Venkata Prasad Pulipati Vs ITO (ITAT Visakhapatnam)
Wrong Boss Signed, Reopening Dies: ITAT Quashes 148 for Want of PCIT/PCDG Sanction
The Visakhapatnam Bench of the ITAT quashed the reassessment framed u/s 147 r.w.s. 144B for AY 2016-17 on the ground of lack of valid sanction u/s 151. The notice u/s 148 dated 27-07-2022 was issued beyond three years from the end of the relevant AY. As per Section 151(ii) (post-Finance Act, 2021), such reopening mandatorily requires approval of the Principal Chief Commissioner / Principal Director General (or CCIT/DG).
In the present case, the approval was obtained only from the Pr. CIT , which is not the specified authority once three years have elapsed. The Tribunal rejected Revenue’s argument seeking exclusion of the Section 148A(b) SCN period for computing three years, holding that the proviso to Section 151 enabling such exclusion was inserted only by Finance Act, 2023 w.e.f. 01-04-2023 and cannot operate retrospectively.
Relying on the statutory scheme post-Finance Act, 2021, CBDT Instruction No.01/2022, and recent judicial precedents (including Telangana HC in Deloitte Consulting India Pvt. Ltd. and SC dismissal in LinkedIn Singapore), the Tribunal held the reassessment to be jurisdictionally void. Consequently, the entire assessment was quashed, and all other grounds on merits were left open.
FULL TEXT OF THE ORDER OF ITAT VISAKHAPATNAM
The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, (NFAC), Delhi, dated 18/09/2025, which in turn arises from the order passed by the Assessing Officer (for short, “A.O.”) under Section 147 r.w.s 144B of the Income Tax Act, 1961 (for short, “the Act”) dated 30/05/2023 for the Assessment Year (AY) 2016-17. The assessee has assailed the impugned order of the CIT(A) on the following grounds of appeal:
“1. The notice issued under section 148 dated 27.07.2022 is barred by limitation as per the provisions of section 149(1)(b), effective from 01.04.2021, of the Income-tax Act, 1961.
2. The notice issued under section 148 dated 27.07.2022 is barred by limitation being beyond the surviving period as determined by the Honourable Supreme Court of India in UOI vs. Rajeev Bansal.
3. The Notice issued under section 148 dated 27.07.2022 is invalid as the same is issued after obtaining the approval of the Pr. CIT as against the approval of Pr. CCIT as mandated by section 151(ii) for reopening of assessment beyond three years from the end of the relevant assessment years.
4. The notice issued under section 148 dated 27.07.2022 is invalid as the same is issued by the jurisdictional assessing officer i.e., Income-tax Officer, Ward-2(1), Guntur, instead of the National Faceless Assessment Centre.
5. The Notice issued under section 148 dated 27.07.2022 is invalid as the same is issued without DIN and the reasons for not being able to generate DIN are not mentioned in the body of the notice.
6. The Notice issued under section 148 dated 27.07.2022 is invalid as the copy of the approval by the specified authority under section 151 is not provided to the assessee along with the order under section 148A(d) as mandated by the CBDT Guidelines.
7. The National Faceless Assessment Centre is not justified in treating the entire consideration of Rs.11,55,505 as long term capital gains without giving any deduction towards cost of acquisition.
8. The National Faceless Assessment Centre is not justified in treating Rs.33,88,000/- as unexplained investment under section 69 of the Income-tax Act, 1961.
9. All the above grounds of appeal are mutually exclusive and without prejudice to one another.
10. The appellant craves leave to add to; alter; modify; delete all or any of the above grounds of appeal.”
2. Succinctly stated, the assessee had filed his return of income for AY 2016-17 on 28/09/2016, declaring a total income of Rs. 5,60,930/-. Subsequently, the AO based on information, viz., (i) that the assessee during the subject year was in receipt of land (along with construction) wherein the worth of his share as a co-owner worked out at Rs.11,55,505/-; (ii) that the assessee along with two other persons had made investment during the subject year towards purchase of an immovable property to the tune of Rs.29,63,200/-; and (iii) had sold an immovable property of Rs.4,10,000/-, reopened the case vide notice under section 148 of the Act, dated 30/06/2021. Thereafter, the AO, based on the judgment of the Hon’ble Supreme Court in the case of UOI vs. Ashish Agarwal (2022) SCC Online SC 543, dated 04/05/2022, issued notice under section 148 of the Act, dated 27/07/2022.
