Notice Under Section 148 Issued After 3 Years Must be Approved by Higher Authority, Not PCIT
The Income Tax Appellate Tribunal (ITAT), Ahmedabad, quashed reassessment proceedings of a company after finding that the notices beyond the three-year period were issued without approval from the correct authority.
The Revenue filed an appeal before the Income Tax Appellate Tribunal (ITAT), Ahmedabad, to challenge the deletion of a large addition made by the assessing officer for the accommodation entries received by an entity. While the assessee, Sameep Fabrics Pvt. Ltd., filed a cross objection against this deletion order of CIT(A), the assessee company challenged the validity of reopening under section 148.
The assessee company argued that the notices for AY 2017-18 and AY 2018-19 were issued after more than 3 years, and approval was wrongly granted by the Principal
Commissioner of Income-tax (PCIT) instead of the higher authority.
The Tribunal agreed with the company, saying that the notice u/s 148 was issued on 31.07.2022 for AY 2017-18 and for AY 2018-19 on 10.04.2022, which shows that it was beyond the three-year period.
The ITAT cited clause (ii) of Section 151, which specifies the higher authority whose approval is required before issuing a notice for reassessment under Section 148, if three years have elapsed from the end of the relevant assessment year. The specified authority includes the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, and not the Principal Commissioner.
Based on this, the reassessment proceedings initiated under section 147 of the Income Tax Act were declared null and void, and the same were quashed by the Tribunal.
Case Citation: DCIT Vs Sameep Fabrics Pvt. Ltd (ITAT Ahmedabad); ITA No. 2018/Ahd/2024 & CO No. 2/Ahd/2025; 24/11/2025; 2018-19
