SHRI SATI HOSIERY PVT LTD,DELHI V. ITO WARD-23(3), DELHI

ITA 1804/DEL/2025

AI Insights

The case involves Shri Sati Hosiery Pvt Ltd, the appellant, contesting the validity of a notice issued under section 148 of the Income-tax Act, 1961, for the assessment year 2014-15. The primary contention was that the notice was not legally approved by the competent authority, as required for reassessments beyond three years from the end of the relevant assessment year. The Tribunal examined the procedural compliance in issuing the notice and found that it was issued with the approval of the PCIT-7, Delhi, instead of the PCCIT/CCIT, which was necessary due to the elapsed time since the relevant assessment year. Consequently, the Tribunal quashed the notice and the subsequent order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 785458 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 24-03-2025
• Other Referred Cases: Ashok Makhija Vs. UOI 466 ITR 283
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUSHIL KUMAR KULHERI
• Assessee Lawyers: DINESH BANSAL
• Keywords: Reassessment proceedings; Reopening of assessment; Competent authority
• Section: 148

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘G’ BENCH, NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER, AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 1804/DEL/2025 [A.Y 2014-15] Shri Sati Hosiery Pvt Ltd Vs. The I.T.O R-20/2, Ramesh Nagar, Ward -23(3) Laxmi Nagar, S.O. New Delhi [East Delhi], Delhi PAN: AGXPC 9276 H (Appellant) (Respondent) Assessee By : Shri Dinesh Bansal, CA Department By : Shri Sushil Kumar Kulheri, Sr. DR Date of Hearing : 01.10.2025 Date of Pronouncement : 27.10.2025 PER NAVEEN CHANDRA, AM :- This appeal by the assessee is directed against the order of the NFAC, Delhi dated 21.01.2025 pertaining to A.Y 2014-15. 2. The assessee has raised as many as 5 grounds of appeal. However, the solitary grievance argued before us is with regard to validity of the approval u/s 151 of the Income-tax Act, 1961 [the Act, for short] as the same was not legally obtained from the competent authority and hence the notice u/s 148 of the Act is invalid. Printed from counselvise.com 2 ITA No. 1804/DEL/2025 [A.Y 2014-15] Shri Sati Hosiery 3. The facts emanating from the assessment order are that the assessee is a private limited company and is engaged in the business of wholesale trading in hosiery goods. we find that the Assessing Officer had issued the original notice u/s 148 of the Act on 16.04.2021 for the A.Y under consideration and passed the consequent order u/s 148A(d) on 22.07.2022. 4. It is the say of the ld. counsel for the assessee that as the reopening was made for A.Y which is beyond three years, the competent authority for approving the issue of notice is the PCCIT. However, the notice was issued with the approval of the PCIT-7, Delhi. Therefore, the notice is invalid and void ab initio. The ld AR further argued that the assessee had requested for an opportunity to cross examine the revenue’s witness whose statement was recorded behind the back of the assessee. However, no opportunity was granted to the assessee to cross examine the revenue’s witness. 5. Per contra, the ld. DR relied upon the orders of the authorities below. The ld DR did not controvert the factual aspect of the instant case. 6. We have heard the rival submissions and have perused the relevant material on record. We find in the instant case that the initial notice Printed from counselvise.com 3 ITA No. 1804/DEL/2025 [A.Y 2014-15] Shri Sati Hosiery u/s 148 for AY 2014-15 was issued on 16.04.2021 under the amended provisions. The admitted fact is that the reassessment proceedings relates to A.Y 2014-15 and on the basis of the order u/s 148A(d) dated 25.07.2022, the notice u/s 148 was issued on 25.07.2022 with the prior approval of PCIT-7, Delhi. We find that the issuance of notice u/s 148 under the amended provisions, have been initiated after lapse of more than 3 years, therefore the provision of section 151(ii) will kick in. The specified authority to grant approval for reopening the assessment, passing order u/s 148A(d) and issuing notice u/s 148, where more than three years have lapsed from the end of the relevant assessment year, would be PCCIT/CCIT. Notice in the present appeal has been issued with the approval of the PCIT-7 Delhi which is in violation of the provisions of section 151(ii) r.w explanation to section 148A. 7. The issue of legality of reopening of assessment under the amended provisions of section 148, 148A ,149 and 151 has been answered by the Hon'ble Jurisdictional High Court of Delhi in the case of Ashok Makhija Vs. UOI 466 ITR 283. The relevant findings read as under: “Held, that as per section 151 of the Income-tax Act, 1961, and considering the fact that the reopening of the case was occurring Printed from counselvise.com 4 ITA No. 1804/DEL/2025 [A.Y 2014-15] Shri Sati Hosiery after a lapse of more than three years, the appropriate authority for issuance of the notice under sections 148 and 148A(b) of the Act should have been either the Principal Chief Commissioner or Principal Director General, or in their absence, the Chief Commissioner or Director General, instead of the Principal Commissioner of Income-tax, who did not fall within the specified authorities outlined in section 151 of the Act. Hence the notice of reassessment dated May 26, 2022 and July 30, 2022 and the order dated July 30, 2022, for the assessment year 2017-18 is quashed. (AY.2017-18)” 8. Considering the facts of the case in light of the aforementioned decision of the Hon'ble High Court of Delhi [supra], we have no hesitation in holding that the order u/s 148A(d) and notice u/s 148 is bad in law and deserves to be quashed as void ab initio. As we have decided the issue of assumption of jurisdiction as being bad in law, therefore, we do not find any reason to dwell into the merits of the case. The ground 2 is allowed. 9. In the result, appeal of assessee in ITA No. 1804/DEL/2025 is allowed. Printed from counselvise.com 5 ITA No. 1804/DEL/2025 [A.Y 2014-15] Shri Sati Hosiery Order pronounced in open court on 27.10.2025. Sd/- Sd/- [ANUBHAV SHARMA] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 27th OCTOBER, 2025. VL/ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) Asst. Registrar, 5. DR ITAT, New Delhi Sl No. PARTICULARS DATES 1. Date of dictation of Tribunal Order 2. Date on which the typed draft order is placed before the Dictating Member 3. Date on which the typed draft order is placed before the other Member [in case of DB] 4. Date on which the approved draft order comes to the Sr. P.S./P.S. 5. Date on which the fair Order is placed before the Dictating Member for sign 6. Date on which the fair order is placed before the other Member for sign [in case of DB] 7. Date on which the Order comes back to the Sr. P.S./P.S for uploading on ITAT website 8. Date of uploading, inf not, reason for not uploading 9. Date on which the file goes to the Bench Clerk 10. Date on which the file goes for Xerox 11. Date on which the file goes for endorsement 12. The date on which the file goes to the Superintendent for checking 13. Date on which the file goes to the Assistant Registrar for signature on the order 14. Date on which the file goes to the dispatch section for dispatch the Tribunal order 15. Date of Dispatch of the Order 16. Date on which the file goes to the Record Room after dispatch the order Printed from counselvise.com "