PCIT Vs Wudstay Travels Pvt. Ltd. (Delhi High Court)
The Delhi High Court considered an appeal against the ITAT order dated 28.10.2025 in ITA No. 2996/Del/2025, whereby the Tribunal had allowed the assessee’s appeal and held that approval granted by the Principal Commissioner of Income Tax (PCIT) for reassessment was incompetent. The Tribunal had consequently quashed the assessment order dated 20.04.2023.
The matter concerned Assessment Year 2017-18. The first notice under Section 148 had been issued on 30.06.2021 under the earlier reassessment regime. Following the introduction of the new reassessment regime from 01.04.2021 and the Supreme Court’s directions in Ashish Agarwal, notice under Section 148A(b) was issued on 01.06.2022, followed by an order under Section 148A(d) on 21.07.2022.
The assessee challenged the reassessment on the ground that the notice/order dated 21.07.2022 was issued more than three years after the end of the relevant assessment year. According to the assessee, under Section 151 of the Income Tax Act, the required approval therefore had to be granted by the Principal Chief Commissioner, Principal Director General, Chief Commissioner or Director General, as applicable, rather than by the Principal Commissioner of Income Tax.
The Tribunal accepted this contention. It relied upon the Delhi High Court’s judgment in Communist Party of India (Marxist) v. CIT (Ex), Civil Writ Petition No. 9031/2023, decided on 28.04.2025, as well as the decision of a coordinate bench in Dalpat Baraiya vs Income Tax officer Ward -3(3)(1). The Tribunal held that because more than three years had elapsed from the end of the relevant assessment year, the approval granted by the PCIT was not by the competent authority prescribed under Section 151. It therefore allowed the assessee’s appeal and quashed the assessment order.
