MARK FOODS,MUMBAI V. INCOME TAX OFFICER-28(2)(1), MUMBAI

ITA 4103/MUM/2024

AI Insights

The case involves two appeals by Mark Foods against the orders of the CIT(A), National Faceless Appeal Centre, which upheld the reassessment orders issued by the NeAC, Delhi, for the Assessment Years 2015-16 and 2016-17. The primary legal issues revolved around the validity of the notices issued under section 148 of the Income-tax Act, 1961, concerning procedural compliance and the applicability of the new regime of reassessment introduced by the Finance Act, 2021. The Tribunal examined whether the notices were issued within the permissible time limits and whether the appropriate level of authority approved the reassessment as required under the new regime.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 46923 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2016-2017
• Other Referred Cases: Hexaware Technologies Limited vs. ACIT, Ashok Commercial Enterprises vs. Asst. CIT, Union of India vs. Ashish Agrawal, Kishanchand Chellaram v. CIT, Andaman Timber Industries v. Commissioner of Central Excise, Siemens Financial Services (P.) Ltd. vs. Dy. CIT, ACIT vs. Nehal Ashit Shah, IBIBO Group Pvt. Ltd. vs. ACIT, Union of India v. Rajeev Bansal
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Reassessment proceedings; Bogus purchase; Period of limitation; Reopening of assessment; Principle of natural justice; Accommodation entries; Opportunity of cross examination; Borrowed satisfaction; Bogus
• Section: 147; 148; 144; 143(3); 68; 13; 69A; 153C; 73; 20

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA Nos. 4102 and 4103/MUM/2024 Assessment Years: 2015-16 and 2016-17 Mark Foods, J-24, APMC Market-II, Sector-19, Vashi, Navi Mumbai – 400705 (PAN : AAXFM0112C) Vs. Income Tax Officer-28(2)(1), Mumbai (Appellant) (Respondent) Present for: Assessee : Shri Shashank Mehta, CA Revenue : Shri R. R. Makwana, Addl. CIT Date of Hearing : 13.01.2025 Date of Pronouncement : 09.04.2025 O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: These two appeals filed by the Assessee are against the orders of Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, vide order nos. ITBA/NFAC/S/250/2024-15/1066868112(1) and ITBA/NFAC/S/250/2024-15/1066868114(1), dated 21.07.2024, passed against the assessment orders by NeAC, Delhi, u/s. 147 r.w.s 144 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 30.04.2023 and 18.03.2023, for Assessment Years 2015-16 and 2016-17. 2 ITA Nos. 4102 and 4103/Mum/2024 Mark Foods, AYs 2015-16 and 2016-17 2. Grounds taken by the Assessee are reproduced as under: ITA No. 4102/MUM/2024 “1. In the facts and circumstances of the case and in law, the Learned CIT(A) has erred in upholding the action of the Ld. Jurisdictional Assessing Officer of issuance of notice under section 148 dated 22.07.2022 which is barred by limitation and in violation of law laid down in the case of Hexaware Technologies Limited vs. ACIT [WP 1778/2023; order dated 03.05.2024](Bombay HC). 2. In the facts and circumstances of the case and in law, the Learned CIT(A) has erred in upholding the action of the Ld. Jurisdictional Assessing Officer of issuance of notice under section 148 in violation of provisions contained in section 151A of the Act and in violation of law laid down in the case of Hexaware Technologies Limited vs. ACIT [WP 1778/2023; order dated 03.05.2024](Bombay HC). 3. In the facts and circumstances of the case and in law, the Learned CIT (A) has erred in upholding the action of the Ld. Jurisdictional Assessing Officer of issuance of notice dated 22.07.2022 under section 148 without DIN thereby violating the binding direction as stated in Circular No. 09/2019 issued by the Central Board of Direct Taxes and in violation of law laid down in the case of Ashok Commercial Enterprises vs. Asst. CIT [2023] 154 taxmann.com 144 (Bombay HC) and Hexaware Technologies Limited vs. ACIT [WP 1778/2023; order dated 03.05.2024](Bombay HC). 4. In the facts and circumstances of the case and in law, the Learned CIT (A) has erred in upholding the action of the Ld. Jurisdictional Assessing Officer of issuing the notice dated 22.07.2022 under section 148 on the basis of the information not mentioned in Explanation 1 to section 148 of the Act. 5. In the facts and circumstances of the case and in law, the Learned CIT(A) has erred in upholding the action of the Ld. Jurisdictional Assessing Officer of initiating the reassessment proceedings u/s 147 instead of issuing notice under section 153C of the Act. 6. In the facts and circumstances of the case and in law, the Learned CIT (A) has erred in upholding the action of the Ld. Jurisdictional Assessing Officer of issuing notice u/s 148 on borrowed satisfaction merely relying on the basis of alleged information received without any independent application of mind thereon. 7. In the facts and circumstances of the case and in law, the Learned CIT (A) has erred in upholding the assessment order dated 18.03.2023 under section 147 r.w.s. 144 r.w.s. 144B which was passed on the basis of vague, ambiguous and incorrect findings leading to double taxations for the same transaction firstly under section 68 on account of unexplained source of income and secondly on account of alleged bogus purchase of Rs. 81,75,025/-. 8. In the facts and circumstances of the case and in law, the Learned CIT 3 ITA Nos. 4102 and 4103/Mum/2024 Mark Foods, AYs 2015-16 and 2016-17 (A) has erred in upholding the action of the Ld. Assessing Officer of completing the assessment u/s 143/3) read with section 147, without providing any opportunity of cross examination of the witnesses relied upon by the Assessing Officer and thus violating the law laid down by Honorable Supreme Court in the case of Kishanchand Chellaram v. CIT (1980) 125 ITR 713 and Andaman Timber Industries v. Commissioner of Central Excise (Civil Appeal No. 4228 of 2006.) 9. In the facts and circumstances of the case and in law, the Learned CIT (A) has erred in not condoning the delay in filing the appeal thereby violating the principles of natural Justice. 10. In the facts and circumstances of the case and in law, the Learned CIT(A) has erred in confirming addition of Rs. 81,75,025/-on account of unexplained source of income under section 68 merely on surmises, conjecture and suspicion. 11. In the facts and circumstances of the case and in law, the Learned CIT(A) has erred in confirming addition of Rs. 81,75,025/-on account of alleged bogus purchase merely on surmises, conjecture and suspicion. 12. The appellant craves leave to add, alter, delete or modify all or any of the above grounds of appeal. All the above grounds are without prejudice to each other.” ITA No. 4103/MUM/2024 “1. In the facts and circumstances of the case and in law, the Learned CIT(A) has erred in upholding the action of the Ld. Jurisdictional Assessing Officer of initiating the assessment under erstwhile section 147 by obtaining an invalid sanction u/s 151(i) from JCIT-27(2), Mumbai which was ought to have been obtained from jurisdictional Pr. CIT as per section 151(ii) since a period of 4 years has elapsed from the end of the relevant assessment year 2016-17. 2. In the facts and circumstances of the case and in law, the Learned CIT(A) has erred in upholding the action of the Ld. Jurisdictional Assessing Officer of initiating the assessment u/s 147 of the amended provisions by obtaining an invalid sanction u/s 151(i) from Pr. CIT-27, Mumbai which was ought to have been obtained from Principal chief commissioner of income tax as per section 151(ii) since a period of 3 years has elapsed from the end of the relevant assessment year thereby violating the law laid down in the case of Siemens Financial Services (P.) Ltd. vs. Dy. CIT [2023] 457 ITR 647 (Bombay HC). 3. In the facts and circumstances of the case and in law, the Learned CIT(A) has erred in upholding the action of the Ld. Jurisdictional Assessing Officer of issuance of notice under section 148 in violation of provisions contained in section 151A of the Act and in violation of law laid down in the case of Hexaware Technologies Limited VS. ACIT [WP 1778/2023; order dated 03.05.2024](Bombay HC). 4. In the facts and circumstances of the case and in law, the Learned CIT (A) has erred in upholding the action of the Ld. Jurisdictional Assessing Officer of issuance of notice dated 22.07.2022 under section 148 without DIN thereby 4 ITA Nos. 4102 and 4103/Mum/2024 Mark Foods, AYs 2015-16 and 2016-17 violating the binding direction as stated in Circular No. 09/2019 issued by the Central Board of Direct Taxes and in violation of law laid down in the case of Ashok Commercial Enterprises vs. Asst. CIT [2023] 154 taxmann.com 144 (Bombay HC) and Hexaware Technologies Limited vs. ACIT [WP 1778/2023; order dated 03.05.2024] (Bombay HC). 5. In the facts and circumstances of the case and in law, the Learned CIT (A) has erred in upholding the action of the Ld. Jurisdictional Assessing Officer of issuing the notice dated 22.07.2022 under section 148 on the basis of the information not mentioned in Explanation 1 to section 148 of the Act. 6. In the facts and circumstances of the case and in law, the Learned CIT(A) has erred in upholding the action of the Ld. Jurisdictional Assessing Officer of initiating the reassessment proceedings u/s 147 instead of issuing notice under section 153C of the Act. 7. In the facts and circumstances of the case and in law, the Learned CIT (A) has erred in upholding the action of the Ld. Jurisdictional Assessing Officer of issuing notice u/s 148 on borrowed satisfaction merely relying on the basis of alleged information received without any independent application of mind thereon. 8. In the facts and circumstances of the case and in law, the Learned CIT (A) has erred in upholding the action of the Ld. Assessing Officer of completing the assessment u/s 143(3) read with section 147, without providing any opportunity of cross examination of the witnesses relied upon by the Assessing Officer and thus violating the law laid down by Honorable Supreme Court in the case of Kishanchand Chellaram v. CIT (1980) 125 ITR 713 and Andaman Timber Industries v. Commissioner of Central Excise (Civil Appeal No. 4228 of 2006.) 9. In the facts and circumstances of the case and in law, the Learned CIT (A) has erred in not condoning the delay in filing the appeal thereby violating the principles of natural Justice. 10. In the facts and circumstances of the case and in law, the Learned CIT(A) has erred in confirming addition of Rs. 61,71,452/- on account of payment made for alleged bogus purchase as unexplained money under section 69A merely on surmises, conjecture and suspicion.” 3. We first take up appeal for A.Y. 2015-16 for which brief facts are that assessee filed its return of income on 25.09.2015, reporting total income at Rs.2,04,070/- which was processed u/s 143(1). Case of the assessee was re-opened by issuing notice u/s 148 of Act dated 28.06.2021. The said notice became deemed to be notice issued u/s.148A(b) under the new regime introduced by Finance Act, 2021 pursuant to the directions of Hon’ble Supreme Court in the case of 5 ITA Nos. 4102 and 4103/Mum/2024 Mark Foods, AYs 2015-16 and 2016-17 Union of India vs. Ashish Agrawal [2022] 444 ITR 1 (SC). To comply with the directions of Hon’ble Supreme Court, a notice u/s.148A(b) was issued on 24.05.2022. Assessee submitted its reply on 07.06.2022 in response to the said notice. 3.1. Thereafter, provisions of section 148A(d) were complied with by passing an order, dated 15.07.2022 and issuing a notice u/s.148 of the same date, under the new regime. Assessee has contested that the notice so issued is barred by limitation, making the impugned reassessment proceedings and resultant reassessment order bad in law. 4. At the outset, we find that this issue has been settled in the case of Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70 (SC) wherein reference is made to the submissions made on behalf of the Revenue vide para 19 which is relevant and the same is reproduced hereunder:- “19. Mr N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue: a. Parliament enacted TOLA as a free-standing legislation to provide relief and relaxation to both the assessees and the Revenue during the time of COVID- 19. TOLA seeks to relax actions and proceedings that could not be completed or complied with within the original time limits specified under the Income Tax Act, b. Section 149 of the new regime provides three crucial benefits to the assesses: (i) the four-year time limit for all situations has been reduced to three years, (ii) the first proviso to Section 149 ensures that re-assessment for previous assessment years cannot be undertaken beyond six years, and (iii) the monetary threshold of Rupees fifty lakhs will apply to the re- assessment for previous assessment years, c. The relaxations provided under Section 3(1) of TOLA apply \"notwithstanding anything contained in the specified Act.\" Section 3(1), therefore, overrides the time limits for issuing a notice under Section 148 read with Section 149 of the Income Tax Act; d. TOLA does not extend the life of the old regime. It merely provides a relaxation for the completion or compliance of actions following the procedure laid down under the new regime; 6 ITA Nos. 4102 and 4103/Mum/2024 Mark Foods, AYs 2015-16 and 2016-17 e. The Finance Act 2021 substituted the old regime for re-assessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of TOLA applies to the entire Income Tax Act including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(b) is read with TOLA, then all the notices issued between 1 April 2021 and 30 June 2021 pertaining to assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017 and 2017-2018 will be within the period of limitation as explained in the tabulation below; Assessme nt Year (1) Within 3 Years (2) Expiry of Limitation read with TOLA for (2) (3) Within six Years (4) Expiry of Limitation read with TOLA for (4) (5) 2013- 2014 31.03.2017 TOLA not applicable 31.03.2020 30.06.2021 2014- 2015 31.03.2018 TOLA not applicable 31.03.2021 30.06.2021 2015- 2016 3103.2019 TOLA not applicable 31.03.2022 TOLA not applicable 2016- 2017 31.03.2020 30.06.2021 31.03.2023 TOLA not applicable 2017- 2018 31.03.2021 30.06.2021 31.03.2024 TOLA not applicable f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA; g. Section 2 of TOLA defines \"specified Act\" to mean and include the Income Tax Act. The new regime, which came into effect on 1 April 2021, is now part of the Income Tax Act. Therefore, TOLA continues to apply to the Income Tax Act even after 1 April 2021; and h. Ashish Agarwal (supra) treated Section 148 notices issued by the Revenue between 1 April 2021 and 30 June 2021 as show-cause notices in terms of Section 148A(b). Thereafter, the Revenue issued notices under Section 148 of the new regime between July and August 2022. Invalidation of the Section 148 notices issued under the new regime on the ground that they were issued beyond the time limit specified under the Income Tax Act read with TOLA will completely frustrate the judicial exercise undertaken by this Court in Ashish Agarwal (supra). 7 ITA Nos. 4102 and 4103/Mum/2024 Mark Foods, AYs 2015-16 and 2016-17 4.1. Thus, it can be seen that Revenue conceded before the Hon’ble Supreme Court in para 19(f) for dropping all the notices issued on or after 01.04.2021 for A.Y. 2015-16 as they will not fall for completion during the period prescribed under TOLA. 5. This issue had come up before the Hon'ble Delhi High Court in the case of IBIBO Group Pvt. Ltd. vs. ACIT, WP(C)17639 of 2022, dated 13.12.2024 wherein re-assessment action for Assessment Year 2015- 16 was held to be not sustainable. Hon'ble Court quashed the notice issued u/s.148 as well as order passed u/s. 148A(d), dated 23.07.2022 for Assessment Year 2015-16 by following the decision in the case of Rajeev Bansal (supra). 5.1. In the case of present assessee, since the notice issued u/s.148 is dated 15.07.2022, period of six years expired on 31.03.2022 and is thus barred by limitation. Accordingly, notice so issued and re-assessment completed thereafter u/s. 147 is liable to be quashed, in view of the decision of Hon'ble Supreme Court in the case of Rajeev Bansal (supra) which was followed by Hon'ble Delhi High Court in the case of IBIBO (supra). 5.2. Hon'ble Supreme Court while dismissing the SLP filed by Revenue in the case of ACIT vs. Nehal Ashit Shah in SLP (Civil) Diary No(s). 57209/2024, dated 04.04.2025 held that it does not survive for further consideration. While holding so, Hon'ble Court noted in para 5 as under: “5. In this regard, reference could also be made to paragraph 19(e) and (f) in the case of Union of India vs. Rajeev Bansal, Civil Appeal No.8629 of 2024 on 03.10.2024 (2024 SCC ONLINE 754) under which the learned Additional Solicitor General for India has made a concession insofar as the assessment year 2015-16 is concerned.” 8 ITA Nos. 4102 and 4103/Mum/2024 Mark Foods, AYs 2015-16 and 2016-17 5.3. In view of above stated deliberation, both on facts and law including the applicable jurisprudence, we hold that notice for A.Y. 2015-16 issued on 15.07.2022 u/s 148 of the new regime is barred by limitation and hence bad in law, liable to be quashed, resulting in impugned reassessment proceedings as well as the impugned reassessment order bad in law. Accordingly, grounds raised by the assessee are allowed. 6. In respect of Assessment Year 2016-17, assessee contended on the legal issue that approval obtained by the ld. Assessing Officer for the purpose of issuing notice u/s 148 is not in accordance with the provisions of section 151 under the new regime of reassessment introduced by the Finance Act, 2021. Brief facts relevant to the issue are that assessee filed its return of income on 03.09.2016, reporting total income at Rs.1,24,410/- which was processed u/s 143(1). Case of the assessee was re-opened by issuing notice u/s 148 of Act dated 25.06.2021. The said notice became deemed to be notice issued u/s.148A(b) under the new regime introduced by Finance Act, 2021 pursuant to the directions of Hon’ble Supreme Court in the case of Ashish Agrawal (supra). To comply with the directions of Hon’ble Supreme Court, a notice u/s.148A(b) was issued on 24.05.2022. Assessee submitted its reply on 07.06.2022 in response to the said notice. Thereafter, provisions of section 148A(d) were complied with by passing an order, dated 22.07.2022 and issuing a notice u/s.148 of the same date, under the new regime. 9 ITA Nos. 4102 and 4103/Mum/2024 Mark Foods, AYs 2015-16 and 2016-17 7. According to the ld. Counsel, in the provisions for re-opening of assessment upon amendment by Finance Act, 2021, the first proviso to section 148 refers to approval by specified authority which is to be obtained before issuing notice u/s. 148. Section 151 describes specified authority for the purpose of section 148 and 148A, based upon the time limits within which the reopening proceedings are to be initiated i.e., i. By Principal Commissioner of Income Tax or Principal Director or Commissioner or Director, if three years or less than three years have lapsed from the end of the Assessment Year. ii. By Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, if more than three years have been lapsed from the end of the relevant Assessment Year. 7.1. Before us, ld. Sr. DR contended the subject matter on the legal issues raised by the assessee by giving an overview of the legal framework : pre and post amendment of the Act and TOLA’s interplay therewith. He has also analysed the decision of Hon’ble Supreme Court both in the case of Ashish Agrawal and Rajeev Bansal (supra) for the purpose of justifying the approval requirements which in the present case has been obtained from PCIT-27, Mumbai. He has referred to provisions of Section 149(1)(a) to emphasise that PCIT approval suffices in the present case. According to him, crux of the decisions of the Hon’ble Apex Court lies in giving temporal flexibility and not hierarchical escalation as contended by ld. Sr. DR. According to him, while the new regime applies procedurally, TOLA’s extended time line from the old regime survives, making the notice validly issued and thus subject to approval requirements of Section 151(1)(i), leaving no scope for an artificially heightened standard of CCIT/PCCIT approval. 10 ITA Nos. 4102 and 4103/Mum/2024 Mark Foods, AYs 2015-16 and 2016-17 8. Admitted position of fact in this case is that income chargeable to tax which escaped assessment is more than Rs.50,00,000/-, since ld. Assessing Officer has alleged that assessee had obtained accommodation entries for bogus bills amounting to Rs. 61,71,452/-. Also, it is undisputed that notice u/s.148 has been issued after the expiry of three years from the end of the relevant Assessment Year. Three years from the end of the Assessment Year 2016-17 lapsed on 31.03.2020. As per section 149(1)(b) of the Act (new regime), re- assessment proceedings could have been initiated after the expiry of three years from the end of the relevant Assessment Year only if the income chargeable to tax which escaped assessment is more than Rs.50,00,000/-. These admitted facts are relevant on the legal aspect relating to obtaining prior approval from the specified authority which are undisputed and nothing has been brought on record by the Revenue to controvert the same. 8.1 We find that in the decision by the Hon'ble Supreme Court in the case of Rajeev Bansal (supra), Hon'ble Court after the fall out of its own decision in the case of Ashish Agarwal (supra) had dealt with the issue in respect of sanction of the specified authority and concluded that TOLA will extend the time limit for the grant of sanction by the authority specified u/s.151. According to the Hon'ble Court, the test to determine whether TOLA will apply to section 151 of the new regime is that if the time limit of three years from the end of the Assessment Year falls between 20.03.2020 and 31.03.2021 then, the specified authority u/s.151(i) has extended time till 30.06.2021 to grant the approval. According to the Hon'ble Court, Assessing Officers were required to issue the re-assessment notice u/s.148 of the new regime within the time limit surviving under the Act read with TOLA. All notices issued 11 ITA Nos. 4102 and 4103/Mum/2024 Mark Foods, AYs 2015-16 and 2016-17 beyond the surviving period are time barred and liable to be set aside. Hon'ble Court had elaborately dealt with this issue in Part E of its decision in para 73 to 78 which are extracted below: 73. Section 151 imposes a check upon the power of the Revenue to reopen assessments. The provision imposes a responsibility on the Revenue to ensure that it obtains the sanction of the specified authority before issuing a notice under Section 148. The purpose behind this procedural check is to save the assesses from harassment resulting from the mechanical reopening of assessments. 128 A table representing the prescription under the old and new regime is set out below: 74. The above table indicates that the specified authority is directly co-related to the time when the notice is issued. This plays out as follows under the old regime: (i) If income escaping assessment was less than Rupees one lakh: (a) a reassessment notice could be issued under Section 148 within four years after obtaining the approval of the Joint Commissioner, and (b) no notice could be issued after the expiry of four years; and (ii) If income escaping was more than Rupees one lakh: (a) a reassessment notice could be issued within four years after obtaining the approval of the Joint Commissioner; and (b) after four years but within six years after obtaining the approval of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. 75. After 1 April 2021, the new regime has specified different authorities for granting sanctions under Section 151. The new regime is beneficial to the assessee because it specifies a higher level of authority for the grant of sanctions in comparison to the old regime. Therefore, in terms of Ashish Agarwal (supra), after 1 April 2021, the prior approval must be obtained from the appropriate 12 ITA Nos. 4102 and 4103/Mum/2024 Mark Foods, AYs 2015-16 and 2016-17 authorities specified under Section 151 of the new regime. The effect of Section 151 of the new regime is thus: (i) If income escaping assessment is less than Rupees fifty lakhs: (a) a reassessment notice could be issued within three years after obtaining the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director; and (b) no notice could be issued after the expiry of three years; and (ii) If income escaping assessment is more than Rupees fifty lakhs: (a) a reassessment notice could be issued within three years after obtaining the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director; and (b) after three years after obtaining the prior approval of the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. 76. Grant of sanction by the appropriate authority is a precondition for the assessing officer to assume jurisdiction under Section 148 to issue a reassessment notice. Section 151 of the new regime does not prescribe a time limit within which a specified authority has to grant sanction. Rather, it links up the time limits with the jurisdiction of the authority to grant sanction. Section 151(ii) of the new regime prescribes a higher level of authority if more than three years have elapsed from the end of the relevant assessment year. Thus, non- compliance by the assessing officer with the strict time limits prescribed under Section 151 affects their jurisdiction to issue a notice under Section 148. 77. Parliament enacted TOLA to ensure that the interests of the Revenue are not defeated because the assessing officer could not comply with the pre- conditions due to the difficulties that arose during the COVID-19 pandemic. Section 3(1) of TOLA relaxes the time limit for compliance with actions that fall for completion from 20 March 2020 to 31 March 2021. TOLA will accordingly 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 an extended time till 30 June 2021 to grant approval. 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 time till 31 March 2021 to grant approval. The time limit for Section 151 of the old regime expires on 31 March 2021 because the new regime comes into effect on 1 April 2021. 78. For example, the three years time limit for assessment year 2017-2018 falls for completion on 31 March 2021. It falls during the time period of 20 March 2020 and 31 March 2021, contemplated under Section 3(1) of TOLA. Resultantly, the authority specified under Section 151(i) of the new regime can grant sanction till 30 June 2021….. 81. This quote in Ashish Agrawal (supra) directed the Assessing Officers to “pass orders in terms of Section 148-A(d) in respect of each of the assessee concerned.” Further, it directed the Assessing Officers to issue a notice u/s.148 of the new regime “after following the procedure as required u/s.148-A.” Although this quote 13 ITA Nos. 4102 and 4103/Mum/2024 Mark Foods, AYs 2015-16 and 2016-17 waived off the requirement of obtaining prior approval u/s.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 u/s. 148A(d) or issuing a notice u/s.148. These notices ought to have been issued following the time limits specified u/s.151 of the new regime r.w. TOLA, where applicable…. 114. ……d. TOLA will extend the time limit for the grant of sanction by the authority specified u/s.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 u/s.151(i) has extended time till 30 June 2021 to grant approval; …” 8.2. From the above, we note that in para 73, in the table last two rows relate to provisions of Section 151(i) and (ii) of the new regime prescribing the time limit as well as the specified authority. In para 75, it is very categorically mentioned by the Hon’ble Court that after 01.04.2021, in terms of Ashish Agrawal (supra) the prior approval must be obtained from the appropriate authorities specified u/s.151 of the new regime. This abundantly brings clarity on the aspect of obtaining approval for issue of notice u/s.148 which are fall out of the decision in Ashish Agrawal (supra). In para 77, objective of section 3(1) of TOLA is mentioned which is to relax the time limit for compliance with actions that fall for completion from 20.03.2020 to 31.03.2021. Thus, the objective is specific for providing temporal flexibility. In para 78, the same has been explained by an example taking Assessment Year 2017- 18 which also in specific terms mentions that the authority specified u/s.151(i) of the new regime can grant sanction till 30.06.2021. Thus, while concluding in para 81 on the issue obtaining approval, Hon’ble Court has specifically stated that the Assessing Officer is required to obtain prior approval of the specified authority according to section 151 of the new regime before passing an order u/s.148A(d) or issuing a notice u/s.148. According to the Hon’ble Court, though it had waived 14 ITA Nos. 4102 and 4103/Mum/2024 Mark Foods, AYs 2015-16 and 2016-17 off the requirement obtaining prior approval u/s.148A(a) and Section 148Ab, it did not waive the requirement for section 148A(d) and Section 148. 8.3. Taking into consideration the submissions made by the ld. Sr. DR and keeping the same in juxtaposition with the above observations and findings of the Hon’ble Court, we note that the issue we are presently addressing raised before us is not on the aspect of “when” for the procedural compliance for issuance of notice u/s.148 but on the aspect of “by whom” it ought to have been issued. Ld. Sr. DR has contended that there is hierarchical escalation vis-à-vis obtaining approval for issuing notice u/s.148. In this respect, Hon’ble Court has very categorically held in para 75 that the prior approval must be obtained from the appropriate authorities specified u/s.151 of the new regime for the notices issued in terms of Ashish Agrawal (supra) after 01.04.2021. Reference by ld. Sr. DR to Section 149(1)(a) deals with time limit for issuing notice u/s.148. Contention of the ld. Sr. DR that there is no hierarchical escalation for obtaining prior approval for issuing notice u/s.148 is not in coherence with the guidelines mandated by the Hon’ble Apex Court as enunciated above. Repeatedly, Hon’ble Court has stated including by way of illustration that TOLA extends time line from the old regime which survives making the notice validly issued subject to the approval requirements of Section 151 under the new regime. Accordingly, the prior approval requirement is mandated under the section 151 of new regime. 15 ITA Nos. 4102 and 4103/Mum/2024 Mark Foods, AYs 2015-16 and 2016-17 8.4. In the present case, the relevant Assessment Year is 2016-17 and the time limit of three years lapsed on 31.03.2020 which falls between 20.03.2020 and 31.03.2021 during which provisions of TOLA would apply. Accordingly, the amended provisions under the Act read with TOLA extended the time limit for granting of approval till 30.06.2021 by the specified authority. Thus, on the above stated facts and law, in the present case, three years had lapsed from the end of the Assessment Year when the order u/s.148A(d) and notice u/s.148 was issued on 22.07.2022. In the present case, since the notice u/s. 148 and order u/s. 148A(b) have been issued beyond the period of three years from the end of the relevant Assessment Year, case of the assessee falls within the provisions of section 151(ii) of the amended law whereby the specified authority for grant of approval is specified as Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. Contrary to this requirement, the approval obtained is by Principal Commissioner of Income Tax-27, Mumbai. Accordingly, since a proper sanction by the specified authority had not been obtained for issue of notice u/s.148 under the applicable provisions of law, said notice is invalid and bad in law. 8.5. Keeping in juxtaposition the undisputed and the uncontroverted facts as stated above and the judicial precedent of the Hon'ble Supreme Court in the case of Ashish Agarwal and Rajiv Bansal (supra), we hold that sanction by specified authority has not been obtained by the ld. Assessing Officer in accordance with the provisions contained in section 151 of the Act under the new regime, since notice u/s.148 has been issued beyond three years from the end of the relevant Assessment Year. Accordingly, the said notice issued is invalid and thus quashed. Resultantly, the impugned re-opening proceedings so initiated and the 16 ITA Nos. 4102 and 4103/Mum/2024 Mark Foods, AYs 2015-16 and 2016-17 impugned re-assessment order passed thereafter are also quashed. Grounds raised by the assessee in this respect are allowed. 9. In the result, both the appeals filed by assessee are allowed. Order is pronounced in the open court on 09 April, 2025 Sd/- Sd/- (Saktijit Dey) (Girish Agrawal) Vice President Accountant Member Dated: 09 April, 2025 MP, Sr.P.S. Copy to : 1 The Appellant 2 The Respondent 3 DR, ITAT, Mumbai 4 5 Guard File CIT BY ORDER, (Dy./Asstt.Registrar) ITAT, Mumbai "