Polavarapu Basaveswara Rao Vs ITO (ITAT Hyderabad)
Reopening Invalid for Want of Proper Approval – ITAT Quashes U/s 148 Notice
The Hyderabad ITAT quashed the reassessment proceedings holding that approval from the correct authority under Section 151 is a jurisdictional requirement, and non-compliance renders the notice void.
The notice under Section 148 was issued after 3 years from the end of the assessment year, but the Assessing Officer obtained approval only from the Principal Commissioner, whereas the law mandates sanction from higher authority (PCIT/CCIT/DGIT level) under Section 151(ii) for such cases.
The Tribunal, referring to the statutory framework, held that failure to obtain approval from the prescribed authority goes to the root of jurisdiction.
Relying on jurisdictional High Court precedents, the ITAT concluded that the notice issued without proper sanction is invalid, and consequently, the entire reassessment order was quashed without examining merits.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
This appeal is filed by Shri Polavarapu Basaveswara Rao (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”) dated22.10.2025 for the A.Y.2017-18.
2. The assessee has raised the following grounds of appeal:
“1. The learned Assessing Officer (AO) erred in law and on facts by assuming jurisdiction under Section 148 of the Income Tax Act. The notice issued is invalid as it fails to meet the requirements of Section 149(1)(b), which stipulates a specific limit of Rs. 50.00 Lakhs for escaped income and fails to comply with the provisions of Section 151 regarding the specified authority for such actions.
2. The order passed under Section 148A(d) of the Act is contrary to the actual facts of the case. Consequently, the subsequent notice issued under Section 148 is bad in law and deserves to be quashed.
3. The learned AO erred in passing the assessment order without providing the Appellant a fair and proper opportunity to be heard.
4. The learned CIT(A), National Faceless Appeal Center (NFAC), erred in law and on facts by disposing of the appeal without granting the Appellant a fair and reasonable opportunity to present their case.
5. The learned CIT(A) erred in confirming the addition of Rs.2,20,300/ – made by the Ld. AO as unexplained for cash deposit made on 08.11.2016 alleged to be deposited during demonetization period, without appreciating the submissions made by the appellant.
6. The Appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, if deemed necessary, at any time before or at the time of hearing of the appeal, to enable Your Honour to decide this appeal according to law.”
3. The brief facts of the case are that the assessee had filed an appeal before the Ld. CIT(A) against the order of the Learned Assessing Officer (“Ld. AO”) passed for Assessment Year 2017-18 under Section 147 r.w.s. 144B of the Income Tax Act, 1961(“the Act”), dated 12.05.2023. The Ld. CIT(A) dismissed the appeal of the assessee.
