Leela Devi Jain Vs ITO (ITAT Raipur)
Summary: The Income Tax Appellate Tribunal, Raipur SMC Bench, comprising Judicial Member Shri Partha Sarathi Chaudhury, allowed the appeal of Leela Devi Jain for Assessment Year 2015-16 against the order dated 5 August 2025 passed by the CIT(Appeals)/NFAC. The principal controversy concerned the validity of reassessment proceedings initiated through a notice under Section 148 of the Income Tax Act, 1961, where prior approval had been obtained from the Chief Commissioner of Income Tax, Raipur, instead of the jurisdictional Principal Chief Commissioner of Income Tax, Madhya Pradesh and Chhattisgarh, Bhopal. The assessee raised an additional ground challenging the assessment order dated 31 March 2023 as illegal and non-est for want of valid approval from the authority specified under Section 151 of the Act.
The assessee contended that Section 151(ii) of the Income Tax Act, 1961 required approval from the Principal Chief Commissioner of Income Tax and permitted the Chief Commissioner to exercise that function only where the relevant higher office did not exist. It was submitted that the Principal Chief Commissioner of Income Tax, Madhya Pradesh and Chhattisgarh, headquartered at Bhopal, was the competent jurisdictional authority. Consequently, approval obtained from the Chief Commissioner of Income Tax, Raipur, could not satisfy the statutory requirement.
The Tribunal considered the submissions filed by both parties. The Departmental Representative sought to distinguish the functions of the Principal Chief Commissioner by confining the role of that authority to cadre control. The Tribunal, however, referred to CBDT Notification No. S.O. 2813(E) [No. 56/2014] dated 3 November 2014, which explained the hierarchy of income-tax authorities. It observed that the Principal Chief Commissioner stood above the Chief Commissioner in that hierarchy. The Tribunal further noted that the office of the Principal Chief Commissioner of Income Tax, Madhya Pradesh and Chhattisgarh, Bhopal, existed and that its jurisdiction extended to Chhattisgarh notwithstanding its headquarters being situated in Madhya Pradesh.
The Revenue also relied upon a clarification contained in the memorandum to the Finance Bill, 2026. The Tribunal rejected this argument, holding that such clarifications could not supersede the express statutory requirements of Section 151(ii). It observed that the existence of the jurisdictional Principal Chief Commissioner was not disputed and that the Chief Commissioner could exercise the approval function only upon satisfaction of the statutory condition concerning the absence of the higher authority. The Tribunal also referred to Sections 2(34A) and 117 of the Act while determining the legal position concerning the constitution and jurisdiction of the Principal Chief Commissioner’s office.
The Tribunal concluded that the statutory condition permitting approval by the Chief Commissioner of Income Tax was not satisfied because a duly constituted and notified Principal Chief Commissioner already exercised jurisdiction over Madhya Pradesh and Chhattisgarh. Accordingly, approval granted by the Chief Commissioner of Income Tax was contrary to Section 151(ii). The reassessment proceedings initiated on the strength of that approval were held bad in law, void ab initio and quashed. The remaining grounds of appeal were treated as academic, and the assessee’s appeal was allowed. The ruling emphasises that compliance with the prescribed reassessment-sanction hierarchy is a jurisdictional requirement and that the existence of the competent higher authority cannot be disregarded merely because its office is situated outside the assessee’s State.
FULL TEXT OF THE ORIGINAL JUDGMENT/ORDER
The present appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, NFAC dated 05.08.2025 for the assessment year 2015-16 as per the grounds of appeal on record.
2. In the Additional Ground of Appeal, the assessee has assailed as follows:
“In the facts and circumstances of the case and in law, the assessment order passed on 31/03/2023 on the basis of notice u/s. 148 of the Income-tax Act, 1961 is illegal and non-est in so far as there is no valid approval of the authority specified u/s.151 of the Income Tax Act, 1961 for issuing notice ill s.148 as it was obtained from the Chief Commissioner of Income Tax, Raipur in place of Principal Chief Commissioner of Income Tax, MP & CG, Bhopal.”
3. In this regard, both the Revenue as well as the assessee had filed respective response which have been carefully considered. Admittedly, there is Pr. Chief Commissioner of Income Tax, Madhya Pradesh & Chhattisgarh, Bhopal and as per the submissions of the Ld. Sr. DR, it seems that she confines or categorized to confine the role of Pr. Chief Commissioner of Income Tax solely to cadre control function. However, as per the CBDT Notification No.S.O.2813(E)[No.56/2014], dated 03.11.2014, the hierarchy of the Income Tax Authorities is explained where the Pr. Chief Commissioner of Income Tax is the superior authority then the Chief Commissioner of Income Tax.
4. As per Section 151(ii) of the Income Tax Act, 1961 (for short ‘the Act’), the approval has to be given by the Pr. Chief Commissioner of Income Tax and if he is not there, then only the role of Chief Commissioner of Income Tax comes into play. However, the fact of the matter is herein that the office of the Pr. Chief Commissioner of Income Tax is present in the State of Madhya Pradesh and Chhattisgarh. This is the exact jurisdiction as enshrined by the Board for the purpose of Income Tax Act, and therefore, one cannot say there is no Pr. Chief Commissioner of Income Tax for Chhattisgarh since though seat of office of Pr. Chief Commissioner of Income Tax is in Madhya Pradesh, however, his jurisdiction extends also to the State of Chhattisgarh. The Ld. Sr. DR could not refute these facts. She only banked upon the clarification in the memorandum to the Finance Bill, 2026. However, these clarifications cannot supersede the dictate, the authority of the statute i.e. Section 151(ii) of the Act, hence, submissions of the Ld. Sr. DR are sans any merit.
5. The jurisdiction of the Chief Commissioner of Income Tax to grant approval u/s. 151 of the Act is expressly contingent upon the absence of the Pr. Chief Commissioner of Income Tax. In this case, the Pr. Chief Commissioner of Income Tax having jurisdiction over Madhya Pradesh and Chhattisgarh is duly constituted and notified within the meaning of Section 2(34A) read with section 117 of the Act. Therefore there exist no condition precedent in the present case for the Chief Commissioner of Income Tax to exercise jurisdiction as per Section 151(ii) of the Act since the Pr. Chief Commissioner of Income Tax is already present for the State of Chhattisgarh. It is, therefore, crystal clear that the approval granted by the Chief Commissioner of Income Tax is in clear violation of the statutory mandate. Therefore, reassessment proceedings initiated on the basis of such invalid approval becomes bad in law, void ab initio, hence, quashed.
6. Rest all other grounds stands academic only.
7. That as per above terms, the appeal of the assessee is allowed.
Order pronounced in open court on 15th day of June, 2026.
