KOTWALIA BUILDERS LLP (ERSTWHILE KNOWN AS KOTWALIA BUILDERS PRIVATE LIMITED),DELHI V. INCOME TAX OFFICER, WARD 14(3), DELHI

ITA 2124/DEL/2025

AI Insights

The case involves Kotwalia Builders LLP appealing against an order from the National Faceless Appeal Centre (NFAC), which arose from an earlier assessment order by the Assessing Officer (AO) for the Assessment Year 2016-17. The primary legal contention was regarding the validity of the approval under Section 151 of the Income Tax Act, 1961, necessary for the issuance of a notice under Section 148A(d). The Tribunal referenced a decision by the Supreme Court in the case of Rajiv Bansal, which clarified the requirements for such approvals under the new regime of the Income Tax Act. The Tribunal found that the approval in this case did not comply with these requirements, leading to the quashing of the assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 788789 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: misc
• Appeal Filed On: 31-03-2025
• Other Referred Cases: M/s Essel Housing Projects Pvt. Ltd. Vs. DCIT, Union of India vs. Rajeev Bansal
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANISH GUPTA
• Assessee Lawyers: SUMIT LALCHANDANI
• Section: 148

Judgement Text

"P a g e | 1 ITA No.2124/Del/2025 Kotwalia Builders LLP (AY: 2016-17) IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No. 2124/Del/2025 (Assessment Year: 2016-17) Kotwalia Builders LLP (Erstwhile known as Kotwalia Builders Pvt. Ltd.) B-38, Sagar Apartments, 6, Tilak Marg, New Delhi – 110001 Vs. ITO, Ward 14(3) C.R. Building , I.P. Estate New Delhi – 110002 \u0001थायीलेखासं./जीआइआरसं./PAN/GIR No: AAUFK3865H Appellant .. Respondent Appellant by : Sh. Sumit Lalchandani, Adv Sh. Utkarsa Gupta, Adv. Respondent by : Sh. Manish Gupta, Sr. DR Date of Hearing 16.09.2025 Date of Pronouncement 28.11.2025 O R D E R PER ANUBHAV SHARMA, JM: This appeal is preferred by the assessee against the order dated 08.01.2025 of the National Faceless Appeal Centre (NFAC) Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN & Order No. ITBA/NFAC/S/250/2024-25/1071970572(1) arising Printed from counselvise.com P a g e | 2 ITA No.2124/Del/2025 Kotwalia Builders LLP (AY: 2016-17) out of the appeal before it against the order dated 24.05.2023 passed 147 r.w.s 144 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the Ld. AO for Assessment Year 2016-17. 2. At the time of hearing the Ld. Counsel has pressed for ground No. 3 to be disposed of as the approval granted under Section 151 of the Act is alleged to be not in accordance with law. In this context, it comes up as an admitted fact that approval of PCIT, Delhi-4, was taken while issuing of order under Section 148A(d) of the Act on 27.07.2022. The year involved is AY 2016-17 and under new regime approval from PCCIT was needed. The issue is covered in favour of the assessee by the decision of Hon’ble Supreme Court in the case of Rajiv Bansal and the same has been relied upon by the Coordinate Bench in the case of M/s Essel Housing Projects Pvt. Ltd. Vs. DCIT, in ITA No. 1899 & 1900/Del/2025, the relevant portion of the case is reproduced as under: “3. In regard to ITA No.1900/Del/2025 for AY 2017-18, the ld. AR has submitted that there was no valid approval for the purpose of section 151 of the Act and appreciating the contention of the ld. AR, we find that in the present case, order u/s 148A(d) has been passed and, thereafter, notice u/s 148 has been issued. The order u/s 148A(d) has been passed and notice issued on 27.07.2022, i.e., after three years from the end of AY 2017-18. The Hon’ble Supreme Court in Union of India vs. Rajeev Bansal, 2024 (10) TMI 264, order dated 03.10.2024, has held in para 81 as follows:- Printed from counselvise.com P a g e | 3 ITA No.2124/Del/2025 Kotwalia Builders LLP (AY: 2016-17) “81. This Court in Ashish Agarwal (supra) directed the assessing officers to “pass orders in terms of Section 148-A(d) in respect of each of the assesses concerned.” Further, it directed the assessing officers to issue a notice under Section 148 of the new regime “after following the procedure as required under Section 148-A.” Although this Court waived off the requirement of obtaining prior approval under Section 148A(a) and Section 148A(b), it did not waive the requirement for Section 148A(d) and Section 148. Therefore, the assessing officer was required to obtain prior approval of the specified authority according to Section 151 of the new regime before passing an order under Section 148A(d) or issuing a notice under Section 148. These notices ought to have been issued following the time limits specified under Section 151 of the new regime read with TOLA, where applicable. 4. Thus, prior approval of Principal Chief Commissioner or Principal Director General and where these two authorities are not there, then, the Chief Commissioner or Director General are competent authorities to grant the approval. However, in the case in hand, such approval of these competent authorities have not been taken and the copy of notice on record shows that the approval has been accorded by the Principal Commissioner of Income-tax-1, New Delhi on 27.07.2022 which seems to have been as per the old regime. Thus, we are inclined to sustain the ground no.4 in impugned order for in AY 2017-18. The appeal of the assessee in ITA No.1900/Del/2025 is allowed. The impugned assessment is quashed. 3. In the light of the aforesaid the legal ground is sustained and the impugned assessment is quashed. 4. The appeal of the assessee is allowed. Order pronounced in the open court on 28.11.2025 Sd/- (Manish Agarwal) Sd/- (Anubhav Sharma) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 28.11.2025 Rohit, Sr. PS Printed from counselvise.com P a g e | 4 ITA No.2124/Del/2025 Kotwalia Builders LLP (AY: 2016-17) Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Printed from counselvise.com "