RMP HOLDINGS PRIVATE LIMITED,DELHI V. INCOME TAX OFFICER, WARD 20(3), DELHI, DELHI

ITA 4592/DEL/2025

AI Insights

RMP Holdings Private Limited filed appeals against the orders of the Commissioner of Income Tax (Appeals), which upheld the reassessment orders for the Assessment Years 2012-13 and 2014-15. The reassessments were based on the premise that the assessee had taken accommodation entries in the form of loans, which were not fully disclosed in the original assessments. The Tribunal examined the legal validity of the reassessment proceedings, focusing on the compliance with procedural requirements under sections 147, 148, 151, and 153C of the Income Tax Act. The Tribunal noted discrepancies in the reasons recorded for reopening the assessments and the authority's approval process, leading to the conclusion that the reassessments were conducted without proper jurisdiction and were thus void ab initio.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 834625 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 26-07-2025
• Other Referred Cases: Union of India vs. Ashish Agarwal, UOI Vs. Rajeev Bansal, Balbir Singh v. NFAC, Rajesh Gupta (HUF) v. ACIT, Sonia Gandhi vs. NDTV Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SURESH K GUPTA; SERVING
• Keywords: Difference of opinion; Change of opinion; Reassessment proceedings; Unexplained cash credit; Reopening of assessment; Accommodation entries; Competent authority; Reason to believe; Tangible material
• Section: 147; 148; 143(3); 68; 139

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’: NEW DELHI BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.4592/Del/2025 (ASSESSMENT YEAR 2012-13) ITA No.4593/Del/2025 (ASSESSMENT YEAR 2014-15) RMP Holdings Private Limited, 138-C, Block-B, Group-4, Vivek Vihar, Dilshad Garden, Delhi-110095. PAN-AAACR5533N Vs. Income Tax Officer, Ward-20(3), Delhi. (Appellant) (Respondent) Assessee by Shri Suresh K Gupta, CA Department by Shri Rajesh Kumar Dhanesta, Sr. DR Date of Hearing 23/12/2025 Date of Pronouncement 04/02/2026 O R D E R PER MANISH AGARWAL, AM: The captioned appeals are filed by the Assessee against the two separate orders of Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), for Assessment Year 2012-13 dated 16.06.2025 and Assessment Year 2014-15 dated 30.06.2025 arising out of the assessment orders passed u/s 147/143(3) of the Act. 2. Since both the appeals filed by the assessee are having similar issues, therefore, they are taken together and decided by a common order. Printed from counselvise.com 2 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO 3. First we take the assessee’s appeal for Assessment Year 2012-13 in ITA No.4592/Del/2025. 4. Brief facts of the case are that the assessee filed its return of income declaring total income on 13.09.2012 and the assessment order was completed u/s 143(3) vide order dated 03.03.2015 at a total income of Rs 2,02,040/-. Thereafter, reassessment proceedings u/s 147 were initiated by the Assessing Officer on the premise that assessee has taken accommodation entries in the shape of loans from Jain Brothers and, the reassessment order was passed u/s 147 r.w.s 143(3) of the Act dated 27.12.2019 wherein total addition of Rs.1,35,77,494/- was made to the income already assessed u/s 143(3) of the Act and finally total income of the assessee was re-assessed at 1,37,79,530/-. 5. Against the said the order, the assessee preferred the appeal before the Ld. CIT(A) who dismissed the appeal of the assessee. Therefore, the assessee is in appeal before the Tribunal by taking following grounds of appeal: “1. On facts and circumstances of the case, the authorities below have erred in upholding the reassessment proceedings ignoring the fact that impugned assessment is invalid and without I jurisdiction as the said assessment is completed without complying with legal requirements of the provisions of section 147-148/151/153C of the Income Tax Act therefore such assessment is void ab initio and liable to be quashed. 2. On facts and circumstances of the case, the authorities below have erred in upholding the reassessment proceedings ignoring the fact that reassessment proceedings-initiated u/s 147 of the IT Act ignoring the contention of appellant that the proceedings have been initiated by the AO without application of independent mind on the material, if any, provided by the Inv. Wing of the department. Therefore, such reassessment is void ab initio and liable to be quashed. 3. On facts and circumstances of the case, the authorities below have erred in upholding the reassessment proceedings ignoring the fact that sanction u/s 151 Printed from counselvise.com 3 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO of IT Act as provided with the copy of the reason recorded shows mechanical satisfaction by the approving authority. 4. The Ld. CIT(A) has erred both in law and circumstances of the case in upholding the reassessment proceedings us 147 of the IT Act which is not properly initiated and therefore need be quashed as the appellants case is covered by proviso to section 147 of the IT Act and that being the case the AO has not only failed to invoke first proviso but also failed to give a finding as which material facts the appellant failed to disclose fully and truly during original proceedings and in the absence of any such finding, the initiation of reassessment proceedings and the impugned assessment order both are bad in law and also because such proceedings are as a result of change of mind by the successor incumbent on the same set of facts. 5. The Ld. CIT(A) on the facts and circumstances of the case has erred in upholding the validity of impugned assessment order passed u/s 143(3)/147 of the Act on the ground that the AO was not entitled to take cognizance of the material seized from the third party by invoking provisions of sec 147/148 of the Act ignoring the specific provision u/s 153C of the Act dealing with such material. 6. The Ld. CIT(A) has erred both in law and circumstances of the cases in upholding the addition of Rs.1,35,77,494/- u/s 68 of the IT Act holding the unsecured loan as unexplained cash credit ignoring the fact that the assessee has discharged its initial onus u/s 68 of the IT Act explaining nature and source of the credits by filing requisite documents proving identity and creditworthiness of the lenders and also to establish genuineness of the transaction during assessment proceedings. 7. The appellant craves leave to add, delete, modify, amend the above grounds of appeal with the permission of the Hon’ble appellate authority.” 6. During the course of hearing, Ld. Sr. DR requested for adjournment by stating that report of the AO is required. It is observed that on earlier occasion, case was adjournment on the request of ld. SR DR stating that report from the AO is required regarding legal issues raised by the assessee of reopening the assessment. It is further observed that all the details are available in the PB filed by the assessee, therefore, there is no requirement taking from any report from the Assessing Officer, therefore, the adjournment request made by the revenue is rejected and case was heard. Printed from counselvise.com 4 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO 7. Before us, in support to the legal grounds of appeal 1 to 5 taken, ld.AR for the assessee submits that in the instant case, reopening was done by recording the reasons u/s 147 of the Act which are available at page 3 to 10 of the PB wherein in performing seeking the approval Item No.8 is regarding “whether the assessment is proposed to be made for the first time” the answer given is “Yes”. In this regard, ld. AR drew our attention to copy of reasons recorded which is available at page 3 back side of the paper book wherein the AO observed that the “the case was processed u/s 143(1) of the Act and no scrutiny assessment was made”. 7.1 The Ld. AR submits that in the instant case, assessment was already completed u/s 143(3) dated 03.03.2015 however, in the reasons recorded it is observed that no assessment was carried out. It appears that reasons recorded are defective and non-application of mind. The Ld. AR thus submits that the consequent reassessment order passed based on such invalid reasons deserves to be hold bad in law. He placed reliance on the judgment of the Co-ordinate Bench in assessee’s own case for Assessment Year 2011-12 in ITA No.724/Del/2019 dated 31.07.2020 wherein the Co-ordinate Bench under identical circumstances has quashed the assessment order passed holding the reasons for reopening as invalid. He prayed accordingly. 8. On the other hand, Ld. Sr. DR vehemently supported the orders of the lower authorities and submits that the assessee has not objected this defect in the reason recorded before the Assessing Officer and, therefore, the assessee cannot raise this ground now before the Tribunal in view of the provisions of section 292BB of the Act. He therefore, prayed that the order passed deserves to be upheld being based on the valid reasons. Printed from counselvise.com 5 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO 9. Heard both the parties and perused the materials available on record. In the instant case, the proforma of form of the reasons recorded for initiating the proceedings u/s 148 for obtaining the approval are reproduced as under: Printed from counselvise.com 6 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO Printed from counselvise.com 7 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO Printed from counselvise.com 8 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO Printed from counselvise.com 9 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO Printed from counselvise.com 10 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO Printed from counselvise.com 11 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO Printed from counselvise.com 12 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO Printed from counselvise.com 13 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO Printed from counselvise.com 14 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO Printed from counselvise.com 15 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO Printed from counselvise.com 16 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO Printed from counselvise.com 17 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO Printed from counselvise.com 18 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO Printed from counselvise.com 19 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO 10. From the perusal of the above, it is observed that the AO in the reasons recorded observed that the assessment is in the case of the assessee is to be carried out for the first time. However, in the reassessment order under appeal at page No.1, the AO himself observed that the “assessment u/s 143(3) of the Act in this case was completed on 04.03.2015 at total income of Rs. 2,02,040/”. Further while computing the income, the AO has taken the assessed income u/s 143(3) and, thereafter, proceeded to make the addition. It clearly shows that while recording the reasons for reopening the assessment and seeking the approval from the authorized authority, the AO was very much aware that the assessment order has already been completed u/s 143(3) vide order dated 04.03.2015, however, it has not been stated in the reasons Printed from counselvise.com 20 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO and it is wrongly observed that return was processed u/s 143(1) and no scrutiny assessment was made. This clearly shows that in the reasons recorded the AO has not recorded his satisfaction about the failure on the part of the assessee to fully and truly disclosed all the material facts necessary for the completion of assessment. Under identical circumstances in assessee’s own case in Assessment Year 2011-12 in ITA No.7243/Del/2019, the Co-ordinate Bench has held the assessment framed u/s 147 as illegal, invalid and without jurisdiction. The relevant observations of the Co-ordinate Bench are as under: “38. A perusal of the above vis-à-vis the reasons recorded and form of approval shows that although the original assessment was completed u/s 143(3) on 10th March, 2014, the AO, in the form for obtaining approval at clause 8 has categorically mentioned that the assessment is proposed to be made for the first time and in the background of reasons also has mentioned that the case was processed u/s 143(1) of the Act and no scrutiny assessment was made. A perusal of the reasons recorded nowhere shows any allegation by the AO that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for completion of the assessment. Since, in the instant case, the original assessment was completed u/s 143(3) on 10th March, 2014 for the A.Y. 2011-12 41 and the notice u/s 148 was issued on 26th March, 2018, therefore, the first proviso ITA No.7243/Del/2019 of section 147 is applicable to the facts of the present case. The Hon’ble Supreme Court in the case of NDTV Ltd. Vs. DCIT vide Civil Appeal No. 1008 of 2020 dated 3rd April, 2020, has quashed the reassessment proceedings for not mentioning the first proviso neither in the reason recorded nor in the notice issued u/s 148. The Hon’ble Delhi High Court in the case of BPTP Ltd. vs. PCIT, vide Writ Petition No.13803/2018, order dated 28.11.2019 has held that if the AO has failed to perform his statutory duty, he cannot review his decision and reopen on a change of opinion. It has been held that reopening is not an empty formality. There has to be relevant tangible material for the AO to come to the conclusion that there is escapement of income and there must be a live link with such material for the formation of the belief. Merely using the expression ‘failure on the part of the assessee to disclose fully and truly all material facts’ is not enough. The reason must specify as to what is the nature of default or failure on the part of the assessee. The Hon’ble Bombay High Court in the case of Anand Developers, vide Writ Petition No.17/2020, order dated 18th February, 2020, has held that a mere bald observation by the AO that the assessee has not disclosed fully and truly all the material facts is not sufficient. The AO has to give details as to which fact or the material was not disclosed by the assessee leading to its income escaping assessment. Otherwise reopening is not valid. The Hon’ble Delhi High Court in the case of Haryana Printed from counselvise.com 21 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO Acrylic Manufacturing Company vs. CIT, 308 ITR 38, order dated 1st July, 2020, has held as under: “19. Examining the proviso [set out above], we find that no action can be taken under section 147 after the expiry of four years from the end of the relevant assessment year if the following conditions are satisfied: (a) an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year; and (b) unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee: (i) to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148; or (ii) to disclose fully and truly all material facts necessary for his assessment for that assessment year. Condition (a) is admittedly satisfied inasmuch as the original assessment was completed under section 143(3) of the said Act. Condition (b) deals with a special kind of escapement of income chargeable to tax. The escapement must arise out of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148. This is clearly not the case here because the petitioner did file the return. Since there was no failure to make the return, the escapement of income cannot be attributed to such failure. This leaves us with the escapement of income chargeable to tax which arises out of the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year. If it is also found that the petitioner had disclosed fully and truly all material facts necessary for its assessment, then no action under section 147 could have been taken after the four year period indicated above. So, the key question is whether or not the petitioner had made a full and true disclosure of all material facts. 20. In the reasons supplied to the petitioner, there is no whisper, what to speak of any allegation, that the petitioner had failed to disclose fully and truly all material facts necessary for assessment and that because of this failure there has been an escapement of income chargeable to tax. Merely having a reason to believe that income had escaped assessment, is not sufficient to reopen assessments beyond the four year period indicated above. The escapement of income from assessment must also be occasioned by the failure on the part of the assessee to disclose material facts, fully and truly. This is a necessary condition for overcoming the bar set up by the proviso to section 147. If this condition is not satisfied, the bar would operate and no action under section 147 could be taken. We have already mentioned above that the reasons supplied to the petitioner does not contain any such allegation. Consequently, one of the conditions precedent for removing the bar against taking action after the said four year period remains unfulfilled. In our recent decision in Wel Intertrade (P.) Ltd.’s we had agreed with the view taken by the Punjab and Haryana High Court in the case of Duli Chand Singhania that, in the absence of an allegation in the reasons recorded that the escapement of income had Printed from counselvise.com 22 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO occurred by reason of failure on the part of the assessee to disclose fully 43 ITA No.7243/Del/2019 and truly all material facts necessary for his assessment, any action taken by the Assessing Officer under section 147 beyond the four year period would be wholly without jurisdiction. Reiterating our viewpoint, we hold that the notice dated 29-3-2004 under section 148 based on the recorded reasons as supplied to the petitioner as well as the consequent order dated 2-3-2005 are without jurisdiction as no action under section 147 could be taken beyond the four year period in the circumstances narrated above.” 39. The various other decisions relied on by the ld. Counsel also support his case to the proposition that where there is no allegation in the reasons recorded that there is failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment u/s 147 of the Act, the notice issued u/s 148 after a period of four years from the end of the relevant assessment year in a case where original assessment has been framed u/s 143(3) of the Act is illegal and invalid since proceedings are without jurisdiction. 40. Since, in the instant case, the original assessment was framed u/s 143(3) on 10th March, 2014 determining the income at Rs.20,06,714/- as against the returned loss of Rs.20,53,019/- and wherein the issue of unsecured loan creditors was duly considered and accepted on the basis of various supporting documents filed at the time of original assessment and since there is no allegation in the reasons recorded that there is failure on the part of the assessee to disclose fully and truly all material facts necessary for completion of the assessment, therefore, the notice issued u/s 148 after a period of four years from the end of the relevant assessment year in the instant case is illegal and invalid being without jurisdiction. Further, as mentioned earlier, the AO has proceeded to reopen the assessment on the basis of 44 ITA No.7243/Del/2019 wrong appreciation of facts by mentioning that the assessment is proposed to be made for the first time whereas the facts stood otherwise, i.e., the assessment was, in fact, completed u/s 143(3) of the Act, therefore, there is complete non application of mind by the AO as well as by both the superior authorities. Thus, the approval has been given in a mechanical manner without appreciating the facts properly and there is complete non-application of mind by the superior authorities. Therefore, on this score also, the reassessment proceedings have to be quashed and the decision relied on by the ld. DR in the case of Sonia Gandhi (supra) is not at all applicable to the facts of the present case in view of the glaring mistake and omission that has been committed by the AO which was not looked into by the superior authorities. In view of the above, we quash the reassessment proceedings initiated u/s 147/148. The various other legal grounds raised by the ld. Counsel challenging the validity of the reassessment proceedings become academic in nature in view of the above discussion. Since the assessee succeeds on this legal ground, the grounds challenging the addition on merit also become academic in nature and, therefore, are not being adjudicated.” Printed from counselvise.com 23 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO 11. In view of above discussion and since the facts as existed in the year under appeal are identical to the facts of immediately preceding assessment year where the Co-ordinate Bench was of the view that the Assessing Officer has not recorded the reasons based on the true facts and do not record his satisfaction with regard to the failure on the part of the assessee to disclosed fully and truly of all materials facts necessary for the completion of the assessment. Thus, by respectfully following the aforesaid order of coordinate bench in the present year, we hold the reassessment proceedings as invalid and quashed the consequent reassessment order passed for Assessment Year 2012-13. Accordingly, the grounds of appeal Nos. 1 to 5 raised by the assessee are allowed. 12. Since we have already allowed the legal grounds of appeal taken by the assessee, the other grounds of appeal taken on merits of the additions are not adjudicated. 13. In the result appeal of the assessee in ITA No. 4592/Del/2025 for AY 2012- 13 is allowed. ITA No. 4592/Del/2025 for AY 2014-15 14. Coming to assessee’s appeal for Assessment Year 2014-15 in ITA No.4593/Del/2025. 15. Brief facts are that the assessee has filed its return of income on 18.09.2024 declaring nil income. The notice u/s 148 was initially issued on 23.04.2021 and thereafter in terms of order the Hon’ble Supreme Court in the case of Union of India vs. Ashish Agarwal reported in [2022] 138 taxmann.com 64, proceedings u/s 148A were initiated and the order u/s 148A(d) of the Act was passed on 23.07.2022, and Printed from counselvise.com 24 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO notice u/s 148 was issued on 23.07.2022. Subsequently, the replies of the assessee were considered and the assessment order passed u/s 147 r.w.s 143(3) dated 11.05.2023. 16. Heard both the parties and perused the materials available on record. The notice u/s 148 issued to the assessee dt. 23.04.2021, as available at PB page 32 is reproduced as under: Notice under section 148 of the Income-tax Act, 1961 Sir/Madam/M/s. Whereas I have reasons to believe that your income chargeable to Tax for the Assessment Year 2014-15 has escaped Assessment within the meaning of section 147 of the Income Tax Act, 1961. I, therefore, propose to assess/re-assess the income/loss for the said Assessment Year and I hereby require you to deliver to me within 30 days from the service of this notice, a return in the prescribed form for the said Assessment Year. This notice is being issued after obtaining the necessary satisfaction of the PCIT, Delhi-7.” 17. The case of the assessee, the assessment for the year under appeal i.e. for AY 2014-15 is reopened after a period of three years from the end of the relevant assessment years, and as per the amended provisions of section 151, (ii) the approval should be taken from the Principal Chief Commissioner of Income Tax or Principal Director of Income Tax or Chief Commissioner of Income Tax or Director of Income Tax however in the instant case, as could be observed for the above, the approval was taken from the Principal Commissioner of Income Tax, Delhi-7. The provision of section 151 as existed when the approval was granted reads as under: 151. Sanction for issue of notice. Specified authority for the purposes of section 148 and section 148A shall be,— Printed from counselvise.com 25 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO (i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year; (ii) 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. 18. The hon’ble Supreme court in the case of UOI Vs. Rajeev Bansal reported in 469 ITR 46(SC) has held as under: iii. Sanction of the specified authority 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 [Sri krishna (P.) Ltd. v. ITO [1996] 87 Taxman 315/221 ITR 538 (SC)/[1996] 9 SCC 534.] A table representing the prescription under the old and new regime is set out below: Regime Time limits Specified authority Section 151(2) of the old regime Before expiry of four years from the end of the relevant assessment year Joint Commissioner Section 151(1) of the old regime After expiry of four years from the end of the relevant assessment year Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner Section 151(i) of the new regime Three years or less than three years from the end of the relevant assessment year Principal Commissioner or Principal Director or Commissioner or Director Section 151(ii) of the new regime More than three years have elapsed from the end of the relevant assessment year Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General 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 Printed from counselvise.com 26 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO 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 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) Printed from counselvise.com 27 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO 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-year 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. 79. Under Finance Act 2021, the assessing officer was required to obtain prior approval or sanction of the specified authorities at four stages: a. Section 148A(a) to conduct any enquiry, if required, with respect to the information which suggests that the income chargeable to tax has escaped assessment b. Section 148A(b) to provide an opportunity of hearing to the assessee by serving upon them a show cause notice as to why a notice under section 148 should not be issued based on the information that suggests that income chargeable to tax has escaped assessment. It must be noted that this requirement has been deleted by the Finance Act 2022:33 c Section 148A(d) - to pass an order deciding whether or not it is a fit case for issuing a notice under section 148, and d Section 148 - to issue a reassessment notice. 80. In Ashish Agarwal (supra), this Court directed that Section 148 notices which were challenged before various High Courts \"shall be deemed to have been issued under section 148-A of the Income-tax Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of Section 148-A(b).\" Further, this Court dispensed with the requirement of conducting any enquiry with the prior approval of the specified authority under section 148A(a). Under Section 12 148A(b), an assessing officer was required to obtain prior approval from the specified authority before issuing a show cause notice. When this Court deemed the Section 148 notices under the old regine as Section 148A(b) notices under the new regime, it impliedly waived the requirement of obtaining prior approval from the specified authorities under section 151 for Section 148A(b). It is well established that this Court while exercising its jurisdiction under Article 142, is not bound by the procedural requirements of law High Court Bar Association v. State of UP [2024] 160 taxmann.com 32/299 Taxman 21 (SC)/[2024] 6 SCC 267. 81. This Court in Ashish Agarwal (supra) directed the assessing officers to \"pass orders in terms of Section 148-A(d) in respect of each of the assesses concerned.\" Further, it directed the assessing officers to issue a notice under Section 148 of the new regime \"after following the procedure as required under section 148-A.\" Although this Court waived off the requirement of obtaining prior approval under section Printed from counselvise.com 28 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO 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 under section 148A(d) or issuing a notice under section 148. These notices ought to have been issued following the time limits specified under section 151 of the new regime read with TOLA, where applicable.\" 19. Further the Under identical facts and circumstances in the case of assessee itself for Assessment Year 2017-18 in ITA No. 1002/Del/2025 vide order dt. 20.08.2025 has held as under: 9. The ground no 1 & 3 - The Ld. DR submitted that order u/s 148A (d) and the notice u/s 148 of the Act dated 27-07-2022 were passed with the prior approval of the specified authority. We find from the record that notice u/s 148 of the Act was issued by the AO on 25-06-2021 for the A.Y. 2017-18 . The Ld. A.O. in the assessment order mentioned that, the notice u/s 148 of the Act was issued to the assessee on 22-07-2022 with prior approval of the competent authority. As per the provision of section 151 of the Act if the approval is sought for after the expiry of three years the approval shall be obtained from the Pr. Chief Commissioner of Income tax and not from the Pr. Commissioner of Income tax. In the case of Balbir Singh v. NFAC in ITA No. 5755 to 5756 and 5767 & 5768 the Co-ordinate Delhi Bench relied the Hon’ble Jurisdictional High Court decision in the case of Rajesh Gupta (HUF) v. ACIT (supra) quashed the assessment order in which the prior approval was received from the Pr. Commissioner Income Tax. Ld. CIT(A) has rightly decided the issue following the decision of Union of India vs. Rajeev Bansal in favour of the assessee. 20. Thus as per the aforesaid judgement of hon'ble Supreme Court in the case of Rajeev Bansal and provisions of section 151 of the Act, it is clear that the specified authority to grant sanction to issue notice u/s 148 of the Act in the present case would be Pr. CCIT/CCIT as the notice u/s 148 has been issued after 3 years from the end of relevant assessment year. However, in the present case, the AO has issued the notice u/s 148 of the Act after taking sanction from PCIT, Delhi and not from specified Authority i.e. Pr. CCIT/ CCIT and therefore the AO lacked jurisdiction to issue a notice u/s 148 of the Act. Accordingly, the notice u/s 148 of the Act is treated as invalid and consequently the reassessment proceedings u/s 147 of the Act becomes void-ab-initio and the reassessment order is hereby annulled as notice u/s Printed from counselvise.com 29 ITA Nos.4592 & 4593/Del/2025 RMP Holdings Private Ltd. vs. ITO 148 of the Act is invalid in the eyes of law issued without the approval of specified authority. Thus, Grounds of appeal No. 1 to 5 are allowed. 21. Since we have already allowed the legal grounds of appeal taken by the assessee, the other grounds of appeal taken on merits of the additions are not adjudicated. 22. In the result appeal of the assessee in ITA No. 4593/Del/2025 for AY 2014- 15 is allowed. 23. In the final result, both the appeals of the assessee in ITA No. 4592 & 4593/Del/2025 for AY 2012-13 & 2014-15 respectively, are allowed. Order pronounced in the open court on 04.02. 2026. Sd/- Sd/- - (YOGESH KUMAR U.S.) (MANISH AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 04.02.2026 PK/ Sr. Ps Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Printed from counselvise.com "