Hisar Leading Bank Co-op Non-Agri Thrift & Credit Society Vs ITO (ITAT Delhi)
CIT Sanction After 3 Years Is Fatal: Wrong Authority’s Approval u/s 151(ii) Kills 148 Notices for AYs 2016-17 & 2017-18-
Ashish Aggarwal Can’t Cure Wrong Sanction: ITAT Delhi Strikes Down Reopening
Delhi ITAT ‘E’ Bench in The Hisar Leading Bank Co-op Non-Agri Thrift & Credit Society vs ITO, Ward-I, Hisar (ITA Nos. 5113 & 5114/Del/2025, AYs 2016-17 & 2017-18, order dated 24-12-2025) quashed the reassessment proceedings in entirety, holding that notices u/s 148 issued on 29-07-2022 were void ab initio for want of sanction from the competent authority u/s 151(ii).
The assessee, a co-operative thrift & credit society, had not originally filed its return. A notice u/s 148 was first issued on 16-04-2021 under the old regime. Pursuant to SC decision in Ashish Aggarwal, fresh proceedings were initiated and notice u/s 148 dated 29-07-2022 was issued after passing order u/s 148A(d). Assessment u/s 147 r.w.s. 144B resulted in a huge addition of ₹6.04 crore u/s 68 on account of alleged cash deposits in bank. CIT(A), NFAC dismissed the appeals and confirmed the additions.
Before ITAT, the assessee raised an additional legal ground contending that the mandatory approval u/s 151(ii) was wrongly obtained from the Principal CIT, Rohtak, whereas, since the notices were issued beyond three years from the end of the relevant AYs, sanction could have been granted only by the Principal Chief Commissioner / Principal Director General / Chief Commissioner / Director General.
ITAT admitted the legal ground (relying on NTPC, SC) and noted that the notice itself records approval of Pr. CIT, which is contrary to section 151 as substituted by Finance Act, 2021. Following binding precedents including Communist Party of India (Marxist) (Del HC), Rajeev Bansal (SC) and coordinate-bench decisions (Sampark Management Consultancy LLP and ITA No.1100/Del/2025), Tribunal held that approval by an incompetent authority is a jurisdictional defect which cannot be cured, even under the umbrella of Ashish Aggarwal or TOLA.
Accordingly, ITAT quashed the notices u/s 148 dated 29-07-2022 and the consequential assessment orders for both AYs, rendering all other grounds academic and left open.
For notices issued after three years, sanction u/s 151(ii) must come from PCCIT/PDG level. PCIT approval is fatal, and Ashish Aggarwal does not legitimise a jurisdictionally defective sanction.
FULL TEXT OF THE ORDER OF ITAT DELHI
By this common order, we propose to dispose of ITA Nos. 5113.Del.2025, A.Y. 2016-17 & 5114.Del.2025, A.Y. 2017-18 as the parties are the same and issues are also same. Both these appeals are directed against the orders of even date 30.06.2025 passed by the Ld. CIT(A)/NFAC, New Delhi. The ITA No. 5113. Del.2025 for A.Y. 2016-17 is taken as the lead case.
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