Vimalkumar Pukraj Jain Vs ITO (ITAT Mumbai)
Approval from the Wrong Authority: Reassessment Falls at the Threshold
The controversy
Approval for reopening an assessment is a statutory safeguard. Obtaining approval from an income-tax authority does not fulfil that requirement unless the authority is competent under the applicable provisions of section 151.
In this case, the Assessing Officer initiated reassessment proceedings more than three years after the end of the relevant assessment year, but obtained approval from the Principal Commissioner of Income Tax instead of the prescribed higher authority. The Pune Tribunal held that the Assessing Officer had failed to assume valid jurisdiction and quashed the consequential reassessment proceedings.
Background of the proceedings
The assessee, an individual, challenged the order of the National Faceless Appeal Centre dated 5 February 2026, arising from a reassessment order dated 10 May 2023, passed under section 147 read with sections 144 and 144B.
The proceedings concerned assessment year 2017-18. The alleged escapement of income was ₹6,27,365.
The order under section 148A(d) and the notice under section 148 were issued on 26 July 2022, with the prior approval of the Principal Commissioner of Income Tax, Nashik.
Although the assessee raised several grounds, the Tribunal first examined the jurisdictional objection concerning the validity of approval under section 151.
The assessee’s objection
The assessee submitted that more than three years had elapsed from the end of assessment year 2017-18 when the reassessment proceedings were initiated.
Consequently, approval ought to have been obtained from the Principal Chief Commissioner of Income Tax, as required by the applicable statutory framework. Approval from the Principal Commissioner did not satisfy that requirement.
The objection went to the foundation of the proceedings: without valid approval from the specified authority, the Assessing Officer could not lawfully assume jurisdiction to reassess the income.
The Departmental Representative supported the appellate order.
Why the approving authority mattered
The Tribunal examined the distinction drawn by section 151, as applicable to the proceedings.
Where three years or less had elapsed from the end of the relevant assessment year, the specified authority included the Principal Commissioner, Principal Director, Commissioner or Director.
Where more than three years had elapsed, the statute prescribed the Principal Chief Commissioner or Principal Director General, or, where there was no such authority, the Chief Commissioner or Director General.
The statutory distinction therefore depended upon the elapsed period, rather than the Assessing Officer’s choice of approving authority.
In the present case, the relevant assessment year ended on 31 March 2018, while the impugned proceedings were initiated on 26 July 2022. Approval from the Principal Commissioner consequently did not meet the applicable requirement.
Earlier decisions supporting the objection
The Tribunal relied upon Siddharth Raikumar Nahar v. DCIT, ITA No. 2062/PUN/2025, dated 29 October 2025, which had addressed the same issue for assessment year 2017-18.
In that case also, proceedings were initiated beyond three years with approval from a Principal Commissioner. The Pune Bench held that the defective approval rendered the proceedings without jurisdiction.
The reasoning reproduced in the present order drew support from several decisions, including Agnello Oswin Dias v. ACIT [2024] 161 taxmann.com 16 (Bombay) and Holiday Developers (P.) Ltd. v. ITO [2024] 159 taxmann.com 178 (Bombay).
Those Bombay High Court decisions followed Siemens Financial Services (P.) Ltd. v. Deputy CIT [2023] 457 ITR 647 (Bombay) in holding that approval from the wrong statutory authority invalidated the reopening.
The reproduced precedent also referred to Core Logistic Company v. ACIT, W.P. No. 18168 of 2023, dated 5 June 2025, where the Madras High Court treated the absence of approval under the applicable clause of section 151 as a jurisdictional defect.
The Tribunal’s conclusion
Applying the precedent, the Tribunal held that approval had been obtained from the Principal Commissioner, instead of the authority mandated for proceedings initiated beyond three years.
The Assessing Officer had therefore failed to assume proper jurisdiction. The Tribunal quashed the consequential reassessment proceedings and set aside the impugned order.
Since the assessee succeeded on this legal issue, the remaining grounds were left undecided as academic. The appeal was allowed, rather than merely restored for reconsideration.
Author’s comments
This decision reinforces the importance of examining the approval record before debating the addition on merits. The notice date, relevant assessment year, approving authority and statutory provision applicable on that date can determine whether the reassessment survives at all.
The requirement is not satisfied merely because a senior departmental officer has approved the action. The approval must come from the authority designated by law.
Care is nevertheless necessary when applying this ruling to other cases. The provisions governing reassessment have undergone amendments, and the decision concerns notices issued in July 2022. Its reasoning should be applied after checking the law governing the particular notice.
The order records alleged escapement of only ₹6,27,365, but decides the appeal on defective sanction. It should therefore not be presented as a ruling on the separate monetary conditions under section 149.
When the statutory approval is defective, the reassessment cannot survive merely on the strength of the proposed addition.
Cases Discussed
- Core Logistic Company Vs ACIT, W.P. No. 18168 of 2023, order dated 05.06.2025 (Madras High Court) — Relied upon in the reproduced precedent; held that where notice was issued beyond three years without approval under section 151(ii), initiation of reassessment proceedings was without jurisdiction.
- Siddharth Raikumar Nahar Vs DCIT, ITA No. 2062/PUN/2025, order dated 29.10.2025 (ITAT Pune) — Relied upon; reassessment for AY 2017-18 initiated beyond three years with approval of PCIT instead of PCCIT was held null and void and without jurisdiction.
- Hareshkumar Dungarmal Jain Vs DCIT, ITA No. 1933/PUN/2024 (ITAT Pune) — Relied upon in the reproduced precedent; notice under section 148 was quashed for want of approval from the competent authority under section 151.
- Agnello Oswin Dias Vs ACIT, [2024] 161 taxmann.com 16 (Bombay High Court) — Relied upon; sanction by PCIT for proceedings beyond three years was invalid as PCCIT was the specified authority under section 151(ii).
- Holiday Developers (P.) Ltd. Vs ITO, [2024] 159 taxmann.com 178 (Bombay High Court) — Relied upon; order under section 148A(d) and notice under section 148 were quashed where approval was granted by PCIT instead of PCCIT.
- Sanchit Kantilal Ganore Vs ITO (ITAT Pune) — Considered in the reproduced precedent; the Tribunal applied the jurisdictional High Court authorities concerning approval by the competent authority under section 151.
- Siemens Financial Services (P.) Ltd. Vs Deputy CIT, [2023] 154 taxmann.com 159 / 457 ITR 647 (Bombay High Court) — Followed; sanction from the wrong specified authority rendered the reassessment notice invalid.
FULL TEXT OF THE ORDER OF ITAT PUNE
1. The captioned appeal at the instance of assessee pertaining to A.Y. 2017-18 is directed against the order dated 05.02.2026 of ld.NFAC, Delhi emanating out of Assessment Order dated 10.05.2023 passed u/s.147 r.w.s.144 r.w.s.144B of the Income Tax Act, 1961 (in short ‘the Act’).
2. Though the assessee has raised various grounds of appeal, I will first deal with the legal issue challenging the validity of reassessment proceedings on the ground that the same has been initiated without taking valid approval as mandated u/s.151 of the Act.
3. At the outset, ld. Counsel for the assessee submitted that for the impugned A.Y. 2017-18 notices u/s.148A(d) and u/s.148 of the Act have been issued on 26.07.2022, i.e. after three years from the end of the assessment year and rather than taking approval from the Principal Chief Commissioner of Income Tax as provided u/s.151 of the Act, the notices have been issued with the approval of Principal Commissioner of Income Tax, Nashik who do not have the authority to give such approval. Therefore, in the absence of proper approval as required u/s.151 of the Act, the Assessing Officer failed to assume proper jurisdiction to initiate the reassessment proceedings.
4. On the other hand, ld. Departmental Representative supported the order of ld.CIT(A).
5. I have heard the rival submissions and perused the records placed before me. I observe that the assessee is an individual and notice u/s.148A(d) has been issued on 26.07.2022 for the alleged escapement of income at Rs.6,27,365/-. The said notice has been issued with the prior approval of the Principal Commissioner of Income Tax, Nashik. I note that the notice has been issued after more than three years from the end of the assessment year. It has been consistently held that as per section 151 of the Act, for issuing notice u/s.148 after three years from the end of A.Y. 2017-18 the Assessing Officer was required to take approval from the Principal Chief Commissioner of Income Tax. I find that this very issue has been dealt by the Coordinate Bench in the case of Siddharth Raikumar Nahar Vs. DCIT – ITA No.2062/PUN/2025 order dated 29.10.2025 quashing the reassessment proceedings as null and void and without jurisdiction. Relevant finding of this Tribunal reads as under :
“5. We have heard rival contentions and perused the record placed before us. We note that the assessee is an individual and for carrying out the reassessment proceedings u/s.147 of the Act for A.Y. 2017-18 notice u/s.148A(d) and 148 of the Act have been issued to the assessee on 13.07.2022 and 15.07.2022 respectively. For issuing these notices, ld. Assessing Officer has taken the approval from ld.PCIT-3, Pune. Before us, ld. Counsel for the assessee has referred to provisions of section 151 of the Act and has submitted that as per section 151 of the Act specified authority for the purpose of section 148 and 148A of the Act is Principal Commissioner or Principal Director or Commissioner or Director if three years or less than three years have elapsed from the end of relevant assessment year and for cases where the notice have been issued after more than three years, approval has to be taken from Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. Since in the instant case reopening has been carried out after three years but the approval has been taken from Principal Commissioner and not from Principal Chief Commissioner, therefore, the approval is invalid and renders the reopening proceeding as illegal and bad in law.
6. We further notice that similar issue came for adjudication before this Tribunal in the case of Sanchit Kantilal Ganore Vs. ITO (Supra) and this Tribunal after placing reliance on plethora of judgments including that of judgment passed by Hon’ble Jurisdictional High Court in the case of Agnello Oswin Dias Vs. ACIT (2024) 161 taxmann.com 16 (Bombay) has decided as follows :
“4.2 Assessee has taken various legal grounds. Ld.AR invited our attention to notice u/s.148 of the Act, dated 29.07.2022 which is at page no.10 to 11 of the paper book. It is observed that the said notice was approved by ld.Principal Commissioner of Income Tax-1, Nashik. It is also observed that the said notice does not have any DIN NUMBER. It is also observed that order u/s.148A(d) dated 29.07.2022 was approved by ld.Principal Commissioner of Income Tax-1, Nashik.
4.3 Section 151 of the I.T.Act is reproduced here as under :
[Sanction for issue of notice.
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 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.]
5. In this case, it is an admitted fact that more than three years have lapsed from the end of the Assessment Year. Therefore, as per Section 151 of the Act, the Competent Authority to approve the notice u/s.148 and order u/s.148A(d) of the Act, is the ld.Principal Chief Commissioner of Income or ld.Chief Commissioner of Income Tax. However, in this case, notice has been approved by ld.Principal Commissioner of Income Tax.
5.1 The Hon’ble Jurisdictional High Court in the decision of Holiday Developers (P.) Ltd, Vs. ITO [2024] 159 taxmann.com 178 (Bombay) dated 29.01.2024 has held as under :
Quote “1. Petitioner is impugning a order under section 148A(d) and the notice, both dated 7th April 2022 passed under section 148 of the Income Tax Act, 1961 (“Act”). Of-course Petitioner has also impugned the notice dated 17th March 2022 issued under section 148A(b) of the Act. Various grounds have been raised but one of the primary grounds for challenging the notice under section 148A(d) and the notice under section 148 of the Act both dated 7th April 2022 is that order as well as the notice both mention the authority that has granted approval, is the Principal Commissioner of Income Tax (“PCIT”), Mumbai 5 and the approval has been granted on 7th April 2022.
2. Mr. Gandhi is correct in saying that the Assessment Year (“AY”) is 2018-19 and, therefore, since more than three years have expired from the end of the assessment year, Sanctioning Authority under section 151(ii) of the Act should be the Principal Chief Commissioner of Income Tax (“PCCIT”) and not the PCIT. Mr. Gandhi says, as held in Siemens Financial Services (P.) Ltd. v. Dy. CIT [2023] 154 taxmann.com 159/457 ITR 647 (Bom.),the sanction is invalid and consequently, the order and the consequent notice under section 148A(d) and section 148, respectively, of the Act should be quashed and set aside.
3. In view of these facts and circumstances, we do not see any reason to just grant Rule and keep the matter pending.
4. As held in Siemens (Supra), the order passed under section 148A(d) and notice issued under section 148 of the Act both are quashed and set aside.” Unquote.
5.2 The Hon’ble Jurisdictional High Court in the case of Agnello Oswin Dias Vs. ACIT [2024] 161 taxmann.com 16 (Bombay) has held as under :
“4. The impugned order and the impugned notice both dated 22nd April 2022 state that the Authority that has accorded the sanction is the PCIT, Mumbai-5. The matter pertains to Assessment Year (“AY”) 2018-2019 and since the impugned order as well as the notice are issued on 22nd April 2022, both have been issued beyond a period of three years. Therefore, the sanctioning authority has to be the PCCIT as provided under Section151(ii) of the Act. The proviso to Section 151 of the Act has been inserted only with effect from 1st April2023 and, therefore, shall not be applicable to the matter at hand.
5. In the circumstances, as held by this Court in Siemens Financial Services (P.) Ltd. v. Dy. CIT [2023] 154taxmann.com 159/457 ITR 647 (Bom.), the sanction is invalid and consequently, the impugned order and impugned notice both dated 22nd April 2022 under sections 148A(d) and 148 of the Act are hereby quashed and set aside.”
6. ITAT Pune in the case of Hareshkumar Dungarmal Jain vs. DCIT in ITA No.1933/PUN/2024, quashed the Notice u/s.148 of the Act, dated 13.04.2022 for A.Y.2018-19.
7. The Hon’ble Madras High Court in the case of Core Logistic Company vs. ACIT, Writ Petition No.18168 of 2023 order dated 05.06.2025 has held as under :
Quote. “9. A perusal of Section 151(i) would show that, the specified authority for the purpose of issuing notice under Section 148 within a period of three years from the end of the relevant assessment year is, the Principal Commissioner or Principal Director or Commissioner or Director. Further, in terms of provision of Section149, three year time period is fixed for issuance of 148 notice, in the event of the amount is below 50 lakhs. In the present case, the amount involved is Rs.3,65,09,748/-, which is more than 50 lakhs. 148 notice was issued on 25.07.2022, which is beyond the period of three years. So admittedly, the approval has to be obtained from the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General as defined under Section 151(ii). But, in the present case, the approval was obtained from the Principal Commissioner in terms of Section 151(i) and no approval was obtained before issuance of 148 notice in terms of provision of Section 151(ii), which is mandatory. Therefore, the notice under Section 148 was issued in the present case in violation of provision of Section 151(ii) of the Income Tax Act. In view thereof, the initiation of proceedings itself is without any jurisdiction. Hence, the same is liable to be quashed.” Unquote
7.1 Thus, in this case notice u/s.148 dated 29.07.2022 was approved by Principal Commissioner of Income Tax and the order u/s.148A(d) was approved by Principal Commissioner of Income Tax-1, Nashik for A.Y.2017-18, which is after the lapse of three years from the end of Assessment Year. Therefore, as per section 151, the Authority to approve is Principal Chief Commissioner of Income Tax/Chief Commissioner of Income Tax. Thus, Section 151 has been violated in this case. Therefore, respectfully following the Hon’ble High Courts(supra) and Hon’ble ITAT, we hold that Notice u/s.148 is bad in law. Accordingly, consequential assessment order is void ab-initio.
7. After carefully going through the above decision of this Tribunal and the ratio laid down by Hon’ble Jurisdictional High Court Agnello Oswin Dias Vs. ACIT (supra), we find that the same is squarely applicable on the legal issue raised in the instant appeal and find that ld. AO for issuing notice u/s.148 of the Act beyond three years for carrying out reassessment proceedings for A.Y. 2017-18 has not taken proper approval as mandated u/s.151 of the Act from the authority approved therein and rather than taking the approval from Principal Chief Commissioner or Chief Commissioner, has taken the approval from Principal Commissioner. Since the approval taken u/s.151 is not proper, therefore, the notice u/s.148A(d) of the Act is held to be invalid which renders the subsequent assessment proceedings as null and void and without jurisdiction and are therefore quashed. Ground No.3 raised by the assessee is allowed.”
6. Admittedly, in the instant case also, the Assessing Officer has issued notice u/s.148A(d) and u/s.148 of the Act with the prior approval of Principal Commissioner and not from the Principal Chief Commissioner as mandated u/s.151 of the Act and therefore notice u/s.148 of the Act is legal and bad in law and therefore ld. Assessing Officer failed to assume proper jurisdiction to carry out the reassessment proceedings. I therefore quash the consequential reassessment proceedings being invalid. Accordingly, the impugned order is set aside. Legal issue raised by the assessee is allowed.
7. Since the assessee succeeds on the legal issue, dealing with remaining grounds would be merely academic in nature.
8. In the result, the appeal of the assessee is allowed as per terms indicated hereinabove.
Order pronounced on this 06th day of October, 2026.
