RAZIULLA SYED,HYDERABAD V. ITO (INT TAXN)-2, HYDERABAD

ITA 986/HYD/2024

AI Insights

The case involves Raziulla Syed, a Non-Resident Indian, who appealed against the final assessment order passed by the Income Tax Officer (International Taxation)-2, Hyderabad. The assessment was based on alleged unexplained investments and income not reported in the assessment year 2017-2018, following a search and seizure operation. The Tribunal examined the legality of the notice issued under section 148 and the subsequent assessment, focusing on the procedural compliance with the amended provisions of the Income Tax Act post the Supreme Court's judgment in Union of India vs. Ashish Agarwal. The Tribunal found procedural lapses in obtaining the necessary approval for reopening the assessment, leading to the quashing of the assessment order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471484 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2017-2018
• Other Referred Cases: Union of India vs. Ashish Agarwal, Farooq Ali vs. ITO, Syed Gulam Mohiuddin vs. ITO, Mir Ibrahim Ali vs. ACIT, Sri Dinakara Suvarna, Shyam Sunder Khandelwal, G. Koteswara Rao, Rajeev Suresh Ghai vs. ITO, Madhusudan Rao vs. DCIT, Iqbal Ismail Virani vs. ITO, Hemant Manukhal Pandya vs. DCIT, Zainab Investments Private Limited vs. ITO, Manish Financial vs. ACIT, Manish Jagdish Joshi vs. CIT, Siemens Financial Services (P.) Ltd. vs. DCIT, Bharat Kumar Jayantibhai Patel vs. ACIT, ITO vs. Shri Mirza Rafiullah
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B.BALAKRISHNA
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Reassessment proceedings; Unexplained investment; Cost of acquisition; Reopening of assessment; Capital Gains; TDS; Search and seizure; Double taxation relief; Residential status
• Section: 147; 148; 143(2); 64; 153C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “A” BENCH : HYDERABAD BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MANJUNATHA G, ACCOUNTANT MEMBER ITA.No.986/Hyd/2024 Assessment Year 2017-2018 Raziulla Syed, Hyderabad - 500 082. PAN BOTPS1888C vs. The Income Tax Officer, (Int. TAXN.)-2, Hyderabad. (Appellant) (Respondent) For Assessee : CA P Murali Mohan Rao For Revenue : Shri B. Bala Krishna, CIT-DR Date of Hearing : 17.02.2025 Date of Pronouncement : 11.03.2025 ORDER PER MANJUNATHA G, A.M. : This appeal has been filed by the Assessee against the final assessment order of the learned ITO- (Intl.Taxn.)-2, Hyderabad, dated 02.03.2024, pursuant to the directions of Disputes Resolution Panel-1 [in short “DRP”], Bengaluru, directions dated 29.02.2024, passed u/sec.144C(5) of the Income Tax Act, 1961 [in short “the Act”], relating to the assessment year 2017-2018. 2 ITA.No.986/Hyd./2024 2. At the very outset, there is a delay of 134 days in filing the appeal before the Tribunal. The assessee has filed an affidavit explaining the reasons for condonation of delay. We are satisfied with the reasons furnished by the assessee for the delay in filing the appeal. We, therefore, condone the delay of 134 days in filing the appeal before the Tribunal and proceed to adjudicate the appeal on merits as under. 3. Facts of the case, in brief, are that the assessee is a Non-Resident Indian and working as Sr. Foreman (Civil Contracts) in Facilities Management Department with M/s. Qatar Energy and filed letter dated 25.08.2022 from his employer. A search and seizure operation under section 132 of the Act was conducted on 22.10.2019 in the case of M/s. Skill Promoters Pvt Ltd, City Centre Mall, 6th Floor, Road No.1, Hyderabad, which is engaged in the business of Construction (Builders). The said company has entered into a Development Agreement with landlords and developed a commercial mall named \"Sarath City Capital Mall\" at Kondapur, Hyderabad. During the course of search and seizure proceedings, incriminating information(s)/ 3 ITA.No.986/Hyd./2024 document(s)/loose sheets/documents pertaining to the assessee viz., Shri Raziulla Syed were found and as per which certain data in the form of excel sheets with respect to sale of commercial space were seized in pen drive. As the information contained in the seized document relates to the assessee, he along with one other had purchased a commercial property for a sale consideration of Rs.2,56,00,000/- during the year under consideration. Out of the total sale consideration, the assessee along with one other have paid an amount of Rs.1,11,50,000/- in cash and the balance amount of Rs.1,40,00,000 was paid through cheque. Since the assessee is having 50% share, he had paid an amount of Rs.70,00,000/- through cheque and an amount of Rs.55,75,000/- was paid in cash. On verification, the Assessing Officer noticed that the assessee has not filed return of income for the year under consideration. Thus, the sources of the cash purchases remain unverified and hence escaped assessment. The Assessing Officer further noted that the assessee has also purchased equity shares for an amount of Rs.1,09,462/- and sold equity shares of 4 ITA.No.986/Hyd./2024 Rs.53,200/- and has interest income of Rs.225/- from banks on which TDS has been deducted u/s.195 of the IT Act, 1961. Therefore, in absence of proper explanation offered by the assessee with supporting documentary evidences such as bank statements etc., the Assessing Officer reopened the case of the assessee for assessment u/sec.147 of the Act and issued show cause notice u/sec.148A(b) of the Act originally under old procedure on 23.04.2021. 3.1. Subsequently, in light of Judgment of Hon’ble Supreme Court in the case of Union of India vs. Ashish Agarwal [2022 SCC Online SC 543] related to reopening of assessment in Sections 147, 148, 149 and 151 were substituted by a completely new regime through the Finance Act, 2021 were with effective from 01.04.2021 prescribed under the same provisions (Sections 147-151), including a new provision Section 148A prescribing the procedure for reopening and reassessment proceedings. In pursuance to the Judgment of the Hon’ble Supreme Court the CBDT vide it’s instruction No.1/2022 dated 11.05.2022, 5 ITA.No.986/Hyd./2024 directed the Assessing Officers to pass on the benefit of new law shall be made available even in respect of proceedings relating to past assessment years. Therefore, by following the due procedure, the Assessing Officer issued notice u/sec.148 of the Act dated 30.07.2022. 3.2. In response to the said notice, the assessee filed return of income on 03.09.2022 declaring income at Rs.225/- for the impugned assessment year 2017-18. Thereafter, the Assessing Officer issued statutory notices u/sec.142(1) and 143(2) of the Act asking the assessee to furnish his reply with respect to purchase of the property and his residential status. In response to the said notices, the assessee had submitted copy of sale deed dated 15.06.2019 for a consideration of Rs.70 lakhs duly mentioning his Axis Bank A/c.xxxxx3124, but, not filed the bank statement. And to prove his Non-Resident status, the assessee has furnished his passport copy, resident permit and a letter dated 25.08.2022 from his employer M/s. Qatar Energy to the effect that he is working as Sr. Foreman (Civil 6 ITA.No.986/Hyd./2024 Contracts) in Facilities Management Department as on 25.08.2022 with M/s. Qatar Energy. 3.3. Upon verification of the documents, the Assessing Officer noted that assessee has paid cash over and above the registered value to M/s. Skill Promoters Pvt. Ltd., towards purchase of the commercial property i.e, part of Unit No.1F 031-036 with a built-up area of 2000 sft on the first floor with undivided share of land of 40 sq. yards in the shopping mall and multiplex known as “Sarath City Capital Mall, Kondapur”. The Assessing Officer noted that out of the total sale consideration of Rs.1,28,00,000/-, the assessee has paid an amount of Rs.1,25,75,000/- as on the date of search, out of which, an amount of Rs.70 lakhs was paid in cheque and Rs.55,75,000/- was paid in cash and balance sum of Rs.2,25,000/- was due to be paid to the builder. Therefore, the Assessing Officer asked the assessee to furnish all the bank account statements reflecting the payment made of Rs.70,00,000/- in cheque to the builder as per the sale deed Doct. No. 15272/2019, dated 15.06.2019 and was also requested to submit proofs/ 7 ITA.No.986/Hyd./2024 evidences such as withdrawals from the banks, for payment of Rs.55,75,000/- in cash to the builder vide notice issued u/sec.142(1) of the Act dated 24.04.2023 to show cause as to why an amount of Rs.55,75,000/- paid in cash should not be treated as unexplained investment u/sec.69A of the Act and also requested the assessee to furnish the details of purchase of equity shares of Rs.1,09,462/- and sale of equity shares of Rs.53,200/- on or before 04.05.2023 and extended time till 15.05.2023 as requested by the assessee. In view of non-compliance by the assessee to the show cause letter dated 08.05.2023 issued u/s.142(1) of the Act during the course of assessment proceedings and in absence of relevant bank account statements, the Assessing Officer treated a sum of Rs.22 lakhs paid to the Vendor through banking channel as unexplained investment out of Rs.70 lakhs and made the addition of Rs.22 lakhs in the hands of the assessee to the return of income. Similarly, for the impugned property, the assessee out of the total sale consideration of Rs.1,28,00,000/-, an amount of Rs.1,25,75,000/- was paid by the assessee as on the date of 8 ITA.No.986/Hyd./2024 search and in that an amount of Rs.70 lakhs was paid in cheque and Rs.55,75,000/- was paid in cash. In absence of proofs/evidences such as withdrawals from the bank towards the aforesaid sum of Rs.55,75,000/- paid to the Vendor viz., M/s. Skill Promoters Pvt. Ltd., the Assessing Officer treated the same as unexplained investment u/sec.69A of the Act and added back the same to the returned income of the assessee. The Assessing Officer also added a sum of Rs.53,200/- towards long term capital gains on sale of shares. Accordingly, the Assessing Officer determined the total income of the assessee at Rs.79,37,887/- as against the returned income at Rs.225/- vide draft assessment order dated 19.05.2023 passed u/sec.147 r.w.s.144C(13) of the Income Tax Act, 1961. 3.4. On being aggrieved by the draft assessment order dated 19.05.2023, the assessee filed his objections before the DRP. 3.5. The learned DRP noted that the notice issued by the Assessing Officer under old tax regime u/sec.148A(b) dated 23.04.2021 is deemed to be the show cause notice 9 ITA.No.986/Hyd./2024 and the subsequent sec.148 notice dated 30.07.2022 is in accordance with law and the jurisdiction of the Assessing Officer in issuing notice u/sec.148 is as per the provisions of the Income Tax Act, 1961. The DRP further rejected the ground of the assessee that sec.69A is not applicable to NRI and confirmed the additions made by the Assessing Officer in absence of any documentary evidences/bank statements vide directions dated 29.02.2024 passed u/sec.144C(5) of the Act. 3.6. Pursuant to the above directions of the DRP dated 29.02.2024, the Assessing Officer passed his final assessment order dated 02.03.2024 u/sec.147 r.w.s.144C(13) of the Act by making additions on account of long term capital gains on sale of equity shares of Rs.53,200/-; unexplained investment in purchase of equity shares of Rs.1,09,462/- and unexplained investment u/sec.69A in purchase of property of Rs.55,75,000/- and determined the total income of the assessee at Rs.57,37,887/- as against the returned income of Rs.225 by the assessee. 10 ITA.No.986/Hyd./2024 4. Aggrieved by the final assessment order of the Assessing Officer, the assessee carried the matter in appeal before the Tribunal challenging the validity of notice issued u/sec.148 of the Act dated 30.07.2022 as well as the additions made by the Assessing Officer u/sec.69A of the Act. 5. During the course of hearing, Learned Counsel for the Assessee invited the attention of the Bench that the final assessment order dated 02.03.2024 passed by the Assessing Officer is time barred by limitation on the ground that as per the provisions of sec.153(2) of the Act, order of assessment, reassessment or pre-computation shall be made under section 147 before the expiry of twelve months from the end of the financial year in which the notice under section 148 was served. He submitted that in the instant case the Assessing Officer has issued notice u/sec.148 on 23.04.2021 and the time limit to complete the assessment u/sec.147 was 31.03.2023, whereas, the Assessing Officer passed the final assessment order u/sec.147 r.w.s.14C(13) of the Act on 02.03.2024 which is time barred. In support of 11 ITA.No.986/Hyd./2024 this contention, he relied on the Coordinate Bench decision of ITAT, Hyderabad in the cases of Farooq Ali vs. ITO ITA.No.104/Hyd./2023; in the case of Syed Gulam Mohiuddin vs. ITO ITA.No.136/Hyd./2023 and in the case of Mir Ibrahim Ali vs. ACIT. 5.1. Learned Counsel for the Assessee further invited the attention of the Bench with respect to initiation of proceedings u/sec.147 is invalid as the approval as per provisions of sec.151 of the Act was obtained from PCIT and as per the amended provisions of sec.151(ii) of the Act the Specified/Competent Authority is “Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year.\" However, in the instant case the Assessing Officer issued initial notice u/sec.148 on 23.04.2021 and later on again issued notice on 30.07.2022 i.e., more than 3 years from the end of the impugned assessment year involved in the present appeal i.e., 2017- 12 ITA.No.986/Hyd./2024 2018 with the prior approval of Pr. CIT-1, Hyderabad dated 27.07.2022. Thereby, it was the submission of the Learned Counsel for the Assessee that approval of Specified Authority u/sec.151(ii) of the Act is not obtained at the time of issue of notice u/sec.148 which is mandatory as per the law existing on that prevailing day. He accordingly submitted that since the root of initiation of proceedings u/sec.148 is invalid as there is no prior approval from the specified authority u/sec.151(ii) of the Act. Consequently, the final assessment order dated 02.03.2024 will become invalid. In support of this contention, the Learned Counsel for the Assessee relied on the decision of ITAT Mumbai Bench in the cases of ACIT vs Manish Financial and Manish Jagdish Joshi vs. CIT. 5.2. Learned Counsel for the Assessee, during the course of hearing raised another contention that two assessment proceedings cannot be carried parallelly for the same assessment year on account of issuing notices u/sec.148 dated 23.04.2021 and on 30.07.2022 by relying on the decision of Bharat Kumar Jayantibhai Patel vs. ACIT 13 ITA.No.986/Hyd./2024 and decision of ITAT, Hyderabad Bench, Hyderabad in the case of ITO vs. Shri Mirza Rafiullah. 5.3. Learned Counsel for the Assessee further submitted that the Assessing Officer was erred in initiating the proceedings u/sec.147 of the Act instead of 153C. He submitted that where there is a search u/sec.132 of the Act and found any incriminating material related to other person i.e., in the present case search was conducted in M/s. Skill Promoters Pvt. Ltd., and found loose sheets pertains to the assessee viz., Raziulla Syed. He submitted that when there was a search conducted u/sec.132 of the Act and some incriminating material was impounded or relatable to the person other than on whom search was conducted, section 153C is to be resorted to. He accordingly submitted that reopening of assessment u/sec.147 and issuance of notice u/sec.148 dated 30.07.2022 are invalid and needs to be quashed as the assessment was completed u/sec.147 instead of sec.153C. In support of this contention, he relied on the decision of Hon’ble Supreme Court in the case of Sri Dinakara Suvarna, Judgment of 14 ITA.No.986/Hyd./2024 Hon’ble Rajasthan High Court in the case of Shyam Sunder Khandelwal [2024] 161 taxmann.com 255 (Raj.) and decision of ITAT, Visakhapantam in the case of G. Koteswara Rao [2015] 64 taxmann.com 159 and such other decisions of Coordinate Benches of the Tribunal. 5.4. Learned Counsel for the Assessee lastly drew the attention of the Bench with respect to the additions of Rs.55,75,000/-; Rs.53,200/- and Rs.1,09,462/- towards payment made to M/s. Skill Promoters Pvt. Ltd., in connection with purchase of property and long term capital gains on sale of equity shares, respectively, made by the Assessing Officer u/sec.69A of the Act. He submitted that the assessee is a NRI and assessee had not earned any income in India and the amount invested is from out of the amounts received from the assessee’s own earnings outside India and not from the income accrued or arisen in India. Therefore, the Assessing Officer cannot invoke the provisions of sec.69A of the Act and make the impugned addition in the hands of the assessee. He submitted that the Assessing Officer ought to have appreciated the DTAA 15 ITA.No.986/Hyd./2024 entered between India and Qatar as the assessee has already paid the tax on income earned in Qatar and taxing the same income again in India would lead to double taxation which is injustice to the assessee and bad in law. In support of this contention, the Learned Counsel for the Assessee relied upon the decision of ITAT, Mumbai Bench in the case of ITO, Mumbai vs. Rajeev Suresh Ghai [2021] 132 taxmann.com 234 (Mumbai-Trib.); DCIT vs. Madhusudan Rao [2015] 57 taxmann.com 262; Iqbal Ismail Virani vs. ITO [2021] 128 taxmann.com 181 and DCIT vs. Hemant Manukhal Pandya [2018] 100 taxmann.com 280. He submitted that the impugned addition of Rs.55,75,000/- was made by the Assessing Officer on the basis of loose sheets which are un-authenticated, unsigned and un- reliable material and they are ‘dumb’ documents. He submitted that the purchase consideration in respect of the impugned property is of Rs.70 lakhs which is final and no cash payment was made by the assessee. In support of this contention, the Learned Counsel for the Assessee relied on 16 ITA.No.986/Hyd./2024 the decision of ITAT, Hyderabad Bench in the case of Zainab Investments Private Limited. 5.5. The Learned Counsel for the Assessee drew the attention of the Bench with respect to making addition of Rs.53,200/- on account of long term capital gains on sale of equity shares and submitted that the Assessing Officer had not provided cost of acquisition of shares while calculating the long term capital gains. He submitted that the purchase value of the shares was at Rs.51,379.32 and the Assessing Officer without considering the purchase value of the shares, proposed the impugned addition on selling value of shares of Rs.52,718.54ps and the long term capital gains in the case of assessee is of Rs.1339.22ps only. He, therefore, submitted that the addition made by the Assessing Officer on account of long term capital gains on sale of equity shares is incorrect and bad in law. The Learned Counsel for the Assessee also further submitted that as per the provisions of the Income Tax Act, 1961, as per sec.112A of the Act, long term capital gains on sale of equity shares shall be liable to tax @ 10% in excess of Rs.1,00,000/-. In 17 ITA.No.986/Hyd./2024 the present case, the assessee has long term capital gains of Rs.1339.22ps which is below the threshold limit of Rs.1,00,000/-. Therefore, the assessee is entitled for exemption of the tax. 5.6. On similar addition of Rs.1,09,462/- as unexplained investment u/sec.69A of the Act in purchase of equity shares, the Learned Counsel for the Assessee submitted that sec.69A can be invoked by the Assessing Officer only when the assessee made investments out of unexplained income earned in India. And the Assessing Officer has not made such allegations that assessee had earned income in India and out of that he made the impugned investment. He submitted that the source of investment in shares cannot be doubted as the assessee is Non-Resident Indian and do not have any such source of income in India in the instant appeal and as such, the addition made by the Assessing Officer u/sec.69a of the Act is invalid and deserves to be deleted. 18 ITA.No.986/Hyd./2024 6. The Learned DR on the other relied on the orders of the authorities below. He submitted that admittedly the assessee has not furnished bank statements or documentary evidences to substantiate his claim and in absence of such evidences, the impugned additions made by the Assessing Officer, confirmed by the DRP and the final assessment order passed by the Assessing Officer pursuant to DRP directions is in accordance with law and as per the provisions of the Income Tax Act, 1961 whether in case of issuance of notice u/sec.148 or invoking the provisions of sec.69A of the Act towards unexplained investments. He accordingly pleaded that the final assessment order passed by the Assessing Officer be confirmed in the interest of justice. 7. We have heard the rival submissions of both the parties and perused the material available on record. There is no dispute between the parties that the assessee is a Non- Resident Indian. Admittedly, in the instant case, the assessment has been reopened u/sec.147 of the Act by issuance of notice u/sec.148 of the Act dated 23.04.2021 19 ITA.No.986/Hyd./2024 and by virtue of the order of Hon’ble Supreme Court in the case of Union of India vs. Ashish Agarwal reported in 2022- SC-Online-SC-543, re-assessment notice issued has been treated as notice issued u/sec.148A of the Act and after due procedure final notice u/sec.148 of the Act dated 30.07.2022 was issued. The assessee contends that any re- assessment notice issued u/sec.148 of the Act after 1st April, 2021 falls under New Scheme of re-assessment proceedings and as per sec.151, the approval of the Specified Authority as specified therein should be obtained. According to the assessee, under New Scheme of re- assessment proceedings, the Specified Authority u/sec. 151(ii) of the Act, in case an assessment is reopened after a period of three years from the end of the relevant assessment year, the Principal Chief Commissioner or Principal Director General are the Specified Authority(ies). Since in the present case, the Assessing Officer has issued notice u/sec.148 of the Act dated 30.07.2022 after approval from Principal Commissioner of Income Tax-1, Hyderabad, the said approval is not in accordance with provision of 20 ITA.No.986/Hyd./2024 sec.151(ii) of the Act and consequently, the notice issued by the Assessing Officer and assessment order passed u/sec.147 r.w.s.144C(13) of the Act dated 02.03.2024 is illegal, void abinitio and liable to be quashed. 7.1. There is no dispute with regard to the fact that the Assessing Officer issued original notice u/sec.148 of the Act for the assessment year in question on 23.04.2021 and as per new scheme of re-assessment procedure, the same has been treated as notice issued u/sec.148A of the Act in light of decision of Hon’ble Supreme Court in the case of Union of India vs. Ashish Agarwal (supra) and finally re- assessment notice u/sec.148 was issued to the assessee on 30.07.2022 after approval from the Principal Commissioner of Income Tax-1, Hyderabad dated 27.07.2022. As per the provisions of sec.151(ii) of the Act, if the reopening of the assessment is after three years from the end of the relevant assessment year, then the Specified Authority for grant of approval is Principal Chief Commissioner of Income Tax or Principal Director General of Income Tax and this legal principle is supported by the decision of Hon’ble Supreme 21 ITA.No.986/Hyd./2024 Court in the case of Union of India vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC) wherein the Hon’ble Supreme Court has analysed the issue in light of decision of Hon’ble Supreme Court in the case of Union of India vs. Ashish Agarwal (supra), relevant Circulars/Notifications issued by CBDT and provisions of Taxation and Other Laws Amendment Act, 2021 [in short “TOLA”] and after considering relevant facts held that after 01.04.2021, the New Regime has specified different authorities for granting sanction u/sec.151(ii) of the Act and in case the assessment is reopened after three years from the end of the relevant assessment year, then the Specified Authority to grant sanction is the Principal Chief Commissioner of Income Tax or Principal Director General of Income Tax. In the present case, there is no dispute with regard to the fact that the Assessing Officer issued notice u/sec.148 of the Act dated 30.07.2022 with the prior approval of Principal Commissioner of Income Tax-1, Hyderabad accorded on 27.07.2022 vide Ref.F.No.Pr.CIT-1/Hyd/147/2022-23. Therefore, in our considered view, notice issued by the 22 ITA.No.986/Hyd./2024 Assessing Officer u/sec.148 of the Act dated 30.07.2022 with the approval of Principal Commissioner of Income Tax- 1, Hyderabad dated 27.07.2022 is not in accordance with the provisions of sec.151(ii) of the Act and consequently, the re-assessment order passed by the Assessing Officer u/sec.147 r.w.s.144C(13) of the Act is illegal, void abinitio and liable to be quashed. 7.2. The assessee has relied upon the decision of ITAT, Mumbai in the case of ACIT vs. Manish Financial ITA.No.5055/Mum./2024 wherein the Tribunal after considering the relevant provisions of law and also by following decision of Hon’ble Supreme Court in the case of Union of India vs., Rajeev Bansal (supra) held as under : \"In assessee's case from the perusal of para 3 of the notice issued under section 148 for AY 2016-17 we notice that the same is issued with the prior approval of Pr.CIT-19 Mumbai accorded on 29.07.2022 vide reference No.Pr.CIT-19/148/2022-23 and this fact is not contravened by the ld DR. For AY 2016-17, the 23 ITA.No.986/Hyd./2024 period of three years have elapsed as of 31.03.2020 and the notice is issued beyond three years on 30.07.2022. Therefore as per the decision of the Hon'ble Supreme Court, the approval should have been obtained under the amended provisions of section 151(ii) of the Act i.e. the approval should have been obtained from the Principal Chief Commissioner whereas the approval has been obtained from Pr. CIT as stated in the notice under section 148 itself. Therefore we see merit in the contention of the assessee that the notice under section 148 for AY 2016-17 is issued without obtaining the prior approval from the appropriate authority. Accordingly we hold that the notice under section 148 is invalid and the consequent assessment under section 147 is liable to be quashed.\" 7.3. The assessee also relied upon the decision of ITAT, Mumbai Bench in the case of Manish Jagdish Joshi vs. CIT ITA.No.1617/Mum./2024 and the Mumbai Bench of the Tribunal by following the decision of Hon’ble Bombay 24 ITA.No.986/Hyd./2024 High Court in the case of Siemens Financial Services (P.) Ltd., vs. DCIT [2023] 457 ITR 647 (Bom.) held as under : “We find that while considering the similar issue and similar submissions the Hon'ble Jurisdictional High Court in Siemens Financial Services (P.) Ltd. v/s DCIT, (2023) 457 ITR 647 (Bom.) held that TOLA would not affect the scope of section 151 and sanction of Specified Authority was to be obtained in accordance with the law existing when the sanction was obtained. It was further held that where the Assessing Officer issued a reopening notice beyond the period of three years, approval was required to be taken as per provisions of amended section 151 from the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. Therefore, respectfully following the aforesaid decision of the Hon'ble Jurisdictional High Court we find no merits in the reliance placed by the Revenue on the provisions of TOLA. As, in the present case, the period of three years has elapsed from the end of the relevant 25 ITA.No.986/Hyd./2024 assessment year and the order dated 23/05/2022 was passed under section 148A(d) of the Act after obtaining the approval of the Principal CIT-1, Mumbai vide letter dated 15/07/2022, we are of the considered view that the Revenue has not followed the mandatory provisions of the Act while initiating the reassessment proceedings and sanction of the Specified Authority is not in conformity with the law prevalent at the time of grant of sanction.\" 7.4. In this view of the matter and by respectfully following the decision of Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal (supra) and also the decisions of ITAT, Mumbai Benches, Mumbai in the cases of ACIT vs. Manish Financial and Manish Jagdish Joshi vs. CIT (supra), we are of the considered view that the notice issued by the Assessing Officer u/sec.148 of the Act dated 30.07.2022 by obtaining prior approval from the Principal Commissioner of Income Tax-1, Hyderabad dated 27.07.2022 and consequential final assessment order dated 02.03.2024 passed by the Assessing Officer u/sec.147 26 ITA.No.986/Hyd./2024 r.w.s.144C(13) of the Act is illegal, void abinitio and thus, we quash the final assessment order dated 27.07.2022 passed by the Assessing Officer. 8. In the result, appeal of the Assessee is allowed. Order pronounced in the open Court on 11.03.2025 Sd/- Sd/- [VIJAY PAL RAO] [MANJUNATHA G] VICE PRESIDENT ACCOUNTANT MEMBER Hyderabad, Dated 11th March, 2025 VBP Copy to 1. Raziulla Syed, Hyderabad - 500 082. C/o. P. Murali & Co. Chartered Accountants, 6-3-655/1/3, Somajiguda, Hyderabad - 500 082. 2. The Income Tax Officer, (Int-Taxn.)-2, Hyderabad. 3. The Pr. CIT, Hyderabad. 4. The DR ITAT “A” Bench, Hyderabad. 5. Guard File. //By Order// //True Copy// Sr. Private Secretary, ITAT, Hyderabad Benches, Hyderabad. "