YASHOVARDHAN SANJAY MALPANI,SANGAMNER V. ITD, WARD-1, AHMEDNAGAR, AHMEDNAGAR

ITA 2280/PUN/2025

AI Insights

The case involves Yashovardhan Sanjay Malpani, who appealed against the order of the CIT(A) / NFAC, Delhi, which confirmed the addition of Rs.48 lakhs to his income for the assessment year 2018-19. The addition was made under section 69A read with section 115BBE of the Income Tax Act, 1961, concerning unexplained cash investment in immovable property. The primary legal contention was the validity of the re-assessment proceedings initiated by the Income Tax Officer (ITO), which the assessee argued were invalid due to improper approval for reopening the assessment. The Tribunal, referencing decisions from the Mumbai Bench and the Bombay High Court, agreed with the assessee, leading to the quashing of the re-assessment.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 841211 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2018-2019
• Appeal Filed On: 01-10-2025
• Other Referred Cases: Davos International Fund vs. ACIT, Vodafone Idea Limited vs. DCIT, Hareshkumar Dungarmal Jain vs. DCIT, DCIT, Circle-1, Jalgaon vs. Taradevi Ratanlal Bafna
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAURAV K SINGH
• Assessee Lawyers: NIKHIL S PATHAK
• Keywords: Set aside; Competent authority
• Section: 147; 148

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND Ms. ASTHA CHANDRA, JUDICIAL MEMBER ITA No.2280/PUN/2025 Assessment year : 2018-19 Yashovardhan Sanjay Malpani Malpani House, New Nagar Road, Sangamner – 422605 Vs. ITO, Ward-1, Ahmednagar PAN : BXUPM2802A (Appellant) (Respondent) Assessee by : Shri Nikhil S Pathak Department by : Shri Gaurav K Singh, JCIT Date of hearing : 23-02-2026 Date of pronouncement : 24-02-2026 O R D E R PER ASTHA CHANDRA, JM: This appeal filed by the assessee is directed against the order dated 21.08.2025 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2018-19. 2. Although a number of grounds have been raised by the assessee, however, these all relate to the validity of the re-assessment as well as addition of Rs.48 lakhs made by the Assessing Officer u/s 69A r.w.s. 115BBE of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) and confirmed by the Ld. CIT(A) / NFAC. 3. Facts of the case, in brief, are that the assessee is an individual and filed his return of income on 16.10.2018 declaring total income of Rs.49,92,600/-. In this case information was obtained by the Assessing Officer that the income chargeable Printed from counselvise.com 2 ITA No.2280/PUN/2025 to tax has escaped assessment for the relevant assessment year. The Assessing Officer, therefore, reopened the assessment invoking the provisions of section 147 of the Act and issued notice u/s 148 of the Act on 29.04.2022. The assessee in response to the same filed his return of income on 17.06.2022 declaring total income of Rs.49,92,600/-. The Assessing Officer during the course of assessment proceedings confronted the assessee regarding the purchase of immovable property. Rejecting the various explanations given by the assessee, the Assessing Officer made addition of Rs.48 lakhs u/s 69A r.w.s. 115BBE of the Act on account of unexplained cash investment in immovable property. 4. Before the Ld. CIT(A) / NFAC, the assessee apart from challenging the addition on merit, challenged the validity of re-assessment proceedings but without any success. 5. Aggrieved with such order of the Ld. CIT(A) / NFAC the assessee is in appeal before the Tribunal. 6. The Ld. Counsel for the assessee at the outset drew the attention of the Bench to the notice issued u/s 148 of the Act which is dated 29.04.2022 and the assessment year involved is assessment year 2018-19. Thus, the notice u/s 148 of the Act being issued beyond a period of 4 years, the approval of the Principal CCIT should have been taken whereas the Assessing Officer in the instant case has taken the approval of PCIT. Printed from counselvise.com 3 ITA No.2280/PUN/2025 7. Referring to the decision of the Mumbai Bench of the Tribunal in the case of Davos International Fund vs. ACIT vide ITA No.1190/Mum/2024, order dated 13.01.2025 and the decision of the Hon’ble Bombay High Court in the case of Vodafone Idea Limited vs. DCIT in WP No.2768 of 2022, order dated 06.02.2024, the Ld. Counsel for the assessee submitted that the notice issued by the Assessing Officer u/s 148 of the Act without obtaining the approval from the correct appropriate authority is invalid and the assessment completed u/s 147 r.w.s. 151 of the Act is liable to be quashed. He accordingly submitted that the re-assessment proceedings being not in accordance with law should be quashed. He also relied on the following decisions of the Co-ordinate Bench of the Tribunal: 1) Hareshkumar Dungarmal Jain vs. DCIT vide ITA No.1933/PUN/2024 order dated 24.02.2025 for assessment year 2018-19. 2) DCIT, Circle-1, Jalgaon vs. Taradevi Ratanlal Bafna vide ITA No.499/PUN/2025 order dated 24.10.2025 for assessment year 2018-19. 8. So far as the merit of the case is concerned, the Ld. Counsel for the assessee submitted that various details were furnished before the Assessing Officer as well as the Ld. CIT(A) / NFAC to substantiate the investment in immovable property. However, these have not been properly appreciated by the lower authorities. 9. The Ld. DR on the other hand submitted that the Assessing Officer has taken the approval correctly. Therefore, reopening of the assessment is in order. So far as the merit of the case is concerned, he heavily relied on the order of the Ld. CIT(A) / NFAC. Printed from counselvise.com 4 ITA No.2280/PUN/2025 10. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the order dated 29.04.2022 passed in the instant case under clause (d) of section 148A of the Income Tax Act, 1961, copy of which is placed at page 15 of the paper book reads as under: Printed from counselvise.com 5 ITA No.2280/PUN/2025 Printed from counselvise.com 6 ITA No.2280/PUN/2025 11. A perusal of the above shows that the order under clause (d) of section 148A of the Act was passed on 29.04.2022 after obtaining the approval of the PCIT, Pune. Since the assessment year involved is assessment year 2018-19 and the notice u/s 148 was issued on 29.04.2022 i.e. after a period of 3 years from the end of the relevant assessment year, it has to be seen as to who is the competent authority from whom the approval has to be obtained. Printed from counselvise.com 7 ITA No.2280/PUN/2025 12. We find the provisions of section 151 of the Act read as under: “151. Specified authority for the purposes of section 148 and section 148A shall be,— (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 Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year: Provided……” 13. A perusal of the above provisions clearly show that w.e.f. 01.04.2021 the Principal Chief Commissioner or the Principal Director General is the competent authority for giving sanction for reopening if more than 3 years have elapsed from the end of the relevant assessment year. 14. We find an identical issue had come up before the Co-ordinate Bench of the Tribunal in the case of Hareshkumar Dungarmal Jain vs. DCIT & Anr vide ITA Nos.1933/PUN/2024 and 1934/PUN/2024 order dated 24.02.2025 for assessment year 2018-19. We find the Tribunal after considering various decisions including the decision of the Hon’ble jurisdictional High Court has observed as under: “11. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find clauses 1, 2, 6 and 7 of the order dated 13.04.2022 passed under clause (d) of section 148A of the Income Tax Act, 1961 read as under: “GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1, KOLHAPUR. Printed from counselvise.com 8 ITA No.2280/PUN/2025 To HARESHKUMAR DUNGARMAL JAIN 39 SHIVAJI PARK, E WARD NEAR CBS KOLHAPUR 416003, Maharashtra India PAN: AAHPH2287D AY 2018-19 Dated 13/04/2022 DIN & Notice No: TBA/AST/F/148A/2022- 23/1042737900(1) Name of the assessee HARESHKUMAR DUNGARMAL JAIN Address of the assessee 39 SHIVAJI PARK, E WARD NEAR CBS KOLHAPUR 416003, Maharashtra India Resident Not Ordinarily Resident Non-Resident Date of order 13/04/2022 Specified authority approval Name PCIT, Pune-1 Reference No. 100000029101926 Date Order under clause (d) of section 148A of the Income-tax Act.1961 1. Brief Details of the Assessee: The assessee Harishkumar Dungarmal Jain has filed return of income for the A Y 2018-19 in ITR-3 on 26/09/2018 declaring total income at Rs.30,63,633/-. The assessee is a beneficiary of LTC gain/loss or STC Gain/loss and has received Rs.23,39,899/- during the A.Y 2018-19. 2. Brief details of information collected/received by the AO: In this case the information is received through Insight portal, in accordance with the risk management strategy formulated by the CBDT (Board). The Information of transaction done by the assessee during AY 2018-19 is as under- The assessee is a beneficiary of LTC gain/loss or STC Gain/loss and has received Rs.28,39,899/- during the A.Y 2018-19. 3……….. 3.1……... 04……… 05…….. 6. It is evident that income of Rs.23,39,899/- or more has escaped assessment for year under consideration within the meaning of sec. 147 read with provision & explanation to the said section and it is evident that this is a fit case made out for issue of notice u/s 148 r.w.s 151 of the IT Act, 1961 for the AY 2018-19 to assess income in the case. Printed from counselvise.com 9 ITA No.2280/PUN/2025 7. As this case is within 3 years, from the end of the assessment under consideration the approval is sought from specified authority u/s 151 i.e. Pr.CIT-1, Pune. Therefore, an approval of the PCIT, Pune-1 to re-open the assessment u/s 147 of the Act, is sought u/s 148A(d) and subsequent issue of notice u/s 148 for AY 2018-19 in the present case, if approved. JAGDISH SHANKAR JAGTAP CIRCLE 1, KOLHAPUR” 12. A perusal of the above shows that the order under clause (d) of section 148A of the Act was passed on 13.04.2022 after obtaining the approval of the PCIT, Pune. Since the assessment year involved is assessment year 2018-19 and the notice u/s 148 was issued on 13.04.2022 it has to be seen as to who is the competent authority from whom the approval has to be obtained. 13. We find the provisions of section 151 of the Act read as under: “151. Specified authority for the purposes of section 148 and section 148A shall be,— (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 Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year: Provided……” 14. A perusal of the above provisions clearly shows that w.e.f. 01.04.2021 the Principal Chief Commissioner or the Principal Director General is the competent authority for giving sanction if more than 3 years have elapsed from the end of the relevant assessment year. 15. We find an identical issue had come up before the Mumbai Bench of the Tribunal in the case of Davos International Fund vs. ACIT (supra). We find the Tribunal after considering various decisions including the decision of the Hon’ble jurisdictional High Court has observed as under: “7. We heard the parties and perused the material on record. In assessee's case the 148A notice for AY 2017-18 was issued on 12.03.2022 and the order disposing the objections of the assessee was passed on 04.04.2022 under section 148A(d) of the Act. The AO issued notice under section 148 dated 04.04.2022. On perusal of the order under section 148A(d) of the Act and 148 (page 42 to 46 and 47 of PB) we notice that the impugned notices are issued after obtaining the prior approval of CIT (IT), Mumbai-2. The case of the revenue is that the notice dated 04.04.2022 is issued within three years since as per the 5th proviso to section 149, the AO has got Printed from counselvise.com 10 ITA No.2280/PUN/2025 additional 9 days for issue of notice under section 148 i.e. upto 09.04.2022. since the extended time of 9 days i.e. from 22.03.2022 to 31.03.2022 was given to the assessee. Therefore, it is argued by the revenue that notice issued on 04.04.2022 is within period of three years and the approval has been correctly obtained by the authority as specified in section 151(i) of the Act. The assessee is contending that the 5th proviso to section 149 under which the revenue is taking cover is inserted w.e.f. 01.04.2023 and therefore not applicable to assessee's case. In this regard, we notice that the Hon'ble Bombay High Court iIn the case of Vodafone Idea Ltd (supra) has held that – “1. Petitioner is impugning a notice dated 19th March 2022 issued under Section 148A(b) of the Income Tax Act, 1961 (\"the Act\"), the order passed under Section 148A(d) of the Act and the notice both dated 7th April 2022 issued under Section 148 of the Act. One of the grounds raised is that the sanction to pass the order under Section 148A(d) of the Act and issuance of notice under Section 148 of the Act is invalid inasmuch as the sanction has been admittedly issued by the Principal Commissioner of Income Tax (\"PCIT\") and not by the Principal Chief Commissioner of Income Tax (PCCIT\"). 2. Petitioner's request for a copy of the sanction has also been denied. Even in the affidavit in reply, the Department is refusing to give the sanction which makes us wonder what is the national secret involved in that, that Assessee is being refused what he is rightfully entitled to receive from the Department. In the affidavit in reply, the stand taken by the Revenue is it will be made available during the re- assessment proceeding. 3. The impugned order and the impugned notice both dated 7th April 2022 state that the Authority that has accorded the sanction is the PCIT, Mumbai 5. The matter pertains to Assessment Year (\"AY\") 2018-19 and since the impugned order as well as the notice are issued on 7th April 2022, both have been issued beyond a period of three years. Therefore, the sanctioning authority has to be the PCCIT as provided under Section 151 (ii) of the Act. The proviso to Section 151 has been inserted only with effect from 1\" April 2023 and, therefore, shall not be applicable to the matter at hand. 4. In this circumstances, as held by this Court in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors., the sanction is invalid and consequently, the impugned order and impugned notice both dated 7th April 2022 under section 148A(d) and 148 of the Act are hereby quashed and set aside.” 8. Similar view is held by the jurisdictional High Court also in other cases as listed herein above. In the decision of the Vodafone Idea (supra), the Hon'ble High Court has given a specific finding that the proviso to section 151 extending the time limit as per the third, fourth or fifth proviso to section 149 is not applicable for AY 2018-19 as the same is inserted only Printed from counselvise.com 11 ITA No.2280/PUN/2025 w.e.f. 01.04.2023. When we apply the said ratio to assessee's case, in our considered view, the claim of the revenue that the period of 3 years expires only on 09.04.2022 is not correct and that revenue cannot take shelter under the proviso to section 151 which came into effect only from 01.04.2023. Accordingly the notice issued on 04.04.2022 by the AO is issuedbeyond three years and therefore the approval should have been obtained by the authorities as specified under section 151(ii) Principle Chief Commission. As already stated the approval in assessee's case is obtained from CIT(IT) and therefore we are inclined to agree with the contention of the assessee that the notice under section 148 has been issued without obtaining the approval from the correct authority as specified under section 151. Respectfully following the above decisions of the Hon'ble Bombay High Court we hold that the notice issued by the AO under section 148 without obtaining approval from correct appropriate authority is invalid and the assessment done under section 147 r.w.s. 144(13) of the Act is liable to be quashed. 9. Since we have adjudicated the legal contentions raised through additional ground in favour of the assessee, the grounds raised on merits have become academic and not warranting any specific adjudication.” 16. Since in the instant case the notice u/s 148 of the Act has been issued on 13.04.2022 which is beyond the period of three years from the end of the relevant assessment year, therefore, the competent authority who should have given sanction for reopening proceedings is the Principal Chief Commissioner / Principal Director General. However, in the instant case, the same has been approved by the PCIT-1, Pune. Therefore, such approval being not in accordance with law, is invalid and consequently, the entire re-assessment proceedings are vitiated. We, therefore, quash the re-assessment proceedings. 17. Since the assessee succeeds on this preliminary issue, the other grounds challenging the validity of re-assessment proceedings and the grounds challenging the addition on merit are not being adjudicated being academic in nature.” 15. Since in the instant case also the approval has been granted by the PCIT and not the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, therefore, such approval being not in accordance with law, the re-assessment proceedings are vitiated and are liable to be quashed. We, therefore, quash the re-assessment proceedings. Since the assessee succeeds on this legal ground, therefore, the grounds challenging the addition on Printed from counselvise.com 12 ITA No.2280/PUN/2025 merit are not being adjudicated being academic in nature. The grounds raised by the assessee are accordingly allowed. 16. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 24th February, 2026. Sd/- Sd/- (R. K. PANDA) (ASTHA CHANDRA) VICE PRESIDENT JUDICIAL MEMBER पुणे Pune; दिन ांक Dated : 24th February, 2026 GCVSR आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. 4. The concerned Pr.CIT, Pune DR, ITAT, ‘B' Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune Printed from counselvise.com 13 ITA No.2280/PUN/2025 S.No. Details Date Initials Designation 1 Draft dictated on 23.02.2026 Sr. PS/PS 2 Draft placed before author 23.02.2026 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Office Superintendent 10 Date on which file goes to the A.R. 11 Date of Dispatch of order Printed from counselvise.com "