HERITAGE LAMPS,DELHI V. ITO WARD-45(1), DELHI

ITA 396/DEL/2025

AI Insights

The case involves multiple appeals by Heritage Lamps against the orders of the Commissioner of Income Tax (Appeals) at the National Faceless Appeal Centre, Delhi, concerning various assessment years. The primary contention in these appeals was the validity of the reassessment notices issued under section 148 of the Income Tax Act, 1961, which were challenged on grounds of being barred by limitation and issued without the necessary jurisdictional approval. The Tribunal examined the procedural compliance in issuing these notices, particularly in light of the amendments to the Act and relevant judicial precedents.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 838252 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2016-2017
• Appeal Filed On: 23-01-2025
• Other Referred Cases: Union of India and Ors. vs. Ashish Agarwal, Union of India vs. Rajeev Bansal, Communist Party of India (Marxist) vs. CIT Exmpt.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POOJA SWAROOP
• Assessee Lawyers: AMIT GOYAL
• Keywords: Set aside; Invalid notice; Reassessment proceedings; Question of law; Unexplained expenditure; Bogus purchase; Period of limitation; Time period of passing order; Bogus
• Section: 148; 69C; 139

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘B’ NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.393/Del/2025 ASSESSMENT YEAR: 2014-15) ITA No.396/Del/2025 (ASSESSMENT YEAR: 2016-17) ITA No.394/Del/2025 (ASSESSMENT YEAR: 2017-18) ITA No.395/Del/2025 (ASSESSMENT YEAR: 2019-20) Heritage Lamps, 4-A/36, Tilak Nagar New Delhi-110018 PAN:AAEFH1920N Vs. ITO, Ward 45(1) Civic Centre New Delhi-110002 (Appellant) (Respondent) O R D E R PER MANISH AGARWAL, AM: All captioned appeals are filed by the assessee against the separate orders of Commissioner of Income Tax (Appeal), [“CIT(A)”, in short] National Faceless Appeal Centre (NFAC), Delhi passed u/s 250 of the Income Tax Act, 1961 (“the Act”) for various assessment years as tabulated below:- S. No. ITA No. Asstt. Year CIT(A) order dt. Asstt. Order dt. Section in which Asstt. Order passed 1 393/Del/2025 2014-15 14.11.2024 22.05.2023 147 r.w.s.144B of the Act 2. 396/Del/2025 2016-17 14.11.2024 29.03.2023 - do - 3. 394/Del/2025 2017-18 14.11.2024 28.03.2023 - do - 4. 395/Del/2025 2019-20 14.11.2024 30.01.2024 - do - Assessee by Sh. Amit Goyal,CA and Shri Pranav Yadav, Adv. Department by Ms. Pooja Swaroop, CIT DR Date of hearing 21.01.2026 Date of pronouncement 18.02.2026 Printed from counselvise.com 2 ITA Nos.393 to 396/Del/2025 Heritage Lamps vs. ITO 2. Though these appeals are for different Assessment Years however, as they pertained to one assessee thus, they are decided by a common order. We first take up the appeal in ITA No. 393/Del/2025 for Assessment Year 2014-15. ITA No.393/Del/2025 [Assessment Year 2014-15] 3. Brief facts of the case are that assessee is a firm and filed its return of income on 26.11.2014, declaring total income of Rs. 4,41,260/-. The case of the assessee was reopened u/s 147 of the Act by issue of notice u/s 148 on 15.06.2021, copy of the same is placed in PB-1 filed by the assessee. In terms of the decisions of Hon’ble Supreme Court in the case of Union of India and Ors. vs. Ashish Agarwal in Civil Appeal No.3005/2022 dated 04.05.2022, said notice was deemed to have been issued as show cause notice u/s 148A(b) of the Act and the AO had supplied information to the assessee vide letter dt. 18.05.2022, placed at paper book pages 2- 3. In response, the Assessee filed reply on 01.06.2022 online vide acknowledgement No. 644721721010622. After receiving the submission from the assessee, another show cause notice was issued on 07.07.2022 which was replied on 14.07.2022. Thereafter order u/s 148A(d) was passed on dated 25.07.2022 and notice u/s 148 was issued on the same day i.e. on 25.07.2022, copy of the same is placed at PB page 9. Thereafter, the re-assessment proceedings were completed, and order was passed u/s 147 r.w.s. 144B of the Act on 22.05.2023 wherein total additions of Rs. 11,10,16,299/- were made in the hands of the assessee u/s 69C of the Act on account of alleged bogus purchases. Against the said Printed from counselvise.com 3 ITA Nos.393 to 396/Del/2025 Heritage Lamps vs. ITO order an appeal was filed before the Ld. CIT(A) who dismissed the appeal of the assessee. 4. Aggrieved by the said order, assessee is in appeal before the Tribunal wherein assessee has taken following grounds of appeal: 1. On the facts and circumstances of the case and in law, the notice u/s 148 issued in this case is bad-in-law, illegal, without jurisdiction and barred by limitation and, therefore, the said notice u/s 148 along with assessment order passed on the foundation of such notice are liable to be quashed and CIT (A) erred in not holding so. 2. On the facts and circumstances of the case and in law, the reassessment proceedings initiated is bad in law, without jurisdiction and contrary to the provisions of law including the specific provisions of section 147 to section 151A Act and therefore, the reassessment proceeding initiated along with assessment order passed are liable to be quashed and CIT(A) erred in not holding so. 3. On the facts and circumstances of the case and in law, the assessment order passed by the assessing officer is bad-in-law, without jurisdiction and barred by limitation. 4. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the addition made by the assessing officer of Rs. 5,42,70,638/- on the account of unexplained expenditure u/s 69C of the Act. 5. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the addition made by the assessing officer of Rs. 5,67,45,661/- on the account of unexplained money u/s 69A of the Act.” 5. In Grounds of appeal Nos. 1 to 3, assessee has challenged the re-assessment order passed u/s 147 of the Act, by alleging that the notice issued u/s 148 is barred by limitations as per order of Hon’ble Supreme Court in the case of Union of India Vs. Rajeev Printed from counselvise.com 4 ITA Nos.393 to 396/Del/2025 Heritage Lamps vs. ITO Bansal reported in (2024) 469 ITR 46 (SC) being issued after the surviving period. 6. Heard both the parties at length and perused the materials available on record. The notice u/s 148 under old provisions was issued on 15.06.2021 leaving 15 days as surviving period with the Assessing Officer till the period of limitation i.e. 30.6.2021 extended under TOLA. Thereafter, in terms of the judgement of Hon’ble Supreme Court in the case of Ashish Agarwal (supra), notice issued u/s 148 dated 15.06.2021 was deemed to have been issued u/s 148A(b) of the Act and information was supplied to the assessee vide notice u/s 148A(b) on 18.5.2022. The said notice was duly replied by the assessee on 01.06.2022. The AO sought further clarifications vide letter dated 07.07.2022 which was replied on 14.07.2022. The order u/s 148A(d) was passed on 25.7.2022 followed by the notice u/s 148 issued on the same day. Claim of the assessee was that the notice u/s 148 dt. 25.7.2022 was issued after the surviving period of 15 days available with the AO from the date of first reply furnished by the assessee in response to notice issued u/s 148A(b) on 01.06.2022 thus is barred by limitations. The revenue contended that second reply in response to letter dated dt. 07.07.2022 was filed by the assessee on 14.7.2022 and the notice u/s 148 was issued on 25.07.2022 thus it is within the surviving period of 15 days. 7. Since the surviving period available with the AO was 15 days from the date of issue of original notice u/s 148 under the old Printed from counselvise.com 5 ITA Nos.393 to 396/Del/2025 Heritage Lamps vs. ITO provisions where limitation was extended upto 30.06.2021 under TOLA, therefore, treating the period of 15 days as extended time available with AO, in terms of the order of Hon’ble Supreme Court in the case of Rajeev Bansal (supra), the AO should have passed the order u/s 148A(d) and issue notice u/s 148 of the Act upto 16.06.2022. The period of limitations for issue of notice u/s 148 as per the order of Rajeev Bansal (supra) starts from the date when the assessee filed reply against the first notice issued u/s 148A(b) on 18.5.2022. The AO should have concluded the entire proceedings within the surviving period of 15 days from the date when first reply was filed in response to notice issued u/s 148A(b) of the Act. In case where the AO wants more clarifications, the available period remained the same during which AO could made further enquiries and in no circumstances, such period could be extended. 8. From the perusal of the reply filed by the assessee on 01.06.2022, it is further observed that assessee has objected the initiation of proceedings u/s 148 and filed all the necessary evidences to prove the purchases as genuine. In our opinion, further inquiry, if any, the AO wants to make, the same must be completed within the surviving period of 15 days available from the date of filing of first reply by the assessee against the notice dt. 18.5.2022 issued u/s 148A(b) of the Act. As observed above, the AO passed the order u/s 148A(d) on 25.07.2022 and the notice u/s 148 were also issued on 25.07.2022 which is beyond the surviving period available with the AO which had expired on 16.06.2022. Printed from counselvise.com 6 ITA Nos.393 to 396/Del/2025 Heritage Lamps vs. ITO 9. The Hon’ble Supreme Court in the case of Rajeev Bansal (supra) has held that the cases where the earlier notice issued u/s 148 is treated as notice u/s 148A(b) of the Act, fresh notice u/s 148 could be issued after completion of due process as per amended section 148A of the Act however, a rider was imposed by the hon’ble court that the fresh notice u/s 148 could be issued only within the surviving period available. The relevant observations of the hon’ble court are as under: 105. “A direction issued by this Court in the exercise of its jurisdiction under Article 142 is an order of a court. The third proviso to Section 149 of the new regime provides that the period during which the proceedings under Section 148A are stayed by an order or injunction of any court shall be excluded for computation of limitation. During the period from the date of issuance of the deemed notice under Section 148A(b) and the date of the decision of this Court in Ashish Agarwal (supra), the assessing officers were deemed to have been prohibited from passing a reassessment order. Resultantly, the show cause notices were deemed to have been stayed by order of this Court from the date of their issuance (somewhere from 1 April 2021 till 30 June 2021) till the date of decision in Ashish Agarwal (supra), that is, 4 May 2022. 106. In Ashish Agarwal (supra), this Court directed the assessing officers to provide relevant information and materials relied upon by the Revenue to the assesses within thirty days from the date of the judgment. A show cause notice is effectively issued in terms of Section 148A(b) only if it is supplied along with the relevant information and material by the assessing officer. Due to the legal fiction, the assessing officers were deemed to have been inhibited from acting in pursuance of the Section 148A(b) notice till the relevant material was supplied to the assesses. Therefore, the show cause notices were deemed to have been stayed until the assessing officers provided the relevant information or material to the assesses in terms of the direction issued in Ashish Agarwal (supra). To summarize, the combined effect of the legal fiction and the directions issued by this Court in Ashish Agarwal (supra) is that the show cause notices that were deemed to have been issued during the period between 1 April 2021 and 30 June 2021 were stayed till the date of supply of the relevant information and material by the assessing officer to the assessee. After the supply of the relevant material and Printed from counselvise.com 7 ITA Nos.393 to 396/Del/2025 Heritage Lamps vs. ITO information to the assessee, time begins to run for the assesses to respond to the show cause notices. 107. The third proviso to Section 149 allows the exclusion of time allowed for the assesses to respond to the show cause notice under Section 149A(b) to compute the period of limitation. The third proviso excludes “the time or extended time allowed to the assessee.” Resultantly, the entire time allowed to the assessee to respond to the show cause notice has to be excluded for computing the period of limitation. In Ashish Agarwal (supra), this Court provided two weeks to the assesses to reply to the show cause notices. This period of two weeks is also liable to be excluded from the computation of limitation given the third proviso to Section 149. Hence, the total time that is excluded for computation of limitation for the deemed notices is: (i) the time during which the show cause notices were effectively stayed, that is, from the date of issuance of the deemed notice between 1 April 2021 and 30 June 2021 till the supply of relevant information or material by the assessing officers to the assesses in terms of the directions in Ashish Agarwal (supra); and (ii) two weeks allowed to the assesses to respond to the show cause notices. b. Interplay of Ashish Agarwal with TOLA 108. The Income Tax Act read with TOLA extended the time limit for issuing reassessment notices under Section 148, which fell for completion from 20 March 2020 to 31 March 2021, till 30 June 2021. All the reassessment notices under challenge in the present appeals were issued from 1 April 2021 to 30 June 2021 under the old regime. Ashish Agarwal (supra) deemed these reassessment notices under the old regime as show cause notices under the new regime with effect from the date of issuance of the reassessment notices. The effect of creating the legal fiction is that this Court has to imagine as real all the consequences and incidents that will inevitably flow from the fiction. Therefore, the logical effect of the creation of the legal fiction by Ashish Agarwal (supra) is that the time surviving under the Income Tax Act read with TOLA will be available to the Revenue to complete the remaining proceedings in furtherance of the deemed notices, including issuance of reassessment notices under Section 148 of the new regime. The surviving or balance time limit can be calculated by computing the number of days between the date of issuance of the deemed notice and 30 June 2021. 109. If this Court had not created the legal fiction and the original reassessment notices were validly issued according to the provisions of the new regime, the notices under Section 148 of Printed from counselvise.com 8 ITA Nos.393 to 396/Del/2025 Heritage Lamps vs. ITO the new regime would have to be issued within the time limits extended by TOLA. As a corollary, the reassessment notices to be issued in pursuance of the deemed notices must also be within the time limit surviving under the Income Tax Act read with TOLA. This construction gives full effect to the legal fiction created in Ashish Agarwal (supra) and enables both the assesses and the Revenue to obtain the benefit of all consequences flowing from the fiction. 110. The effect of the creation of the legal fiction in Ashish Agarwal (supra) was that it stopped the clock of limitation with effect from the date of issuance of Section 148 notices under the old regime [which is also the date of issuance of the deemed notices]. As discussed in the preceding segments of this judgment, the period from the date of the issuance of the deemed notices till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra) has to be excluded from the computation of the period of limitation. Moreover, the period of two weeks granted to the assesses to reply to the show cause notices must also be excluded in terms of the third proviso to Section 149. 111. The clock started ticking for the Revenue only after it received the response of the assesses to the show causes notices. After the receipt of the reply, the assessing officer had to perform the following responsibilities: (i) consider the reply of the assessee under Section 149A(c); (ii) take a decision under Section 149A(d) based on the available material and the reply of the assessee; and (iii) issue a notice under Section 148 if it was a fit case for reassessment. Once the clock started ticking, the assessing officer was required to complete these procedures within the surviving time limit. The surviving time limit, as prescribed under the Income Tax Act read with TOLA, was available to the assessing officers to issue the reassessment notices under Section 148 of the new regime. 112. Let us take the instance of a notice issued on 1 May 2021 under the old regime for a relevant assessment year. Because of the legal fiction, the deemed show cause notices will also come into effect from 1 May 2021. After accounting for all the exclusions, the assessing officer will have sixty-one days [days between 1 May 2021 and 30 June 2021] to issue a notice under Section 148 of the new regime. This time starts ticking for the assessing officer after receiving the response of the assessee. In this instance, if the assessee submits the response on 18 June 2022, the assessing officer will have sixty-one days from 18 June 2022 to issue a reassessment notice under Section 148 of the new regime. Thus, in this illustration, the time limit for issuance of a Printed from counselvise.com 9 ITA Nos.393 to 396/Del/2025 Heritage Lamps vs. ITO notice under Section 148 of the new regime will end on 18 August 2022. 113. In Ashish Agarwal (supra), this Court allowed the assesses to avail all the defences, including the defence of expiry of the time limit specified under Section 149(1). In the instant appeals, the reassessment notices pertain to the assessment years 2013- 2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018. To assume jurisdiction to issue notices under Section 148 with respect to the relevant assessment years, an assessing officer has to: (i) issue the notices within the period prescribed under Section 149(1) of the new regime read with TOLA; and (ii) obtain the previous approval of the authority specified under Section 151. A notice issued without complying with the preconditions is invalid as it affects the jurisdiction of the assessing officer. Therefore, the reassessment notices issued under Section 148 of the new regime, which are in pursuance of the deemed notices, ought to be issued within the time limit surviving under the Income Tax Act read with TOLA. A reassessment notice issued beyond the surviving time limit will be time barred. G. Conclusions 114. In view of the above discussion, we conclude that: a. After 1 April 2021, the Income Tax Act has to be read along with the substituted provisions; b. TOLA will continue to apply to the Income Tax Act after 1 April 2021 if any action or proceeding specified under the substituted provisions of the Income Tax Act falls for completion between 20 March 2020 and 31 March 2021; c. Section 3(1) of TOLA overrides Section 149 of the Income Tax Act only to the extent of relaxing the time limit for issuance of a reassessment notice under Section 148; d. TOLA will extend the time limit for the grant of sanction by the authority specified under Section 151. 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 20 March 2020 and 31 March 2021, then the specified authority under Section 151(i) has extended time till 30 June 2021 to grant approval; e. In the case of Section 151 of the old regime, the test is: if the time limit of four years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority under Section 151(2) has extended time till 31 March 2021 to grant approval; Printed from counselvise.com 10 ITA Nos.393 to 396/Del/2025 Heritage Lamps vs. ITO f. The directions in Ashish Agarwal (supra) will extend to all the ninety thousand reassessment notices issued under the old regime during the period 1 April 2021 and 30 June 2021; g. The time during which the show cause notices were deemed to be stayed is from the date of issuance of the deemed notice between 1 April 2021 and 30 June 2021 till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra), and the period of two weeks allowed to the assesses to respond to the show cause notices; and h. The assessing officers were required to issue the reassessment notice under Section 148 of the new regime within the time limit surviving under the Income Tax Act read with TOLA. All notices issued beyond the surviving period are time barred and liable to be set aside.” 10. In the case of Communist Party of India (Marxist) vs. CIT Exmpt. reported in [2025] 174 taxmann.com 925 (Delhi), the Hon'ble Delhi High Court has held as under: \"8. The AO issued a notice dated 29.07.2022 under Section 148 of the Act accompanied with the order dated 29.07.2022 passed under Section 148A(d) of the Act. It is the petitioner's case that the said notice is barred by limitation. 9. It is material to note that the original notice under Section 148 of the Act [deemed to be a show cause notice under Section 148A(b) of the Act in terms of the decision in the case of Union of India & Ors. v. Ashish Agarwal (supra)] was issued on 28.06.2021, that is, two days prior to the expiry of the limitation period as extended by virtue of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 [TOLA]. Thus, the AO had two days to issue the notice under Section 148 of the Act after receiving the reply dated 08.06.2022 filed by the petitioner. Since the said period was less than seven days, the AO had, by virtue of the fourth proviso to Section 149(1) of the Act, seven days to pass an order under Section 148A(d) of the Act (which was necessarily required to accompany a notice under Section 148 of the Act). The said period expired on 16.06.2022. Therefore, the order passed under Section 148A(d) of the Act was beyond the period of limitation. Printed from counselvise.com 11 ITA Nos.393 to 396/Del/2025 Heritage Lamps vs. ITO 10. The impugned notice is also liable to be set aside on the ground that it was issued without the approval of the authority specified under Section 151 of the Act. Since the impugned notice was issued beyond the period of three years from the end of the relevant assessment year, thus, in terms of Section 151(ii) of the Act, the same was required to be approved by the Principal Chief Commissioner or Principal Director General or where there is no such authority, by Chief Commissioner or Director General. The determination of the specified authority for grant of approval under Section 151 of the Act depends on whether the notice under Section 148 of the Act has been issued after the expiry of three years from the end of the relevant assessment year or within the said period.\" 11. In the instant case, fresh notice u/s 148 of the Act under the amended law was issued beyond the period of limitation i.e. after the expiry of surviving period as prescribed by the Hon'ble Supreme Court in the case of Rajeev Bansal (supra). In the present case, the notice u/s 148 of the Act was issued on 25.07.2022 and reply in response to notice u/s 148A(b) was filed by the assessee on 01.06.2022 thus, the surviving period of 15 days expired on 16.06.2022. 12. In the light of above facts and by respectfully following the judgement of Hon’ble Supreme Court in the case of Rajeev Bansal (supra), we hold that the notice issued u/s 148 on 25.07.2022 is barred by limitations and is invalid notice and consequent reassessment order passed u/s 147 r.w.s.144 r.w.s.144B is thus, quashed. Accordingly, Grounds of appeal Nos. 1 to 3 taken by the assessee are allowed. Printed from counselvise.com 12 ITA Nos.393 to 396/Del/2025 Heritage Lamps vs. ITO 13. Since we have already decided the legal grounds of appeal taken by the assessee in its favour, the other grounds of appeal are not adjudicated. 14. In the result, the appeal of the assessee in ITA No.393/Del/2025 for A.Y. 2014-15 is allowed. ITA No.396 & 394/Del/2025 (ASSESSMENT YEAR: 2016-17 & 2017-18) 15. Now coming to the assessee’s appeal for AY 2016-17 in ITA No.396/Del/2025 and for AY 2017-18 in ITA No. 394/Del/2025, since both the appeals are having common issues and this fact is admitted by both the parties before us, who made the common submission for both the assessment years, thus they are taken together and adjudicated as under: 16. The return of income u/s 139 of the Act for AY 2016-17 was filed on 16.10.2016 and for AY 2017-18, it was filed on 29.10.2017. Notices u/s 148 of the Act for both the Assessment Years were issued on 12.4.2021 and 09.04.2021 respectively. Thereafter, the notices us/ 148 were issued after passing the orders us/ 148A(d) for both the assessment years and the assessments were completed u/s 147 r.w.s. 144B of the Act by making various additions in both the years. Against the said orders, separate appeals were filed before the ld. CIT(A) who vide separate orders both are dt.14.11.2024, dismissed both the appeals filed by the Printed from counselvise.com 13 ITA Nos.393 to 396/Del/2025 Heritage Lamps vs. ITO assessee. Aggrieved by the said orders of ld. CIT(A), assessee preferred present appeals before the Tribunal. 17. In both appeals, the assessee is challenging assumption of jurisdiction on the basis of incorrect approval from an authority which was not competent to grant approval u/s 151 of the Act. The relevant Ground of appeal No.1 to 3 for AY 2016-17 which are common to both the years are reproduced below:- 1. “On the facts and circumstances of the case and in law, the notice u/s 148 issued in this case is bad-in-law, illegal, without jurisdiction and barred by limitation and, therefore, the said notice u/s 148 along with assessment order passed on the foundation of such notice are liable to be quashed and CIT (A) erred in not holding so. 2. On the facts and circumstances of the case and in law, the reassessment proceedings initiated is bad in law, without jurisdiction and contrary to the provisions of law including the specific provisions of section 147 to section 151A Act and therefore, the reassessment proceeding initiated along with assessment order passed are liable to be quashed and CIT(A) erred in not holding so. 3. On the facts and circumstances of the case and in law, the assessment order passed by the assessing officer is bad-in-law, without jurisdiction and barred by limitation.” 18. Heard both the parties at length and perused the material available on record. From the perusal of the fresh notices issued u/s 148 of the Act under the amended provisions after passing the order u/s 148A(d), as available in the paper book page 10 for both the assessment years, it is observed that the same were issued after obtaining the approval from the Pr. Commissioner of Income Tax, Delhi-15, on 21.07.2022 though the order u/s 148A(d) was Printed from counselvise.com 14 ITA Nos.393 to 396/Del/2025 Heritage Lamps vs. ITO passed on 23.07.2022 after getting approval from the Pr. Chief Commissioner of Income Tax. 19. We find that section 148 of the Act was substituted by the Finance Act, 2021 w.e.f. 01.04.2021 and the notice issued u/s 148 of the Act under the old provisions of section 148 of the Act applicable till 31.03.2021 should have been issued only upto 31.03.2021. This issue stands settled by the Hon’ble Supreme Court in Union of India vs. Ashish Agarwal reported in 444 ITR 1 (SC). The AO has issued notice u/s 148A(b) on 18.05.2022 for both the assessment years and on 23.07.2022 orders were passed u/s 148A(d) and issued notice u/s 148 of the Act on the same date, i.e. on 23.07.2022 for both the years. This notice dated 23.07.2022 u/s 148 of the Act, are stated to have been issued after obtaining approval of Principal Commissioner of Income-tax, Delhi-15. This approval is contrary to the provisions of section 151 of the Act as amended/substituted by the Finance Act, 2021 where as per section 151 of the Act, if more than three years have lapsed from the end of the relevant assessment year, approval of Principal Chief Commissioner of Income-tax or Principal Director General or Chief Commissioner or Director General was required to be obtained. In the present case for both the assessment years, the notices u/s 148 have been issued on 23.07.2022 i.e., after expiry of three years from the end of relevant assessment years, therefore, sanction/approval for issue of notice u/s 148 must be obtained from Principal Chief Commissioner of Income-tax or Principal Director General or Chief Commissioner or Director General however, the same was granted by Pr.CIT, Delhi-15. Reliance in Printed from counselvise.com 15 ITA Nos.393 to 396/Del/2025 Heritage Lamps vs. ITO this regard is placed on the decision of the Hon’ble Supreme Court in Union of India vs. Rajeev Bansal, [2024] 469 ITR 46 (SC). Further the hon’ble jurisdictional high court in the case of Communist Party of India (Marxist) vs. CIT Exmpt. (supra) has dealt this issue and observed as under: “10. The impugned notice is also liable to be set aside on the ground that it was issued without the approval of the authority specified under Section 151 of the Act. Since the impugned notice was issued beyond the period of three years from the end of the relevant assessment year, thus, in terms of Section 151(ii) of the Act, the same was required to be approved by the Principal Chief Commissioner or Principal Director General or where there is no such authority, by Chief Commissioner or Director General. The determination of the specified authority for grant of approval under Section 151 of the Act depends on whether the notice under Section 148 of the Act has been issued after the expiry of three years from the end of the relevant assessment year or within the said period.\" 20. As observed above, notices u/s 148 for both the assessment years were issued on 23.07.2023 after obtaining the approval from Pr.CIT on 21.7.2023 thus, the approval was defective and consequent notices issued u/s 148 based on defective approval were invalid. Thus, the consequent orders passed by both the Assessment Years are quashed. Accordingly, Grounds of appeal No. 1 to 3 of the assessee are allowed. 21. Since we have allowed the legal grounds of appeal taken by assessee in both the appeal of the assessee, the other grounds of appeal are not adjudicated. Printed from counselvise.com 16 ITA Nos.393 to 396/Del/2025 Heritage Lamps vs. ITO 22. In the result, appeal of the assessee for AY 2016-17 in ITA No.396/Del/2025 and for AY 2017-18 in ITA No. 394/Del/2025 are allowed. 23. Now coming to the appeal of the assessee for AY 2019-20 in ITA No.395/Del/2025. ITA No.395/Del/2025 (ASSESSMENT YEAR: 2019-20) 24. The return of income u/s 139 of the Act was filed on 30.10.2019, declaring total income at Rs. 6,48,510/-. Notice u/s 148 of the Act was issued on 30.03.2023. The assessments were completed u/s 147 r.w.s. 144B of the Act vide order passed on 31.01.2024 by making various additions u/s 69C of the Act. Against the said order, appeal was filed before the ld. CIT(A) who vide order dt.14.11.2024 dismissed the appeal of the assessee. 25. Aggrieved by the said order of ld. CIT(A), assessee preferred present appeal before the Tribunal, by taking following grounds of appeals. 1. “On the facts and circumstances of the case and in law, the notice u/s 148 issued in this case is bad-in-law, illegal, without jurisdiction and barred by limitation and, therefore, the said notice u/s 148 along with assessment order passed on the foundation of such notice are liable to be quashed and CIT (A) erred in not holding so. 2. On the facts and circumstances of the case and in law, the reassessment proceedings initiated is bad in law, without jurisdiction and contrary to the provisions of law including the specific provisions of section 147 to section 151A Act and therefore, the reassessment proceeding initiated along with assessment order passed are liable to be quashed and CIT(A) erred in not holding so. Printed from counselvise.com 17 ITA Nos.393 to 396/Del/2025 Heritage Lamps vs. ITO 3. On the facts and circumstances of the case and in law, the assessment order passed by the assessing officer is bad-in-law, without jurisdiction and barred by limitation. 4. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the addition made by the assessing officer of Rs. 3,00,74,998/- on the account of unexplained expenditure u/s 69C of the Act. 5. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the addition made by the assessing officer of Rs. 15,39,782/- on the account of unexplained money u/s 69C of the Act.” 26. Before us, Ld. AR submits that for this year, notice u/s 148 was issued by ACIT, Circle-43(1), Delhi after passing the order u/s 148A(d) of the Act. Whereas, the return of income was filed by the assessee before the ITO, Ward 45(5), Delhi and ACIT, Circle-43(1), Delhi has no jurisdiction over the assessee. He further submits that the total income for the year under appeal was declared below Rs. 20 lacs and thus as per the Board Instruction No. 1/2011 dt. 31.1.2011, jurisdiction over the assessee lies with the ITO and not with ACIT/DCIT. Ld. AR further submits that no order u/s 127 was passed by the prescribed authority for transfer of case from ITO to ACIT. Ld.AR further submits that in preceding assessment years i.e. for AY 2014-15, AY 2016-17 and AY 2017-18, proceedings u/s 148 were initiated, where the order u/s 148A(d) of the Act were passed and notices u/s were issued by the ITO ward 45(1), Delhi. Ld. AR also filed the copy of notice issued u/s 148 for AY 2018-19 dtd. 31.08.2024 by the ITO, Ward 45(1), Delhi which is issued much a later date from the date of issue of notice u/s 148 for the impugned assessment year. Ld. AR thus, prayed that the reassessment order passed on the wrong assumption of Printed from counselvise.com 18 ITA Nos.393 to 396/Del/2025 Heritage Lamps vs. ITO jurisdiction by the ACIT, Circle 43(1), Delhi deserves to be hold as invalid and consequent re-assessment order passed, be quashed. 27. On the other hand, Ld. CIT DR for the Revenue supported the orders of the lower authorities and submits that ITO, Ward-43(1), Delhi had issued notice u/s 148 of the Act as the PAN was lying with him. It is thus, submitted by ld. CIT DR that there is no error in the notice issued u/s 148 of the Act. She prayed accordingly. 28. Heard the contentions of both parties and perused the material available on record. It is seen that in this case, orders for various assessment years were passed us/ 148A(d) of the Act followed by the notices u/s 148 but for the impugned year in the present appeal i.e., AY 2019-20, all the orders u/s 148A(d) and notices u/s 148 of the Act for other Assessment Years were passed by the ITO Ward 45(1), Delhi. Interestingly, subsequent notice u/s 148 for AY 2018-19 was also issued by the ITO Ward 45(1), Delhi on 31.08.2024. Further, the revenue has not been able to place before us any order passed us/ 127 of the Act for transfer of jurisdiction over the assessee from ITO ward 45(1) to ACIT, Circle 43(1), Delhi. 29. It is further observed that as per CBDT instruction No. 1/2011 dt. 31.1.2011, the territorial jurisdiction over the assessee lies with the ITO as the income of the assessee was below Rs. 20.00 lacs. It is an admitted position that in the present case, the notice Printed from counselvise.com 19 ITA Nos.393 to 396/Del/2025 Heritage Lamps vs. ITO u/s 148 was issued by the AO who was not having jurisdiction over the assessee thus, the reassessment order passed on wrong assumption of jurisdiction in the case of assessee is invalid. 30. The Jurisdictional High Court in the case of PCIT Vs. Vimal Gupta reported in 2017 (10) TMI 1670 (Delhi) under identical circumstances held as under: 1. “This is an appeal filed by the Revenue against an order dated 23rd December 2015 passed by the Income Tax Appellate Tribunal (‘ITAT’) in ITA No. 1211/Del/2010 for the Assessment Year (‘AY’) 2006-07. 2. Although other grounds have been pressed by the Revenue regarding the validity of the impugned order of the ITAT holding the assessment order passed under Section 148 of the Income Tax Act, 1961 (‘Act’) to be invalid, a threshold ground urged is that the ITAT erred in holding in the impugned order that the assessment made by the Additional Commissioner of Income Tax (‘ACIT’) Circle 34 (1) was without jurisdiction. It has been noticed that the matter was transferred to the said ACIT by the Income Tax Officer (‘ITO’) Ward 34 (4), New Delhi without an appropriate order having been issued under Section 127 of the Act. Further that the ACIT did not himself issue the notice under Section 148 of the Act. 3. The ITAT has in para 13 of the impugned order specifically adverted to the above aspect and correctly held that “The ACIT, Circle 34(1), New Delhi has admittedly not recorded that he had reasons to believe that income chargeable to tax of the Assessee has escaped assessment. He continued reassessment proceedings initiated by the ITO, Ward 34(4) of the Act without independently recording reasons for reopening or issuing a fresh notice u/s 148 of the Act.” Further the ITAT noted that “There is no order u/s 127 of the Act transferring the jurisdiction of the case from ITO, Ward 34(4) to ACIT, Ward 34(1). Thus this order of reassessment passed by the ACIT u/s 34(1) of the Act is without jurisdiction and hence is bad in law.” 4. In the present memorandum of appeal no attempt has been made by the Revenue to aver whether in fact there was an order under Section 127 of the Act transferring the case to the ACIT, Circle Printed from counselvise.com 20 ITA Nos.393 to 396/Del/2025 Heritage Lamps vs. ITO 34(1). That being the position, the impugned order of the ITAT cannot be faulted. In view of the above conclusion, there is no occasion to examine the other questions urged by the Revenue in this appeal. 5. No substantial question of law arises. The appeal is dismissed.” 31. The Co-ordinate Bench of Delhi Tribunal in the case of Sapna Rastogi Vs. ITO reported in 2024 (8) TMI 1517 (ITAT, Delhi) has held the reassessment order invalid when the wrong jurisdiction was assumed by issue of notice u/s 148 by the AO having no jurisdiction over the assessee. The relevant observations are as under: 5. “We have given thoughtful consideration to the matter on record and the submissions. The assessee had filed a return of income on 07.07.2013 declaring the total income at Rs. 18,85,550/-. The assessee is an individual and, taking into consideration Instruction No. 01/2011 available at page 245 of the paper book, for non-corporate returns in case of non-metro cities (mofussil areas), the returns above Rs. 15 lakhs have to be assessed by the officers of the rank of Assistant Commissioners/Deputy Commissioners. The report which is filed by the AO dated 26.06.2024 and reproduced above categorically mentions the fact that it is only on 15.05.2024, the PAN of the assessee has been transferred to ACIT, Circle 1(1)(1), Meerut, from ITO, Ward 1(2)(5), Meerut, as per CBDT Instruction No. 05/2011 dated 31.01.2011 vide which jurisdiction of noncorporate returns above Rs. 15 lakhs lies with ACIT/DCIT and upto Rs. 15 lakhs lies with ITO. 5.1 Now, admittedly, the notice u/s 148 dated 30.03.2021, copy of which is placed at page 7 of the paper book, is issued by ITO, Ward-1(2)(5), Meerut. Thus, certainly, this Revenue Officer did not have the pecuniary jurisdiction as vested by the Board vide CBDT Instructions No. 01/2011 dated 31.03.2011. 5.2 In this context, the coordinate Bench order in the case of J. Mitra & Brothers vs. ACIT, ITA No. 3643/Del/2023 decided on 10.04.2024 has been relied by the ld. AR wherein the coordinate Bench, relying another decision in the case of Kelvin International vs. DCIT, ITA No. 5363/Del/2017, order dated 22.12.2023, has held that the exercise of jurisdiction of Revenue Officer who did not have the jurisdiction given by the CBDT Printed from counselvise.com 21 ITA Nos.393 to 396/Del/2025 Heritage Lamps vs. ITO Instructions cannot be sustained and the assessment order is vitiated. The Hon’ble Allahabad High Court in the case of PCIT- II, Lucknow vs. Mohd. Rizwan, Proprietor M/s M.R. Garments, in ITA No. 1000/2015, order dated 30.03.2017 has examined this aspect on the basis of numerous judicial pronouncements and while considering the question, if the notice u/s 148 of the Act, issued by an authority not having jurisdiction, would be valid by referring to section 292BB of the Act, has held that jurisdiction can neither be waived nor created even by consent and even by submitting to jurisdiction, an assessee cannot confer upon any jurisdictional authority, some which he lack inherently. The Hon’ble Allahabad High Court has decided this issue against the Revenue holding that notice u/s 148 is not a procedural subject, but, a jurisdictional one as it is a condition precedent for initiation of proceedings. This judicial pronouncement squarely covers the issue in favour of the assessee. 5.3 The judgments which the ld. DR has relied when taken into consideration, are not applicable to the facts and circumstances as the judgements in the cases of Home Finders Housing Ltd. (supra) and Sagar Developers (supra) are in the context of the non-disposal of the objections and the judgement in the cases of Abhishek Jain (supra) and S.S. Ahluwalia (supra) are primarily concerned with territorial jurisdiction in regard to which there may be instance of concurrent jurisdiction of the two assessing officers. However, the case before us concerns the pecuniary jurisdiction vested by the Board and if that is not complied, the invoking of jurisdiction is vitiated and, consequently, the assessment order is vitiated. The ground No. 1 with sub-grounds in regard to this issue are sustained. 6. In the result, the appeal of the assessee is allowed and the assessment order is quashed.” 32. In the light of above facts and in the circumstances of the case, and by respectfully following the judgements of the Hon’ble Jurisdictional High Court in the case of Vimal Gupta (supra) and of the Co-Ordinate Bench in the case of Sapna Rastogi (supra), the re-assessment order passed is without jurisdiction as the notice u/s 148 was issued by the AO having no jurisdiction over the assessee and there was no order passed us/ 127 of the Act for transfer of jurisdiction. Accordingly, the re-assessment order dt. Printed from counselvise.com 22 ITA Nos.393 to 396/Del/2025 Heritage Lamps vs. ITO 31.1.2024 is invalid and thus is hereby, quashed. Grounds of appeal No. 1 to 3 taken by the assessee are allowed. 33. Since we have already allowed legal grounds of appeal, the other grounds of appeal are adjudicated. 34. In the final result, all captioned appeals of the assessee in ITA Nos. 393 to 396/Del/2025 [Assessment Years-2014-15, 2017-18, 2019-20, 2016-17] respectively, are allowed. Order pronounced in the open Court on 18.02.2026. Sd/- Sd/- Sd/- Sd/- /- (ANUBHAV SHARMA) (MANISH AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 18.02.2026. *Amit Kumar/Sr. Ps* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Printed from counselvise.com "