Case Law Details
Vishesh Developers Pvt. Ltd. Vs ACIT (ITAT Delhi)
The Delhi ITAT adjudicated an appeal filed by the assessee against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, dated 16.10.2025 for Assessment Year 2019-20. The principal issue was the validity of reassessment proceedings initiated under Section 148 of the Income Tax Act, 1961 where the notice was issued beyond three years from the end of the relevant assessment year.
The assessee contended that the Assessing Officer had reopened the assessment by issuing a notice under Section 148 beyond the statutory period of three years. It was submitted that, in such cases, Section 151 mandates prior sanction from the Principal Chief Commissioner of Income Tax (PCCIT) or Chief Commissioner of Income Tax (CCIT). Referring to the approval dated 12.04.2023 granted under Section 151, the assessee pointed out that the Principal Commissioner of Income Tax (PCIT), in Row No. 9 of the approval, had specifically recorded that the proceedings were covered under Section 149(1)(b), i.e., “more than three years but not more than ten years.” According to the assessee, despite acknowledging that the reopening was beyond three years, the PCIT proceeded to grant approval, although Section 151 required sanction from a higher authority. The assessee also argued, in the alternative, that the approval reflected a mechanical exercise without application of mind. In support of this contention, reliance was placed on the judgment of the Bombay High Court in ITO v. Nikhil Chandrakant Dharia, 469 ITR 262 (Bombay), wherein approval under Section 151 granted mechanically without application of mind was held to invalidate the reassessment notice. It was further submitted that the Supreme Court had dismissed the Revenue’s appeal in ITO v. Nikhil Chandrakant Dharia, 469 ITR 315 (SC).
The Department supported the order of the Commissioner (Appeals) and maintained that approval under Section 151 had been granted by the competent authority.
After considering the submissions and examining the records, the Tribunal noted that the notice under Section 148 had been issued on 12.04.2023 for Assessment Year 2019-20, which was visibly beyond three years from the end of the relevant assessment year. The Tribunal examined the approval dated 12.04.2023 and found that the sanction under Section 151 had been accorded by the PCIT. It further observed that the PCIT had expressly recorded in the approval that the proceedings were covered by Section 149(1)(b), acknowledging that the reopening fell within the category of cases where more than three years but not more than ten years had elapsed.
The Tribunal held that, notwithstanding this acknowledgment, the PCIT proceeded to grant approval in contravention of Section 151. It observed that the provisions of Section 151, as applicable at the relevant time, unequivocally required that where more than three years had elapsed from the end of the relevant assessment year, prior sanction for issuance of a notice under Section 148 had to be obtained from the PCCIT, Principal Director General, CCIT or Director General. Since the approval had instead been granted by the PCIT, the sanction was not in accordance with the statutory requirement.
On this basis, the Tribunal concluded that the sanction under Section 151 was invalid. As a consequence, the notice issued under Section 148 and all subsequent reassessment proceedings were held to be without jurisdiction. The Tribunal therefore quashed the notice issued under Section 148 and the assessment framed pursuant thereto as void ab initio.
Accordingly, the appeal filed by the assessee was allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] dated 16.10.2025, for Assessment Year 2019-20.
2. Shri Mani Bhadra Jain, appearing on behalf of the assessee submits that the Assessing Officer (AO) reopened the assessment and issued notice u/s 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) beyond the period of three years. He submits that where the assessment is reopened beyond the period of three years, sanction for issuance of notice u/s.148 of the Act has to be obtained from the Principal Chief Commissioner (PCCIT) or Chief Commissioner of Income Tax (CCIT). Without prejudice, the ld. Counsel made alternate prayer. Referring to the approval u/s 151 of the Act dated 12.04.2023 at pages 32 and 33 of the paper book, the ld. Counsel submits that while granting approval u/s 151 of the Act, in Row No. 9, the Principal Commissioner of Income Tax (PCIT) records that the time limit for the current proceedings is covered, “u/s. 149(1)(b) of the Act, i.e., more than three years but not more than ten years”. Even if it is accepted that notice u/s.148A(b) of the Act is issued within three years and approval is by the Competent Authority under the Act, the manner in which PCIT has sanctioned approval is itself testimony to the fact that the same has been accorded in mechanical manner without application of mind by the PCIT. To buttress his submissions, the ld. Counsel placed reliance on judgment of the Hon’ble Bombay High Court in the case of ITOv. Nikhil Chandrakant Dharia 469 ITR 262 (Bombay) to contend that where approval u/s 151 of the Act has been granted in a mechanical manner without application of mind, the notice issued for reopening is liable to be set aside. He further submits that the Hon’ble Supreme Court of India in appeal by the Revenue ITO v. Nikhil Chandrakant Dharia 469 ITR 315 (SC) dismissed appeal of Revenue.
3. Per contra, Shri Manoj Kumar, representing the Department strongly supported the impugned order and submits that the approval u/s 151 of the Act has been granted by the competent authority.
4. Both sides heard, orders of the lower authorities examined. For reopening of Assessment Year 2019-20, notice u/s 148 of the Act was issued to the assessee on 12.04.2023. The notice issued u/s 148 of the Act is visibly issued beyond the period of three years from the end of relevant assessment year. As is evident from the copy of approval dated 12.04.2023 available at pages 32 and 33 of the paper book, the approval u/s 151 of the Act for reopening the assessment was accorded by the PCIT. In Row No. 9 of the approval, the PCIT records that the time limit for the current proceedings is covered u/s 149(1)(b) of the Act, i.e., more than three years but not more than ten years. Thus, the PCIT is accepting that reopening is after three years and still proceeded to grant approval for issuance of notice in contravention of the provisions of section 151 of the Act. The provisions of section 151 of the Act, as applicable at the relevant point of time, unambiguously provide that where more than three years have elapsed from the end of the relevant assessment year, sanction for issuance of notice has to be obtained from the PCCIT or Principal Director General or Chief Commissioner or Director General. Thus, in light of the material available on record, I am of considered view that the sanction for issuance of notice u/s 148 of the Act is not in accordance with the provisions of section 151 of the Act. Hence, the sanction is invalid. As a sequitur, the notice issued u/s 148 of the Act and the subsequent proceedings arising therefrom are without jurisdiction. Therefore, the notice issued u/s 148 of the Act and the assessment made pursuant thereto are quashed being void ab initio.
5. In the result, appeal of the assessee is allowed.
Order pronounced under Rule 34(4) of Income Tax (Appellate Tribunal) Rules, 1963 on Friday the 19th day of June, 2026.
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