NIRAJ SARJU MANDAL ,MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 41(3)(1), MUMBAI

ITA 2294/MUM/2025

AI Insights

The case involves an appeal by Niraj Sarju Mandal against the order of the CIT(A)/NFAC, which pertained to the assessment year 2016-17. The primary contention was the validity of the reopening of the assessment under section 147 and the issuance of notice under section 148. The assessee argued that the notice was issued without the necessary sanction as per the amended provisions of section 151(ii) of the Income Tax Act, which came into effect from April 1, 2021. The tribunal agreed with the assessee's argument, referencing a similar decision in ACIT Vs Manish Financial, and thus allowed the appeal, rendering the notice and subsequent proceedings void ab initio.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712400 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2016-2017
• Other Referred Cases: ACIT Vs Manish Financial in ITA No. 5050/Mum/2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDRA MOHAN
• Assessee Lawyers: DEVENDRA JAIN
• Section: 147; 148

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 2294/MUM/2025 (AY: 2016-17) (Physical hearing) Niraj Sarju Mandal B-503, Sankalp 2, Goregaon Link Road, Pimpripada, Malad, Mumbai-400097. [PAN No. AHUPM1815G] Vs DCIT Central Circle-41(3)(1), KautilyaBhavan, BandraKurla Complex, Bandra (East), Mumbai – 400051. Appellant / Assessee Respondent / Revenue Assessee by Sh. Devendra Jain, CA Revenue by Sh. Surendra Mohan, Sr. DR Date of Institution 01.04.2025 Date of hearing 15.07.2025 Date of pronouncement 01.08.2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assessee is directed against the order of Ld. CIT(A)/NFAC dated 20.02.2025 for assessment year (AY) 2016-17. 2. Rival submissions of both the parties have heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that though, the assessee has raised multiple grounds of appeal, however, at this stage the assessee pressing against validity of reopening under section 147 and issuance of notice under section148. Once, such issue is held in favour of assessee, other legal issue and grounds of appeal on merit will become academic. The case of assessee for A.Y. 2016-17 was reopened by issuing notice under section 148 dated 30.06.2022. The case of assessee was reopened beyond three years from the end of relevant assessment year. As per amended provision of section 147/148, inserted by Finance Act 2021, applicable from 01.04.2021, the assessing officer was required to obtain Printed from counselvise.com ITA No. 2294/Mum/2025 Niraj Sarju Mandal 2 sanction/approval under section 151(ii) from Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. However, in the present case, the assessing officer obtained approval of Pr. Commissioner of Income Tax as recorded in the notice under section 148 dated 30.06.222 itself. Thus, notice under section 148 is issued without proper sanction which renders the notice invalid; therefore, subsequent action initiated on such invalid has become void ab initio. To support his submission, the ld AR of the assessee relied on the decision of Mumbai Tribunal in ACIT Vs Manish Financial in ITA No. 5050/Mum/2024 dated 02.12.2024. 3. On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the revenue after going through the contents of notice under section 148 submits that he supports the order of lower authorities. 4. I have considered the contentions of both the parties and have gone through the orders of lower authorities carefully. On perusal of record and the order of lower authorities, I find merit in the submission of ld. AR of the assessee that case of assessee for A.Y. 2016-17 was reopened beyond three years from the end of relevant assessment year, thus, as per amended provisions of section 151(ii) the ld. Assessing Officer was required to obtain approval from Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. However, in the present case, the ld. Assessing Officer has obtained approval / sanction from Pr. CIT which is invalid. Thus, notice under section 148 is invalid being without sanction of law; therefore, subsequent action initiated thereon has become void ab initio. Similar view was taken by Mumbai Tribunal in ACIT Vs Manish Financial (supra). In the result, notice Printed from counselvise.com ITA No. 2294/Mum/2025 Niraj Sarju Mandal 3 under section 148 and proceeding under section 147 are quashed. In the result, the assessee succeeded on the primary submissions of his ld AR. 5. Considering the fact that assessee has succeeded on first legal issue, therefore, adjudication on the grounds on merit have become academic. 6. In the result, the appeal of the assessee is allowed. Order was pronounced in the open Court on 01/08/2025. Sd/- PAWAN SINGH JUDICIAL MEMBER MUMBAI, Dated 01/08/2025 Biswajit Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order Assistant Registrar ITAT, Mumbai Printed from counselvise.com "