non search issues. Reference was made to Hon’ble Apex court decision in case of UOI vs Rajeev Bansal 469 ITR 46, where it has been held that; “If a statute expressly confers a power or imposes a duty on a particular authority, then such power or duty must be exercised or performed by that authority itself. Further, when a statute vests certain power in an authority to be exercised in a particular manner, then that authority has to exercise its power following the prescribed manner. Any exercise of power by statutory authorities inconsistent with the statutory prescription is invalid.” 10.3 Ld. Counsel has relied Hon’ble Apex Court decision in case of Managing Director Chhattisgarh State Cooperative Bank Marayadit vs Zila Sahakarikendriya Bank Maryadit 2020 6 SCC 411 to submit that the general provision operates, save and except in situations covered by the specific Printed from counselvise.com 14 ITA No.2305, 2306, 2308 and 2309/Del/2025 provision. The rationale behind this principle of statutory construction is that were there appears a conflict between two provisions, it must be presumed that the legislature did not intend a conflict and a subject-specific provision governs those situations in exclusion to the operation of the general provision. 11. Seventh issue concerns to AY 2021-22 only, as the ld. counsel has submitted that the foundation/approval of PCIT, Central, dated 28.06.2022 being admittedly, unsigned (without manual or digital signature) and only with a remark, ‘approved’ same makes the approval bad in law. 11.1 Ld. Counsel has submitted that approval of PCIT (Central) dated 28.06.2022 which is basis of initiating proceedings u/s 143(2) of the Act is admittedly without any manual or digital signature and same is only based on mere name/designation written on it. Further only remarks which are noted by approving authority are “APPROVED”. The question that whether unsigned and mere “approved” remarks approval can be countenanced, is subject matter of intense judicial scrutiny and debate and is answered by the Hon’ble Supreme Court in M/s. M.M. Rubber and Company1992 Supp (1) SCC 471 by laying as follows:- “12. It may be seen therefore, that, if an authority is authorised to exercise a power or do an act affecting the rights of parties, he shall exercise that power within the period of limitation prescribed therefor. The order or decision of such authority comes into force or becomes operative or becomes an effective order or decision on and from the date when it is signed by him….” (Emphasis Supplied). Hon’ble Supreme court decision in case of Kilasho Devi Burman v. Commissioner of Income Tax, W.B., Calcutta(1996) 219 ITR 214 is also relied. Then reliance is placed on Reuters Asia Pacific Ltd. v. DCIT [2024] 205 ITD 31/ 228 TTJ 165/110 Printed from counselvise.com 15 ITA No.2305, 2306, 2308 and 2309/Del/2025 ITR 609 (Mum)(Trib), where in it was held that signing of an assessment order by Assessing Officer is a mandatory and not curable procedural defect. Then reliance was placed on Hon’ble Bombay High Court decision in case of Prakash Krishnavtar Bhardwaj vs ITO in WP No 9835/2022 order dated 09.01.2023 (451 ITR 27) the Hon’ble Court held as follows: “19. Applying the ratio of the judgment of the Calcutta High Court in B.K. Gooyee and Aparna Agency (P.) Ltd. (supra) to the facts of the present case, the signature of the Assessing Officer admittedly not having been affixed on the notice issued u/s.148 of the Act, the notice itself would be invalid and consequently, the Assessing Officer could not assume jurisdiction to proceed in the matter in terms of section 148 of the Act. The Madhya Pradesh High Court in Umashankar Mishra (supra) has dealt with a similar fact situation where the first substantial question of law dealt with in that case had considered the effect of whether an unsigned notice can be considered as an irregularity or clerical mistake. The Madhya Pradesh High Court after making reference to the conclusions drawn in B.K.Gooyee (supra) by the Calcutta High Court, has taken the view, that a notice without a signature affixed on it is an invalid notice and is effectively no notice in the eyes of law. 20. The Madhya Pradesh High Court in Umashankar (supra) has further dealt with the second substantial question of law as to whether the Tribunal was right in holding that the absence of a signature on the notice constitutes a mistake or omission within the meaning of section 292B of the Act and while addressing itself to that question, has concluded that in the absence of a signature on the notice, the same would not constitute a mistake or omission and would not be curable under the provisions of section 292B of the Act. 21. We are, therefore, of the considered opinion that in the present case, the notice u/s.148 dated 02.04.2022 having no signature affixed on it, digitally or manually, the same is invalid and would not vest the Assessing Officer with any further jurisdiction to proceed to reassess the income ofthe petitioner. Consequently, the notice dated 02.04.2022 u/s.148 of the Act issued to the petitioner being invalid and sought to be issued after three years from the end of the relevant assessment year 2015-16 with which we are concerned in this petition, any steps taken by the respondents in furtherance of notice dated 21.03.2022 issued under clause (b) of section 148A of the Act and order dated 02.04.2022 issued under clause (d) of section 148A of the Act, would be without jurisdiction, and therefore, arbitrary and contrary to Article 14 of the Constitution of India. Consequently, we quash and set aside the notice dated 02.04.2022 issued by the respondents u/s.148 of the Act, order dated 02.04.2022 under clause (b) of section 148A of the Act and notice dated 21.03.2022 issued under clause (b) of section 148A of the Act.” Printed from counselvise.com 16 ITA No.2305, 2306, 2308 and 2309/Del/2025 11.2 Then ld. Counsel relied Hon’ble Karnataka High Court decision in case of Smt. Janaki Aenuga Vs ITO WP. No. 24076 OF 2023 (T-IT) decision dated 8.1.2024, where in Hon’ble High Court has held has follws; “7. As can be seen from the order, this Court has come to the categorical conclusion that the notice under Section 148A(b) ofthe IT Act, is not signed either physically or digitally and the same is illegal, invalid and inoperative and further proceedings pursuant thereto including the order under Section 148A(d) of the IT Act, penalty notices, orders, etc., deserve to the quashed.” 11.3 Reliance is then placed on Hon’ble Punjab & Haryana High court decision in case of PCIT vs Prahalad Singh dated 27.02.2020 (ITA No.91 of 2019), where in Hon’ble High Court has held as follows; “We find that the order of the Tribunal is correct. The mere fact that reasons exist on the file cannot sanctify them and the only way to ascertain whether the requirements under Section 147 of the Act have been met out would be at the very least that the assessing officer sign the same. Without signatures, the document becomes anonymous piece of paper to which no credence can be given. The action under Section 147 of the Act is quasi- judicial action and if it is permitted that such action can be done as anonymously, it would have very serious consequences in other cases also. If the Court accepts such pieces of paper who can tomorrow stop an assesse from substituting a signed paper with another unsigned paper? 11.4 On mechanical approval aspect of PCIT Central dated 28.06.2022 with only remarks “approved”, ld. Counsel again relied Hon’ble Delhi High court decision in case of SBC minerals Pvt Ltd vs ACIT 475 ITR 360, where the Hon’ble Court has held as follows; “15. It is evident that the approval order is bereft of any reasons. It does not even refer to any material that may have weighed in the grant of approval. The mere appending of the word “approved” by the PCCIT while granting approval under Section 151 to the re-opening under Section 148 is not enough. While the PCCIT is not required to record elaborate reasons, he has to record satisfaction after application of mind. The approval is a safeguard and has to be meaningful and not merely ritualistic or formal. Printed from counselvise.com 17 ITA No.2305, 2306, 2308 and 2309/Del/2025 The reasons are the link between material placed on record and the conclusion reached by the authority in respect of an issue, since they help in discerning the manner in which the conclusion is reached by the concerned authority. Our opinion in this regard is fortified by the decision of the Apex Court in Union of India vs. M.L. Capoor[AIR 1974 SC 87]. The grant of approval by PCCIT in the printed format without any line of reason does not fulfil the requirement of Section 151 of the Act” 11.5 Reliance is placed by ld. Counsel on Hon’ble Bombay High Court decision in case of Saraswat Cooperative Bank Ltd vs ACIT 473 ITR 205, where the Hon’ble Court has held as follows; “The requirement for sanction by a high-ranking official under Section 151, is an inherent check and balance in the statutory scheme of the Act. Such officers are expected to apply their mind to the facts and the applicable law and then accord sanction. In the instant case, the proposed reassessment was sanctioned by the Principal Commissioner of Income-tax, with the following remarks:- “Yes, I am satisfied with the reasons recorded by the A.O. for issuance of Notice u/s 148 of the I.T.Act, 1961.” [Emphasis Supplied] 23. The power to sanction reassessment under Section 151, is coupled with a duty to exercise such power reasonably, and not arbitrarily. It is trite law that absence of valid reasons constitutes arbitrariness. In the instant case, the entire process of according sanction demonstrates non- application of mind to the ingredients of Section 147, rendering the sanction to be arbitrary, calling for intervention by a writ court. Evidently, the proposal, the recommendation and the approval in the instant case was mechanical, without either application of mind to the law and the facts or even a modicum of how the ingredients of the law had been met. In short, the machinery under Section 151 completely failed” 11.6 Hon’ble Delhi High Court decision in case of The Pr. Commissioner of Income Tax-7 vs. Pioneer Town Planners Pvt. Ltd. order dated 20 February 2024 in ITA 91/2019] u/s151 (465 ITR 356), is also relied by ld. Counsel for the same proposition that approval should not show non application of mind. As in this case where the copy of approval in PB at Page. No. 40 shows in remark Column, approval is granted by mere words “Approved”. Printed from counselvise.com 18 ITA No.2305, 2306, 2308 and 2309/Del/2025 12. Based upon the aforesaid discussion, we are of the considered view that the ld. AR has successfully demonstrated that in AYs 2013-14 and 2014-15 there were failure on the part of the ld. tax authorities in not supplying the copy of sanction u/s 151 of the Act and the material referred in reasons u/s 148(2) of the Act and, further, in AY 2014-15 the impugned effective addition of Rs.31,50,213/- being less than the monetary threshold of Rs.50 lakhs u/s 149(1)(b) of the Act, that makes the assessments bad in law and are liable to be quashed. 12.1 As with regard to AY 2018-19, the ld. counsel has sufficiently demonstrated that the assessment order lacks mention of deeming provisions invoked. As it is not a case of one sort of accommodation entries, but, allegedly unaccounted income earned from laundering of funds for providing accommodation entries to the beneficiaries in the guise of unsecured loans, bogus sale and purchase bills were added to the total income of the assessee in the form of commission income that all the more needed indicating which of the relevant deeming provisions u/ss 68 to 69D of the Act have been invoked. That certainly vitiates the assessment and the assessment order is liable to be quashed. 12.2 As with regard to AY 2021-22, the foundation of the proceedings by way of approval dated 28.06.2022 is established to be on the basis of an approval granted in a mechanical manner by merely mentioning ‘Approved,’. That again Printed from counselvise.com 19 ITA No.2305, 2306, 2308 and 2309/Del/2025 vitiated the assumption of jurisdiction and made the consequential assessment order liable to be quashed. 13. In the light of the aforesaid discussion, we sustain the corresponding grounds in the appeals as determined by way of aforesaid issues and allow the appeals of the assessee. The impugned assessment orders are quashed. Order pronounced in the open court on 15th October, 2025. Sd/- Sd/- Sd/- Sd/- [S. RIFAUR RAHMAN] [ANUBHAV SHARMA] ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 15.10.2025 dk Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Assistant Registrar, ITAT, New Delhi Printed from counselvise.com "