DEVALBAI KARSAN PARMAR ,MUMBAI V. INCOME TAX OFFICER WARD 20(1)(1), MUMBAI

ITA 1786/MUM/2025

AI Insights

The case involves an appeal by Devalbai Karsan Parmar against the order of the Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre, which upheld the reassessment order passed by the Income Tax Officer for the Assessment Year 2017-18. The reassessment was based on the alleged escapement of income from the transfer of immovable property, which was taxed under section 56(2)(vii)(b) of the Income Tax Act. The primary legal contention was the validity of the reassessment notice issued under section 148, which was challenged on grounds of procedural impropriety and non-compliance with the statutory provisions governing reassessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312391 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2017-2018
• Other Referred Cases: UOI vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC), Siemens Financial Services (P.) Ltd. vs. DCIT [2023] 154 taxmann.com 159, Vodafone Idea Limited vs. DCIT [WP No. 2678/2022, dt. 06-02-2024], Manish Jagdish Joshi vs. CIT (DRP-3), [2024] 165 taxmann.com 836 (Mumbai-Trib.), ACIT vs. Ms. Asha P. Kedia in ITA No. 3672/Mum/2024 r.w. C.O. No. 181/Mum/2024, dt. 28-03-2025, Bhavesh Maganlal Dharod v. ITO [2023] 155 taxmann.com 335 (Bombay)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASIF KAR MALI
• Assessee Lawyers: SHASHANK MEHTA
• Keywords: Set aside; Reassessment proceedings; Sale consideration of property below Jantri Value; Period of limitation; Competent authority
• Section: 147; 148; 144; 56; 56(2)(vii)(b); 56(2); 10

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “J(SMC)” BENCH : MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER ITA No. 1786/Mum/2025 Assessment Year : 2017-18 Devalbai Karsan Parmar, H9, B-401, Herumb Chs, New MHADA Colony, Kamgar Nagar, Near Tilak Nagar Railway Station, Chembur, Mumbai-400024. PAN: AISPP0021A vs. Income Tax Officer, Ward-20(1)(1), 3rd Floor, Piramal Chambers, Lalbaugh, Mumbai-400012. (Appellant) (Respondent) For Assessee : Shri Shashank Mehta For Revenue : Shri Asif Karmali, Sr.DR Date of Hearing : 24-04-2025 Date of Pronouncement : 30-04-2025 O R D E R PER VIKRAM SINGH YADAV, A.M : This is an appeal filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟], dated 06-02-2025, pertaining to Assessment Year (AY) 2017-18, wherein the assessee has taken the following grounds of appeal: 2 ITA No. 1786/Mum/2025 “1. In the facts and circumstances of the case and law, the Learned Commissioner of Income Tax (Appeals) (hereinafter also referred to as 'the CIT(A)] has erred in upholding the action of the Ld. Assessing Officer who reopened the assessment under section 147 of the Act for the relevant Assessment Year 2017-18; in utter defiance and disregard to the jurisdictional fact that no re-assessment can made if the amount of alleged escaped income does not exceed Rs. 50,00,000/-; when three years has already elapsed from the end of the relevant Assessment Year. 2. In the facts and circumstances of the case and law, the Learned Commissioner of Income Tax (Appeals) [hereinafter also referred to as 'the CIT(A)'] has erred in upholding the action of the Ld. Assessing Officer who obtained approval of Principal Commissioner of Income Tax; whereas since the impugned notice dated 28.07.2022 issued under section 148 and the impugned order dated 25.07.2022 passed under section 148A(d) were issued/passed beyond three years from the end of the relevant Assessment Year; hence approval ought to have been obtained pursuant section 151 (ii); thereby vitiating the entire re-assessment proceeding. Reliance is placed on the decision of Hon'ble Supreme Court in the case of UOI vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC) [03-10-2024] 3. In the facts and circumstances of the case and law, the Learned Commissioner of Income Tax (Appeals) has erred in dismissing the appeal of the Appellant in limine without appreciating the fact that the impugned property was acquired in the financial year 2009-10(i.e. AY 2010-11) and not during relevant AY 2017-18; hence alleged income pursuant to provisions of sub-clause (b) of clause (vii) of sub-section (2) of section 56 cannot be chargeable to tax during relevant Assessment Year 2017-18-as it would amount to retrospective application of the said provision to the transaction which was executed prior to the said provision been made effective in the statute. 4. In the facts and circumstances of the case and law, the Learned Commissioner of Income Tax (Appeals) has erred in dismissing the appeal of the Appellant in limine without appreciating the fact that the Ld. Assessing Officer has erred in making addition of Rs. 16,46,373/- under section 56(2)(vii)(b) in utter defiance to the first proviso thereof. 5. In the facts and circumstances of the case and law, the Learned Commissioner of Income Tax (Appeals) has erred in dismissing the appeal of the Appellant inlimine without appreciating the fact that the Ld. Assessing Officer has erred in making addition of Rs. 16,46,373/- under section 56(2) (vii) (b); disregarding the factual and legal matrix of the case. 6. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeal) has erred in upholding the action of the Ld. Assessing Officer who erred in issuing the impugned notice dated 25.07.2022 under section 148 is in utter violation of section 151A which 3 ITA No. 1786/Mum/2025 requires the proceedings to be conducted in faceless manner whereas the said notice was issued by the jurisdictional Assessing Officer. 7. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeal) has erred in upholding the action of the Ld. Assessing Officer who erred in not providing the alleged sanction note as claimed to have obtained from the Principal Commissioner of Income Tax; thereby violating the express guidelines of the CBDT and in utter disregards to principles laid down by several Hon'ble High Courts including jurisdictional High Court. 8. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeal) has erred in upholding the action of the Ld. Assessing Officer who erred in issuing the notice dated 25.07.2022 under section 148 of the Act without providing the DIN and without citing the reason for not providing; thereby issuing the notice in utter contravention to the express and binding guidelines of CBDT.” 2. Briefly the facts of the case are that assessment in this case was completed u/s. 147 r.w.s. 144B of the Income Tax Act, 1961 („the Act‟) vide order dt. 18-05-2023; wherein the AO invoked the provisions of section 56(2)(vii)(b) of the Act and brought to tax, the difference between the stamp duty value and the sale consideration amounting to Rs.16,46,373/- in respect of transfer of immoveable property in the hands of the assessee. 3. Being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A), who has since sustained the order and the findings of the AO. Being aggrieved, the assessee is in appeal before us. 4. During the course of hearing, the Ld. AR submitted that in Ground No. 1, the assessee has challenged the action of the Ld. CIT(A) in sustaining the action of the AO in re-opening the assessment u/s. 147 of the Act, without fulfilling the jurisdictional requirements. In this regard, it was submitted that in the notice issued u/s. 148A(b) of the Act, dt. 24-05- 2022, the quantum of alleged escaped income has been stated at Rs.32,92,746/-. Thereafter, in the order passed u/s. 148A(b) of the Act, dt. 25-07-2022, the alleged escaped income has again been quantified at 4 ITA No. 1786/Mum/2025 Rs. 32,92,746/- and thereafter, the notice u/s. 148 of the Act was issued on 28-07-2022. It was submitted that the provisions of section 149(1)(b) of the Act permits issuance of notice u/s. 148 of the Act beyond three years from the end of the relevant assessment year only and only if the quantum of income chargeable to tax which has escaped assessment is more than Rs. 50 lakhs. It was submitted that the impugned assessment year under consideration is AY. 2017-18 and it is a case where the order u/s. 148A(d) of the Act and notice u/s. 148 of the Act was issued beyond three years from the end of the relevant assessment year. It was accordingly submitted that the jurisdictional requirement for issuance of notice u/s. 148 has therefore, not been complied in the instant case and, therefore, the consequential proceedings are bad in law and deserve to be set aside. 5. In Ground No. 2, the assessee has challenged the action of the Ld.CIT(A) in upholding the order so passed by the AO, without obtaining approval from the competent authority u/s. 151(ii) of the Act. During the course of hearing, the Ld.AR submitted that as per the provisions of section 151(ii) of the Act as applicable at the relevant point in time, where more than three years have elapsed from the end of the relevant assessment year, specified authority for obtaining approval before issuance of notice u/s 148 is either Principal Chief Commissioner or Principal Director General and where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General. It was submitted that in the instant case, the AO has obtained approval of Principal Chief Commissioner of Income Tax, who is not the specified authority u/s. 151(ii) of the Act. It was submitted that not obtaining a valid sanction u/s. 151(ii) and obtaining approval from non-specified authority renders the re-assessment proceedings as bad in law. It was further submitted that the proviso to section 151 of the Act also cannot come to the rescue of the Revenue. It was submitted that the said proviso 5 ITA No. 1786/Mum/2025 was inserted vide Finance Act, 2023, w.e.f. 01-04-2023, therefore, the proviso was not in existence when the order u/s. 148A(d) of the Act was passed on 25-07-2022 or when the notice u/s. 148 of the Act was issued on 28-07-2022. 6. It was submitted that the matter is squarely covered by the decisions of the Hon‟ble Bombay High Court in the case of Siemens Financial Services (P.) Ltd., vs. DCIT [2023] 154 taxmann.com 159 and Vodafone Idea Limited vs. DCIT [WP No. 2678/2022, dt. 06-02-2024]. 7. It was submitted that exactly identical matter has come up before the Co-ordinate Bench of the Tribunal in the case of Manish Jagdish Joshi vs. CIT (DRP-3), [2024] 165 taxmann.com 836 (Mumbai-Trib.) pertaining to AY. 2017-18 as well as in the case of ACIT vs. Ms. Asha P. Kedia in ITA No. 3672/Mum/2024 r.w. C.O. No. 181/Mum/2024, dt. 28-03-2025 wherein following the decisions of the Hon‟ble Bombay High Court, the matter has been decided and the said decisions equally apply in the instant case. 8. It was accordingly submitted that notice issued u/s. 148 of the Act dt. 28-07-2022 is invalid as the sanction was not obtained as per the provisions of section 151(ii) of the Act and the consequential order so passed by the AO, therefore, deserve be set aside and the necessary relief be provided to the assessee. 9. Per contra, the Ld.DR has relied on the order of the lower authorities. 10. We have heard the rival contentions and perused the material available on record. We find that the matter has been extensively discussed by the Co-ordinate Bench of the Tribunal in the case of Manish Jagdish Joshi vs. CIT (DRP-3) (supra) and the relevant findings read as under: 6 ITA No. 1786/Mum/2025 “9. We have considered the submissions of both sides and perused the material available on the record. Before proceeding further, it is pertinent to note the provisions of the Act, which are relevant for deciding the issue at hand. The relevant provisions of section 148 of the Act, as amended by Finance Act 2021, read as follows:- \"148. Before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within a period of three months from the end of the month in which such notice is issued, or such further period as may be allowed by the Assessing Officer on the basis of an application made in this regard by the assessee, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139: Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice: Provided further that no such approval shall be required where the Assessing Officer, with the prior approval of the specified authority, has passed an order under clause (d) of section 148A to the effect that it is a fit case to issue a notice under this section: ……….. Explanation 3. For the purposes of this section, specified authority means the specified authority referred to in section 151.\" 10. Therefore, 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(f) 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. 11. 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: - 7 ITA No. 1786/Mum/2025 \"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.\" 12. Therefore, from the plain reading of section 151 of the Act, it is evident that in the case where more than three years have elapsed from the end of the relevant assessment year, the Specified Authority for the purpose of granting prior approval, as required under section 148 of the Act, is Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. 13. Section 149 of the Act provides a time limit for issuance of notice under section 148 of the Act and the relevant portion of the same reads as follows: - \"149. (1) No notice under section 148 shall be issued for the relevant assessment year,- (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b): (b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of- (i) an asset, (ii) expenditure in respect of a transaction or in relation to an event or occasion; or (iii) an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more: ……….” 14. Therefore, in a case where three years have elapsed no notice under section 148 of the Act can be issued unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to Rs. 50 lakh or more. 15. In light of the aforenoted relevant provisions of the Act, the actual delineation of the pertinent facts in the present case are as follows: - 8 ITA No. 1786/Mum/2025 (i) On 15/06/2021, notice under section 148 of the Act was issued to the assessee as per the old provisions of the Act, after the expiry of three years from the end of the relevant assessment year, i.e. 2017-18. (ii) The Hon'ble Supreme Court in Ashish Agarwal (supra) held that notices issued under section 148 of the Act after 01/04/2021 as per the erstwhile provisions shall be deemed to be show cause notice issued under section 148A(b) of the Act. (iii) On 23/05/2022, the AO granted the opportunity to the assessee to show cause in light of the information received, as required under section 148A(b) of the Act. (iv) On 15/07/2022, prior approval of Principal CIT-1, Mumbai was granted to pass the order under 148A(d) of the Act. (v) On 18/07/2022, the AO passed the order under 148A(d) of the Act after considering the assessee's objections. (vi) On 24/07/2022, the AO issued a notice under section 148 of the Act. 16. 16. We find that while considering the similar issue and similar submissions the Hon'ble Jurisdictional High Court in Siemens Financial Services (P.) Lid. v. Dy. CIT [2023] 154 taxmann.com 159/457 ITR 647 (Bombay), held that TOLA would not affect the scope of section 151 and sanction of Specified Authority was to be obtained in accordance with the law existing when the sanction was obtained. It was further held that where the Assessing Officer issued a reopening notice beyond the period of three years, approval was required to be taken as per provisions of amended section 151 from the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. The relevant observations of the Hon'ble High Court, in the aforesaid decision, are reproduced as follows: - \"20. Under Section 151 \"specified 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 9 ITA No. 1786/Mum/2025 Commissioner was the specified authority, who could have granted the approval/sanction?, (b) if not, the effect thereof? 22. 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 31st July 2022 is not valid and has to be quashed and set aside. 23. 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. Explanation 3 to section 148 of the Act specifies that the meaning of the term 'specified authority' as provided for in section 151 of the Act is to apply for the purpose of section 148. Section 148A(d) of the Act also requires the Assessing Officer to pass an order after considering the reply of the assessee as to whether or not it is a fit case to issue a notice under section 148 of the Act and such an order under section 148A(d) of the Act has to be passed with the prior approval of the specified authority. The Explanation to section 148A of the Act also incorporates the meaning of 'specified authority' as provided for in section 151 of the Act. 24. As per section 151 of the Act, the 'specified authority' who has to grant his sanction for the purposes of section 148 and section 148A is the Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, the Chief Commissioner or Director General if more than three years have elapsed from the end of the relevant assessment year. The present petition relates to the AY 2016-17, and as the impugned order and impugned notice are issued beyond the period of three years which elapsed on 31st March, 2020 the approval as contemplated in section 151(if) of the Act would have to be obtained which has not been done by the Assessing Officer. The impugned notice mentions that the prior approval has been taken of the 'Principal Commissioner of Income-tax-8 ('PCIT-8') which is bad in law as the approval should have been obtained in terms of section 151(1) and not section 151(1) of the Act and the PCIT-8 cannot be the specified authority as per section 151 of the Act. Further, even in the affidavitin-reply, the department has accepted that the approval obtained is of the Principal Commissioner of Income-tax-8' and, hence, such an approval would be bad in law. 25. TOLA, enacted on 29th September 2020 and came into force on 31st March 2020. It inter alia, provided for a relaxation of certain provisions of the Incometax Act, 1961. Where any time limit for completion or compliance of an action such as completion of any proceedings or passing of any order or issuance of any notice fell between the period 20th March 2020 to 31st December 2020, the time limit for completion of such action stood extended to 31st March 2021. Thus, TOLA only seeks to extend the period of limitation and does not affect the scope of section 151. 10 ITA No. 1786/Mum/2025 26. The Assessing Officer cannot rely on the provisions of TOLA and the notifications issued thereunder as section 151 has been amended by Finance Act, 2021 and the provisions of the amended section would have to be complied with by the Assessing Officer, w.e.f., Ist April 2021. Hence, the Assessing Officer cannot seek to take the shelter of TOLA as a subordinate legislation cannot override any statute enacted by the Parliament. Further, the notification extending the dates from 31st March 2021 till 30th June 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 sanction is required to be obtained by applying the amended section 151(ii) of the Act and since the sanction has been obtained in terms of section 151(f) of the Act, the impugned order and impugned notice are bad in law and should be quashed and set aside.\" 17. Therefore, respectfully following the aforesaid decision of the Hon'ble Jurisdictional High Court we find no merits in the reliance placed by the Revenue on the provisions of TOLA. As, in the present case, the period of three years has elapsed from the end of the relevant assessment year and the order dated 23/05/2022 was passed under section 148A(d) of the Act after obtaining the approval of the Principal CIT-1, Mumbai vide letter dated 15/07/2022, we are of the considered view that the Revenue has not followed the mandatory provisions of the Act while initiating the reassessment proceedings and sanction of the Specified Authority is not in conformity with the law prevalent at the time of grant of sanction. 18. From the perusal of the order dated 23/05/2022 passed under section 148A(d) of the Act, it is further evident that based on the information in possession of the AO, it was concluded that there is an escapement of income to the tune of Rs.43,32,000 under section 56(2)(vii)(b) of the Act. The aforesaid order further mentions that the conditions of section 149(1) are satisfied in this case for the assessment year 2017-18. However, undisputedly three years from the end of the relevant assessment year elapsed in the present case even at the time of issuance of the first notice under section 148 of the Act. Subsequently, after completion of the process, as per the existing provisions dealing with reassessment, the Jurisdictional AO issued notice under section 148 of the Act on 24/07/2022. As noted in the foregoing paragraph, as per the provisions of section 149, as amended by Finance Act 2021, no notice under section 148 of the Act shall be issued after the expiry of three years but not more than ten years, unless the AO is in the position of documents or evidence which reveal that income amounting to Rs.50 lakh or more chargeable to tax has escaped assessment. As noted above in the present case, the income which is alleged to have escaped assessment is less than Rs.50 lakh. We find that the Hon'ble Jurisdictional High Court in Bhavesh Maganlal Dharod v. ITO [2023] 155 taxmann.com 335 (Bombay) held as follows:- 11 ITA No. 1786/Mum/2025 \"3.........Under Section 149(1)(b) of the Act no notice can be issued if the amount is less than Rs. 50 lakhs. Further, if Section 149(1)(b) of the Act is applicable, then the approval could be granted only by the Principal Chief Commissioner and not Principal Commissioner as in this case.\" 19. Thus, in the present case, it is discernible that the notice under section 148 of the Act was issued not only in contravention of the provisions of section 151 as the sanction of the concerned Specified Authority was not obtained, but the same is also time-barred as per the provisions of section 149 of the Act as the same was issued after three years and the amount alleged to have escaped assessment is only Rs.43,32,000, i.e. less than Rs.50 lakh. Accordingly, we are of the considered view that the notice issued under section 148 of the Act is void ab initio and bad in law and therefore is quashed. Consequently, the entire reopening proceedings and impugned final assessment order passed under section 147 r/w section 144C(13) of the Act is also quashed.” 11. Similarly, the Co-ordinate Bench of the Tribunal in the case of ACIT vs. Ms. Asha P. Kedia (supra) has examined the applicability of the proviso to section 151 of the Act and the relevant findings read as under: “7. We have given thoughtful considerations to the peculiar facts and circumstances of the case. Admittedly, the Hon'ble Jurisdictional High Court has dealt with such provisos, as involved in the instant case, in the case of Vodafone India Idea Ltd. vs. DCIT (write petition 2768 of 2022 decided on 06.02.2024), wherein it has been held as under: \"3. The impugned order and the impugned notice both dated 7th April 2022 state that the Authority that has accorded the sanction is the PCIT, Mumbai 5. The matter pertains to Assessment Year (AY) 2018-19 and since the impugned order as well as the notice are issued on 7th April 2022, both have been issued beyond a period of three years. Therefore, the sanctioning authority has to be the PCCIT as provided under Section 151 (ii) of the Act. The proviso to Section 151 has been inserted only with effect from 1st April 2023 and, therefore, shall not be applicable to the matter at hand.\" 8. In the instant case, admittedly the notice u/s 148 of the Act was issued for reopening of the case on dated 27.07.2022 i.e. after elapsing of three years from the end of the relevant assessment year and therefore as per sub clause (ii) of section 151 of the Act, the specified authority for granting the approval for issuing the notice u/s 148 of the Act, would have been, either Principal Chief Commissioner or Principal Director or where there is no such post then the Chief Commissioner or Director General, for granting the sanction for issuing of notice u/s 148 of the Act, but not the Ld.. PCIT-2, Mumbai who has granted the approval in this 12 ITA No. 1786/Mum/2025 case and/or authority specified under sub clause (i) of section 151 of the Act. Relevant provisions of law, which are very much clear and the Hon'ble Jurisdictional High Court in the case of Vodafone India Idea Ltd. has also clearly held that proviso to section 151 of the Act has been inserted w.e.f. 01.4.2023 and therefore shall not be applicable to the A.Y. 2018-19. In effect, the Hon'ble High Court has clarified that provisos to section 151 of the Act would be effective from 01.04.2023 onwards and would not be applicable to the prior period. Thus, the impugned notice dated 27.07.2022 u/s 148 of the Act, as issued by the AO in the instant case by taking approval from the Ld. Pr. CIT-2, Mumbai but not from the Ld. Pr. CCIT and in pursuance to that the assessment order dated 23.01.2023 u/s 147 r.w.s. 144 & 144B of the Act, is liable to be quashed being void, ab-initio and thus, the same is quashed accordingly. Thus, the CO is allowed.” 12. In the instant case, it is not in dispute that firstly, notice u/s. 148 of the Act has been issued on 25/07/2022, beyond three years from the end of the relevant assessment year i.e., A.Y. 2017-18 and secondly, the approval has been obtained from the Pr. Commissioner of Income Tax – 20, Mumbai vide approval dated 22-07-2022 as so stated in the notice so issued u/s 148 of the Act. In terms of section 149(1)(b) of the Act, no notice u/s. 148 of the Act shall be issued for the relevant assessment year, if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b) and as per clause (b), no notice u/s. 148 of the Act shall be issued for the relevant assessment year if three years, but not ten years have elapsed from the end of the relevant assessment year, unless the income chargeable to tax has escaped assessment amount, or likely to escape assessment amounting to Rs. 50 lakhs or more. In other words, where three years have elapsed, no notice u/s. 148 of the Act can be issued unless the income chargeable to tax has escaped assessment or likely to escape assessment amounting to Rs. 50 lakhs or more. In the instant case, it is also an admitted fact that the quantum of escaped income as per the AO is Rs. 32,92,746/-, which is clearly below the threshold of Rs. 50 lakhs and, therefore, in such a 13 ITA No. 1786/Mum/2025 scenario, the AO could have issued the notice only within the stipulated period of three years from the end of the relevant assessment year, which has not happened in the instant case. Therefore, we find merit in the contentions advanced by the Ld. AR that the jurisdictional requirement in terms of time limit for issuance of notice u/s. 148 of the Act as so prescribed u/s. 149 of the Act has not been satisfied in the instant case and, therefore, the notice so issued deserves to be set aside. 13. Further, from the reading of section 151(ii) of the Act, it is evident that in a case where more than three years have elapsed from the end of the relevant assessment year, the specified authority for the purposes of grant of prior approval is Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General. As against that in the instant case, the approval has been sought and granted by the Principal Commissioner of Income Tax, who is not the specified authority as so provided in section 151(ii) of the Act. 14. In light of the above, the aforesaid notice so issued u/s. 148 of the Act in violation of provisions of section 149 as well as section 151(ii) of the Act cannot be sustained in the eyes of law and the same is thus set-aside. 15. Since the relief has been granted on the jurisdictional matter, the other grounds raised by the assessee and on merits of the case, have become academic and are dismissed as infructuous. 16. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 30-04-2025 Sd/- Sd/- [ANIKESH BANERJEE] [VIKRAM SINGH YADAV] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 30-04-2025 TNMM 14 ITA No. 1786/Mum/2025 Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order Dy./Asst. Registrar I.T.A.T, Mumbai "