MANISH JASHWANTRAI BHUTA,NASHIK V. ITO WARD 1(1), NASHIK

ITA 1503/PUN/2025

AI Insights

The case involves an appeal by Manish Jashwantrai Bhuta against the order of the CIT(A) NFAC, Delhi, which arose from an assessment order for the assessment year 2017-18. The primary legal issue was the validity of the reassessment proceedings initiated by the Income Tax Officer (ITO) Ward-1(1), Nashik, through a notice under section 148 of the Income Tax Act, issued on 20.07.2022, without proper approval under section 151, as required for notices issued after three years from the end of the assessment year. The Tribunal examined the compliance with section 151, particularly the requirement for approval from the Principal Chief Commissioner or equivalent, due to the notice being issued beyond the stipulated three-year period.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775454 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 13-06-2025
• Other Referred Cases: Bhagwan Sahai Sharma v. DCIT, ITO v. Rajaram Ramswarup Jaju, Satish Harnamdas Sethi v. NFAC, Mark Foods v. ITO, UOI v. Rajeev Bansal, Cipla Pharma and Life Sciences Ltd. v. DCIT, Core Logistic Company Vs Assistant Commissioner of Income Tax & others
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY DHIVARE
• Assessee Lawyers: SANKET JOSHI
• Keywords: Reassessment proceedings; Audit objection
• Section: 147; 148; 132; 90

Judgement Text

" आयकर अपीलीय अधिकरण \" एस एम सी \"न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL \"SMC\" BENCH, PUNE BEFORE Dr. MANISH BORAD, ACCOUNTANT MEMBER आयकर अपील सं / ITA No.1503/PUN/2025 धििाारण वर्ा / Assessment Year: 2017-2018 Manish Jashwantrai Bhuta, Flat No-8, Pooja Apartment, Shivam Nagar, Hirawadi, Panchavati, Nashik-422003 Maharashtra PAN-AGHPB1619F Vs ITO Ward-1(1), Nashik Appellant Respondent Assessee by : Shri Sanket Joshi Revenue by : Shri Sanjay Dhivare, Addl. CIT Date of hearing : 12.08.2025 Date of pronouncement : 08.09.2025 आदेश/ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER :- The captioned appeal at the instance of assessee is directed against the order of Ld. CIT(A) NFAC, Delhi dated 26.02.2025 which is arising out of assessment order passed u/s 147 r.w.s. 144B of the Income Tax Act dated 23.05.2023 for A.Y. 2017-18 framed by Assessment unit, Income Tax Department. 2. The assessee has raised as many as eleven grounds of appeal but I will first take up the legal issue raising ground No. 1 challenging the validity of the re-assessment proceedings as no valid approval u/s 151 of the act has been obtained by the Assessing Officer (AO) for issuing notice u/s 148 of the Act. Printed from counselvise.com 2 ITA No.1503/PUN/2025 3. At the outset Ld. Counsel for the assessee submitted that the assessment for A.Y. 2017-18 has been reopened by issuance of notice u/s 148 of the Act on 20.07.2022 and for issuing such notice a proper approval u/s 151 of the Act needs to be taken and Ld. AO has obtained the approval from Principal Commissioner of Income Tax, Nashik dated 15.07.2022. He submitted that since the notice has been issued beyond three years from the end of assessment year the specific approval authority prescribed u/s 151 of the Act is Principal Chief Commissioner of Income Tax or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, then Chief Commissioner of Income Tax or Director General. He submitted that since valid approval has not been taken u/s 151 of the Act the re-assessment proceedings deserve to be held as illegal and bad in law. In support reliance placed on the following decisions. 1. Bhagwan Sahai Sharma v. DCIT [(2025) 9 NYPCTR 725 (Delhi HC)] dated 14.05.2025 2. ITO v. Rajaram Ramswarup Jaju [(2025) 39 NYPTTJ 568 (Pune)] 3. Satish Harnamdas Sethi v. NFAC [ITA No. 3091/Mum/2024] dated 24.12.2024 4. Mark Foods v. ITO [35 NYPTTJ 843 (Mumbai)] dated 09.04.2025 5. UOI v. Rajeev Bansal [301 Taxman 238] 6. Cipla Pharma and Life Sciences Ltd. v. DCIT [8 NYPCTR 867 (Bom HC)] 7. Core Logistic Company Vs Asssistant Commissioner of Income Tax & others, High Court of Madras (2025) 9 NYPCTR 879 (Madras) dated 05.06.2025 4. On the other hand Ld. Departmental Representative (DR) supported the order of Ld. CIT(A) but failed to place Printed from counselvise.com 3 ITA No.1503/PUN/2025 any binding precedence in favour of the revenue on the issue under consideration. 5. I have heard rival contentions and perused the record placed before me. Validity of re-assessment proceedings carried out u/s 147 r.w.s 144B of the Act dated 23.05.2023 have been challenged on the ground that valid notice u/s 148 of the Act has not been issued because no proper approval u/s 151 of the Act has been taken. Ld. Counsel for the assessee has referred and relied on plethora of decisions and judgements. I would however like to refer to the judgement of the Hon’ble High Court of Madras in the case of Core Logistic Company (Supra) wherein Hon’ble Court dealing with the very same issue has held as under:- 5. 1 have given due considerations to the submissions made on either side and perused the materials available on record. 6. In the present case, the issue is pertaining to the asst. yr. 2016-2017. The relevant law applicable for issuance of notice under s. 148 is as follows: \"148. Before making the assessment, reassessment or re- computation under s. 147, and subject to the provisions of s. 148A. the AO shall serve on the assessee a notice, along with a copy of the order passed, if required, under cl. (d) of s. 148A, requiring him to furnish within such period, as may be specified in such notice, 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 s. 139: Printed from counselvise.com 4 ITA No.1503/PUN/2025 Provided that no notice under this section shall be issued unless, there is information with the AO which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the AO has obtained prior approval of the specified authority to issue such notice: Provided further that no such approval shall be required where the AO, with the prior approval of the specified authority, has passed an order under ci, (d) of s. 148A to the effect that it is a fit case to issue a notice under this section. Explanation. 1-For the purposes of this section and s. 148A, the information with the AO which suggests that the income chargeable to tax has escaped assessment means,- (1) any information in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time; (ii) any audit objection to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act, or (iii) any information received under an agreement referred to in s. 90 or s. 90A of the Act; or (iv) any information made available to the AO under the scheme notified under s. 135A or (v) any information which requires action in consequence of the order of a Tribunal or a Court Explanation. 2 For the purposes of this section, where,- (1) a search is initiated under s. 132 or books of account, other documents or any assets are requisitioned under s. 132A, on or after the 1st day of April, 2021, in the case of the assessee, or Printed from counselvise.com 5 ITA No.1503/PUN/2025 (ii) a survey is conducted under s. 133A, other than under sub-s. (2A) 22(........) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or (iii) the AO is satisfied, with the prior approval of the Principal CIT or CIT, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under s. 132 or s. 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (iv) the AO is satisfied, with the prior approval of Principal CIT or CIT, that any books of account or documents, seized or requisitioned under s. 132 or s. 132A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, the AO shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee where the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person. Explanation. 3. For the purposes of this section, specified authority means the specified authority referred to in s. 151.\" 7. A perusal of the above provision would show that, before issuing any notice under s. 148, the AO has to obtain prior approval of the specified authority to issue such notice. The specified authority is also defined in explanation of the above provision. As per the above provision, specified authority is the authority who referred to in s. 151. 8. At this juncture, it would be relevant to extract the provision of s. 151, which is as follows: \"Specified authority for the purposes of s. 148 and s. 148A shall be: Printed from counselvise.com 6 ITA No.1503/PUN/2025 (1) Principal CIT or Principal Director or CIT or Director, if three years or less than three years have elapsed from the end of the relevant assessment year; (ii) Principal Chief CIT or Principal Director General or Chief CIT or Director General, if more than three years have elapsed from the end of the relevant assessment year.\" 9. A perusal of s. 151(1) would show that, the specified authority for the purpose of issuing notice under s. 148 within a period of three years from the end of the relevant assessment year is, the Principal CIT or Principal Director or CIT or Director. Further, in terms of provision of s. 149, three year time period is fixed for issuance of 148 notice, in the event of the amount is below 50 lakhs. In the present case, the amount involved is Rs. 3,65,09,748, which is more than 50 lakhs. 148 notice was issued on 25th July, 2022, which is beyond the period of three years. So admittedly, the approval has to be obtained from the Principal Chief CIT or Principal Director General or Chief CIT or Director General as defined under s. 151(ii). But, in the present case, the approval was obtained from the Principal CIT in terms of s. 151(i) and no approval was obtained before Issuance of 148 notice in terms of provision of s. 151(ii), which is mandatory. Therefore, the notice under s. 148 was issued in the present case in violation of provision of s. 151(ii) of the IT Act. In view thereof, the initiation of proceedings itself is without any jurisdiction. Hence, the same is liable to be quashed. 10. Accordingly, the impugned proceedings of the 3rd respondent dt. 30th May, 2023 is hereby quashed. 11. In the result, this writ petition stands allowed. Consequently, connected miscellaneous petitions are closed. Printed from counselvise.com 7 ITA No.1503/PUN/2025 6. Now examining the facts of the instant case, in the light of the above judgement I notice that the notices u/s 148 of the Act for carrying out the reassessment proceedings for A.Y. 2017-18 has been issued on 20.07.2022. Also the first notice u/s 148A(b) has been issued on 26.05.2022. Therefore the notices u/s 148 of the Act has been issued after three years from the end of the Assessment Year. Now since the notice has been issued after three years from the end of A.Y. 2017-18, Ld. AO is required to take approval u/s 151 of the Act from Principal Chief Commissioner, Income Tax and other Officers mentioned in section 151(ii). However Ld. AO in the instant case has taken the approval from the authorities mentioned in section 151(i) of the Act i.e. from Principal Commissioner of Income Tax and such approval is valid only if the notice u/s 148 of the Act has been issued in less than three years from the end of relevant A.Y. I therefore find that Ld. AO has not taken a valid approval as provided in section 151 of the Act and in absence of such valid approval the notice issued u/s 148 of the Act is without jurisdiction, bad in law and is in violation in provisions of section 151(ii) of the Act. Therefore the initiation of the reassessment proceedings in the instant case is without any jurisdiction and therefore such proceedings are quashed. The legal issue raised in ground No. 1 in assessee’s appeal is allowed. Dealing with the remaining grounds would be nearly academic in nature as the reassessment proceedings have already been quashed and impugned additions deleted. Grounds of appeal raised by the assessee are allowed as per terms indicated above. Printed from counselvise.com 8 ITA No.1503/PUN/2025 7. In the result appeal of the assessee is allowed. Order pronounced on this 08th day of September, 2025. Sd/- (MANISH BORAD) ACCOUNTANT MEMBER पुणे/ Pune; दििांक / Dated: 08th September, 2025. Neeta आिेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to: 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. धवभागीय प्रधिधिधि, आयकर अपीलीय अधिकरण, \"SMC\" बेंच, पुणे / DR, ITAT, \"SMC\" Bench, Pune. 5. गार्ा फाइल / Guard File. आिेशािुसार / BY ORDER, Senior Private Secretary आयकर अपीलीय अधिकरण, पुणे / ITAT, Pune. Printed from counselvise.com "