MADGUL SERVICES PRIVATE LIMITED,KOLKATA V. DCIT, CIRCLE 11(1), , KOLKATA

ITA 348/KOL/2025

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The case involves Madgul Services Private Ltd, which appealed against the order of the CIT(A), National Faceless Appeal Centre, Delhi, concerning the assessment year 2016-2017. The primary contention was the validity of the proceedings initiated under section 148 of the Income Tax Act, which were deemed invalid as they were reopened beyond the permissible period of three years from the end of the assessment year, based on an incorrect approval from the Pr.CIT under section 151 of the Act. The Income Tax Appellate Tribunal, Kolkata, after reviewing the arguments and relevant legal precedents, including a significant Supreme Court decision, ruled in favor of the assessee, quashing the reassessment proceedings.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772399 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2016-2017
• Other Referred Cases: Rajeev Bansal vs. 469 ITR 46 (SC), Shri Devang Ajit Jhaveri vs. ITA No.3509/Mum/2024, Sakshi Ratneshchand Jain vs. ITA No.1741/Mum/2024, Kusum Healthcare Pvt. Ltd. vs. order dated 05.03.2025, Chandrakant Viththal Bhopi vs. ITA No.2405/Pune/2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANGTINLEN HAOKIP
• Assessee Lawyers: SUNIL SURANA
• Keywords: Invalid notice

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER आयकर अपील सं/ITA No.348/KOL/2025 (निर्धारण वर्ा / Assessment Year : 2016-2017) Madgul Services Private Ltd, 20, Ballygunge Circular Road, Ballygunge, Kolkata-700019 Vs DCIT, Circle-11(1), Kolkata PAN No. :AABCM 7691 K (अपीलधर्थी /Appellant) .. (प्रत्यर्थी / Respondent) निर्धाररती की ओर से /Assessee by : Shri Sunil Surana, AR रधजस्व की ओर से /Revenue by : Shri Mangtinlen Haokip, Sr.DR सुनवाई की तारीख / Date of Hearing : 28/07/2025 घोषणा की तारीख/Date of Pronouncement : 26/08/2025 आदेश / O R D E R Per Rajesh Kumar, AM : This is an appeal filed by the assessee against the order dated 28.12.2024, passed by the ld. CIT(A), National Faceless Appeal Centre, Delhi, for the assessment year 2016-2017. 2. The only issue raised by the ld. counsel of the assessee during the course of hearing was that the proceedings initiated u/s.148 of the Act is invalid as the case is reopened beyond a period of three years from the end of the assessment year based upon the invalid approval granted by the Pr.CIT u/s.151 of the Act. 3. Facts in brief are that notice u/s.148 of the Act was issued on 30.07.2022 and the impugned assessment year is 2016-2017. In para 3 of the notice u/s.148 of the Act, it is mentioned that the said notice is being issued after obtaining the prior approval of the Pr.CIT-2, Kolkata accorded on 28.07.2022 vide Reference No.AABCM7691K. The Assessing Officer finally passed the assessment order after calling information from the Printed from counselvise.com ITA No.348/KOL/2025 2 assessee by disallowing the loss claimed by the assessee to the tune of Rs.2,85,00,136/-. Ld.CIT(A) dismissed the appeal of the assessee and, hence, the assessee is in appeal before us. 4. After hearing the rival contentions and perusing the material available on record, we find that admittedly, the case of the assessee has been reopened after a period of three years from the end of the assessment year and, therefore, the sanction of ld. Pr.CCIT has to be obtained for issuing notice u/s.148 of the Act and not the ld. Pr.CIT whose approval was in fact obtained for issuance of notice. Therefore, the reopening of the assessment on the basis of the said notice is not sustainable in the eyes of law. The issue is no more res integra, as the Hon’ble Supreme Court in the case of Rajeev Bansal, reported in 469 ITR 46 (SC) has held vide para 114(d) that it is the Pr.CCIT who should grant sanction u/s.151 of the Act since the reopening is after three years. We also note that the said decision of the Hon’ble Apex Court has been followed in series of decisions by the various Tribunal and Hon’ble High Courts. Some of the decisions wherein the decision of the Hon’ble Supreme Court has been followed, are as under :- i) Shri Devang Ajit Jhaveri, ITA No.3509/Mum/2024, dated 29.01.2025 (AY : 2016-2017); ii) Sakshi Ratneshchand Jain, ITA No.1741/Mum/2024, dated 10.02.2025 (AY : 2016-2017); iii) Kusum Healthcare Pvt. Ltd., order dated 05.03.2025 (AY: 2016- 2017)(Delhi High Court); iv) Chandrakant Viththal Bhopi, ITA No.2405/Pune/2024, dated 07.05.2025 (AY : 2016-2017). 5. In view of the above, we quash the invalid notice issued u/s.148 of the Act holding the same as void ab initio as the same is based upon the Printed from counselvise.com ITA No.348/KOL/2025 3 invalid approval granted u/s.151 of the Act. In consequence thereof, the reassessment proceeding in the case of the assessee is also hereby quashed. 6. In the result, appeal of the assessee is allowed. Order pronounced in the open court on 26/08/2025. Sd/- (PRADIP KUMAR CHOUBEY) Sd/- (RAJESH KUMAR) न्यधनयक सदस्य / JUDICIAL MEMBER लेखा सदस्य/ ACCOUNTANT MEMBER कोलकाता Kolkata; ददनाांक Dated 26/08/2025 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतललपप अग्रेपर्त/Copy of the Order forwarded to : sआदेशधिुसधर/ BY ORDER, (Assistant Registrar) Income Tax Appellate Tribunal, Kolkata 1. अपीलार्थी / The Appellant- 2. प्रत्यर्थी / The Respondent- 3. आयकर आयुक्त(अपील) / The CIT(A), 4. आयकर आयुक्त / CIT 5. विभागीय प्रविविवि, आयकर अपीलीय अविकरण, कोलकाता / DR, ITAT, Kolkata 6. गार्ड फाईल / Guard file. सत्यापपत प्रतत //True Copy// Printed from counselvise.com "