2025 (7) TMI 667 - AT - Income Tax

Validity of reassessment proceedings - competent authorities to grant the approval - as alleged no valid approval for the purpose of section 151 - Scope of old regime - HELD THAT - Prior approval of Principal Chief Commissioner or Principal Director General and where these two authorities are not there then the Chief Commissioner or Director General are competent authorities to grant the approval. However in the case in hand such approval of these competent authorities have not been taken and the copy of notice on record shows that the approval has been accorded by the Principal Commissioner of Income-tax-1 New Delhi on 27.07.2022 which seems to have been as per the old regime. Thus we are inclined to sustain the ground no.4 in impugned order for in AY 2017-18. The appeal of the assessee is allowed.

Summary

The Appellate Tribunal (ITAT Delhi) addressed two appeals by the assessee against orders of the Commissioner of Income-tax (Appeals) dated 27.01.2025.1. **AY 2016-17 (ITA No.1899/Del/2025):** The tribunal noted that although notices were issued, the record lacked clarity on the manner and due service of such notices to the assessee. Emphasizing the need for due process, the tribunal held it "appropriate to give the assessee an opportunity to contest on merits." Consequently, it allowed the appeal for statistical purposes, set aside the impugned order, and directed the CIT(A) to decide the issue afresh after proper notice and hearing.2. **AY 2017-18 (ITA No.1900/Del/2025):** The tribunal examined the validity of the approval under Section 151 of the Income Tax Act for issuing notices under Section 148. Referring to the Supreme Court's ruling in *Union of India vs. Rajeev Bansal* (2024), it reiterated that while prior approval under Sections 148A(a) and 148A(b) may be waived, the approval under Section 148A(d) and Section 148 must be obtained from the competent authority as per the new regime. The tribunal found that the approval was granted by the Principal Commissioner under the old regime, not by the competent authorities (Principal Chief Commissioner or Principal Director General) as required. Therefore, the impugned assessment was quashed, and the appeal allowed.**Key holdings:**- Due service of notices must be clearly recorded to uphold procedural fairness.- Prior approval under Section 151 is mandatory for issuing notices under Section 148 after passing orders under Section 148A(d), per the Supreme Court's directive.- Non-compliance with these procedural requirements renders the assessment invalid.Order pronounced on 09.07.2025.