ORDER
Vijay Pal Rao, Vice President.- The above five appeals are filed by the different assessee’s and are directed against five separate orders of the learned CIT(A)-National Faceless Assessment Centre [in short “NFAC”], Delhi, tabulated hereinabove in the above cause title. Since common issues are involved in all these appeals therefore, for the sake of convenience, these five appeals are clubbed together for the purpose of hearing and adjudication.
2. At the outset, we note that in ITA.No.535/Viz./2025 and in appeal ITA.No.17/Viz./2026 there was a delay of 95 and 68 days in filing the present appeals before the Tribunal. In ITA.No.535/Viz./2025 the assessee has filed a petition for condonation of delay along with affidavit explaining the cause of delay. The assessee has stated that in the appeal filed before the learned CIT(A) in Form-35 his counsel’s email-ID was given. Therefore, he was not having the knowledge of hearing of the appeal before the learned CIT(A) and only in the month of March, 2025 he received a call from the department for payment of outstanding dues. Thereafter, immediately the assessee consulted a Senior Counsel for filing of the appeal before the Tribunal and in the process there was a delay of 95 days. The Learned Authorised Representative of the Assessee has submitted that the assessee has a good case on merits and denial of opportunity to be heard would cause serious hardship and injustice. He accordingly, pleaded that the delay of 95 days in filing the present appeal before the Tribunal may please be condoned and appeal of the assessee be admitted for hearing and adjudication.
3. In ITA.No.17/Viz./2026 there was a delay of 68 days in filing the present appeal before the Tribunal. The assessee has filed a petition for condonation of delay along with affidavit explaining the cause of delay. It was the submission of the assessee that he was suffering with dengue fever in 1st week of November, 2025 and advised by the doctor to confine to the house for three weeks and during the period it slipped out of mind of the assessee to sign the appeal papers. The assessee has received a phone call from the Counsel’s office on 28.12.2025 with respect to filing the appeal before the Tribunal. Accordingly, the assessee approached his Counsel for filing of the appeal and in the process there was a delay of 68 days in filing the appeal before the Tribunal. Learned Authorised Representative of the Assessee accordingly submitted that the delay in filing the present appeal before the Tribunal within the limitation period is neither willful nor wanton but due to the circumstances beyond the control of the assessee. He accordingly pleaded that the delay 68 days in filing the present appeal may please be condoned in the interest of justice and appeal of the assessee be admitted for hearing and adjudication.
4. On the other hand, the learned DR has opposed for condonation of delay in filing the above appeals before the Tribunal. He submitted that the assessees are failed to explain sufficient cause which prevented them for filing the instant appeals before the Tribunal. He submitted that there was a gross negligence on the part of the assessees in filing the present appeals before the Tribunal. He therefore, submitted that the delay in filing the present appeals should not be condoned.
5. We have heard learned Authorised Representative of the Assessee as well as learned DR. We find that the reasons explained by the assessees in filing the present appeals before the Tribunal are bonafide and the circumstances are beyond the control of the assessees. We, therefore, by following the Judgment of Hon’ble Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji (SC)/[1987] 167 ITR 471 (SC), condone the delay of 95 days and 68 days in filing the appeals ITA.Nos.535/Viz./2025 and ITA.No.17/Viz./2026 respectively before the Tribunal and admit the appeals for hearing and adjudication.
6. Since identical issues are raised by the assessees in all these five appeals therefore, for the purpose of recording the facts and issues, the appeal in ITA.No.248/Viz./2025 for the assessment year 2018-2019 is taken as “lead” case. The assessee has raised the following grounds of appeal:
1. “That under the facts and circumstances of the case the order passed u/s 147 r.w.s. 144B of the IT Act dt: 28/12/2023 that was upheld by the Ld. CIT(A) NFAC vide order passed u/s 250 of the IT Act dt: 13.03.2025 is not in accordance with facts of the case and provisions of law.
2. The Ld. CIT(A) erred in disregarding the appellant’s claim of deduction u/s 80P(2)(a) (i) of the IT Act, on the ground that the return was not filed u/s 139(1) of the IT Act, without appreciating that the claim was made in the return filed u/s 148 of the IT Act.
3. The Ld. CIT(A) failed to appreciate that the provisions of Sec 80AC of the IT Act are directory in nature and that the claim of benefit u/s 80P(2)(a)(i), this being an incentive provision, ought to be interpreted liberally.
4. The appellant submits that for these and other reasons to be urged during the hearing, the orders passed u/s 250 of the IT Act are liable to be set aside.”
6.1. The assessee has also raised additional ground which read as under:
“The notice u/s 148 was issued without obtaining prior approval from the specified authority as required under section 151, rendering the proceedings invalid and unsustainable in law.”
7. The learned Authorised Representative of the Assessee has submitted that the issue raised in the additional ground is purely legal in nature to challenge the validity of the notice issued by the Assessing Officer u/sec.148 of the Income Tax Act [in short “the Act”], 1961 due to invalid approval u/sec.151 of the Act and therefore, for adjudication of the additional ground no fresh verification/investigation of facts or material is required therefore, the additional ground raised by the assessee be admitted for adjudication on merits as held by the Hon’ble Supreme Court in the case of
National Thermal Power Co. Ltd. v.
CIT 229 ITR 383 (SC).
8. The learned DR objected to the admission of the additional ground raised by the assessee at this stage and submitted that the assessee has not raised this issue either before the Assessing Officer in response to the show cause notice issued u/sec.148A(b) of the Act nor before the learned CIT(A). The learned DR further submitted that in some of the cases the approval was granted by he Pr. CIT within 03 years from the end of the assessment year however, the notice was issued by the Assessing Officer after 03 years. The learned DR has submitted that since the approval was granted before 03 years from the expiry of assessment year therefore, the same is valid and subsequent notice issued by the Assessing Officer would not be illegal when approval was granted within time and by Competent Authority.
9. We have considered the rival submissions as well as relevant material on record. There is no dispute that the issues raised by the assessee in the additional ground of appeal is purely legal in nature and the same can be adjudicated on the basis of the facts and material already available on record before the Assessing Officer. Though the assessee did not raise this issue before the Assessing Officer in response to show cause notice issued u/sec.148A(b) of the Act as well as before the learned CIT(A), however, there is no bar for raising the legal issue before the Tribunal if for adjudication of the issue does not require any verification and investigation of any fact or record as held by the Hon’ble Supreme Court in the case of NTPC (supra). Accordingly, the additional ground raised by the assessee is admitted for adjudication. Since the issue raised by the assessee is legal in nature and goes to the root of the matter therefore, we first take up the additional ground raised by the assessee for hearing and adjudication.
10. An identical ground has been raised in all the other four appeals. Accordingly, in view of our finding in appeal ITA.No.248/Viz./2025, the additional ground raised by the assessees in other four appeals are also admitted for hearing and adjudication.
11. The learned Authorised Representative of the Assessee has submitted that the approval of PCIT,
Visakhapatnam-1 is taken before issuing the notice u/sec.148 of the Act. He has also referred to the notice issued by the Assessing Officer placed at in the paper book and submitted that the Assessing Officer has again referred to the same Authority regarding the necessary satisfaction/approval. Thus, the learned Authorised Representative of the Assessee has submitted that the Assessing Officer has taken the approval from the PCIT while passing the order u/sec.148A(
d) as well as issuing notice u/sec.148 of the Act dated 02.04.2022 whereas as per the provisions of sec.151(
ii) the notice issued u/sec.148 after three years from the end of the assessment year, the Specified Authority is Chief Commissioner/Director General of Income Tax and not the PCIT. Thus, he has contended that the Order passed by the Assessing Officer u/sec.148A(
d) of the Act and notice issued u/sec.148 of the Act are invalid and liable to be quashed. In support of his contention, he has relied upon the Order of ITAT, Hyderabad Tribunal in the case of
Padma Kallu v.
ITO (Hyderabad –
Trib.).
12. On the other hand, the learned DR has submitted that as per the proviso to sec.151 of the Act the time given in fourth to sixth proviso to sec.149(1)(b) shall be excluded for the purpose of limitation of three years provided u/sec.151 of the Act. He has relied upon the Orders of the authorities below.
13. On the other hand, the learned DR has submitted that as per the proviso to sec.151 of the Act the time given in fourth to sixth proviso to sec.149(1)(b) shall be excluded for the purpose of limitation of three years provided u/sec.151 of the Act. He has relied upon the Orders of the authorities below.
14. We have considered the rival submissions as well as relevant material on record. In all these cases the details of notices issued by the Assessing Officer u/sec.148A(b), Order passed u/sec.148A(d) and notice issued u/sec.148 of the Act are as under:
| Sl.No. |
ITA.No. |
A.Y |
Notice u/s. 148A(b) |
Order u/s. 148A(d) |
Notice u/s.148 |
Approval granted by |
| 1. |
248/Viz./2025 |
2018 2019 |
22.03.2022 |
30.03.2022 |
02.04.2022 |
PCIT |
| 2. |
535/Viz./2025 |
21.03.2022 |
07.04.2022 |
08.04.2022 |
| 3. |
17/Viz./2026 |
24.03.2022 |
12.04.2022 |
12.04.2022 |
| 4. |
156/Viz./2026 |
23.03.2022 |
27.04.2022 |
27.04.2022 |
| 5. |
575/Viz./2026 |
23.03.2022 |
07.04.2022 |
07.04.2022 |
15. There is no dispute that in all these cases the approval was taken by the Assessing Officer from Pr. CIT before issuing the notice u/sec.148 of the Act. It is also not in dispute that the notices were issued by the Assessing Officer after expiry of 03 years from the end of assessment year under consideration therefore, the Specified Authority as per sec.151(ii) of the Act is Chief Commissioner of Income Tax Act/ Director General of Income Tax but not PCIT in case where the notice is issued after 03 years from the end of the assessment year. In all the five cases before us, the notices issued by the Assessing Officer u/sec.148 are beyond three years from the end of the assessment year therefore, the approval granted by the PCIT is invalid and not in accordance with the provisions of sec.151(ii) of the Act. The Competent Authority is based on the timing of the issuance of notice u/sec.148 of the Act and not the timing of granting approval by the Authority. In case where the approval is taken before expiry of 03 years from the end of the assessment year but the notice is issued by the Assessing Officer after 03 years then, the said notice cannot be considered as a valid notice being issued after 03 years from the end of the assessment year for want of proper approval. In such a situation, the Assessing Officer ought to have taken a fresh approval from the Specified Authority prescribed u/sec.151 of the Act. An identical issue has been considered by the Hon’ble Telangana High Court in the case of Deloittee Consulting India (P.) Ltd. v. Assessment Unit, Income-tax Department, National Faceless Assessment Center, New Delhi 481 ITR 175 (Telangana)/ Civil Writ Petition No.4061 of 2024, dated 25.09.2025. By following the said Judgment of Hon’ble Telangana High Court, this Tribunal in the case of Pothina Satyanarayan, Visakhapatnam v. ITO, Ward- 2(5), Visakhapatnam (supra), has decided the issue in favour of the assessee. We further note that an identical issue has been considered by ITAT, Hyderabad Bench, Hyderabad in the case of Hanumantha Rao Annabattina v. ITO [IT Appeal No.514 (Hyd.) of 2026, dated 05.08.2026] in Para nos.9.1 to 9.3 held as under:
“9.1. Since the notice u/sec.148 dated 09.04.2022 was issued after expiry of three years from the end of the assessment year under consideration therefore, the Competent Authority to grant approval for issuing notice u/sec.148 as per sec.151(ii) of the Act as exist at the relevant point of time i.e., the date of issuing the notice u/sec.148 is the CCIT/DGIT and not Pr. CIT. An identical issue has been considered by Hon’ble jurisdictional Telangana High Court in the case of Deloittee Consulting India (P.) Ltd., v. Assessment Unit Income Tax Department, National Faceless Assessment Centre, New Delhi(supra) in Para nos.48 to 50 as under:
“48. The proviso to Section 151 has been introduced by the Finance Act, 2023 with effect from 01.04.2023. The relevant Section 151 with its proviso is applicable to the case of the petitioner is quoted hereunder:
151. Sanction for issue of notice:- Specified authority for the purposes of Section 148 and Section 148A shall be,-
(i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year.
(ii) Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year.
Provided that the period of three years for the purposes of clause (1) shall be computed after taking into account the period of limitation as excluded by the third or fourth or fifth provisos or extended by the sixth proviso to sub-section (1) of Section 149.
49. In the present case, the order under Section 148A(d) and notice under Section 148 have been issued on 07.04.2022 relatable to the relevant Assessment Year 201819 i.e., after more than three years from the end of the relevant assessment year. The approval before passing the order under Section 148A(d) of the Act and before issuing of notice under Section 148 of the Act has been taken from the Principal Commissioner of Income Tax by the respondent No.1, which is permissible only if three years or less than three years have lapsed from the end of the relevant assessment year. In the present case, the relevant three years lapsed on 31.03.2022. Therefore, the prior approval of the Principal Chief Commissioner or Principal Director General or the Chief Commissioner or the Director General was required to be obtained before passing of the order under Section 148A(d) or before issuance of the notice under Section 148 of the Act.
50. Learned counsel for the respondent has relied upon the proviso to Section 151 of the Act inserted by the Finance Act, 2023 with effect from 01.04.2023 quoted above to contend that the period of seven days furnished to the assessee to submit reply to the notice under Section 148A(b) issued on 23.03.2022 has to be excluded for counting the period of three years. It is submitted that the proviso is clarificatory in nature and as such, it would operate from the date when the amended Section 151 was brought into force i.e., 01.04.2021. However, such a contention is fit to be rejected since the proviso to Section 151 has been inserted by the Finance Act, 2023 only with effect from 01.04.2023. It, therefore, cannot be applied retrospectively to exclude the period of seven days in furnishing the reply to the notice under Section 148A(b) of the Act by the assessee. The Assessing Officer could not have assumed exclusion of such a period while passing the order under Section 148A(d) of the Act or issuing notice under Section 148 of the Act on 07.04.2022 that such a proviso excluding the period consumed in furnishing the reply is going to be brought into the statute book by amendment by the Finance Act, 2023 with effect from 01.04.2023. In taxing statutes, intendment cannot be assumed unless specifically expressed in the provision enacted by the legislature. Therefore, the reopening of assessment without sanction/approval of the specified authority in accordance with Section 151 of the Act was bad in law. Consequently, reassessment order dated 16.01.2024 also is bad in law.”
9.2 . Thus, on identical facts the Hon’ble jurisdictional High Court has held that the notice issued u/sec.148 of the Act dated 07.04.2022 which is after three years from the end of the assessment year by taking the prior approval from the Pr. CIT is invalid and bad in law and consequently, the re-assessment order passed by the Assessing Officer is also bad in law. By following the above Judgment of Hon’ble jurisdictional High Court, the Coordinate Bench of ITAT, Hyderabad in the case of Vijaya Malisetty, Khammam v. ITO, Ward- 1, Khammam (supra) has held in Para nos. 14 to 16 as under:
“14. At this stage, we may herein observe that our aforesaid view that in a case where a period of more than three years have elapsed from the end of the relevant assessment year, then, approval for issuing the notice under section 148 of the Act has to be taken from the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General for issuing the notice under section 148 of the Act is supported by the recent judgment of the Hon’ble High Court of Telangana in Deloitte Consulting India Private Limited v. The Assessment Unit, Income Tax Department, Civil Writ Petition No. 4061 of 2024, dated 25/09/2025. For the sake of clarity, we deem it apposite to cull out the observations of the Hon’ble jurisdictional High Court in the case of Deloitte Consulting India Private Limited v. The Assessment Unit, Income Tax Department (supra), as under:
“48. The proviso to Section 151 has been introduced by the Finance Act, 2023 with effect from 01.04.2023. The relevant Section 151 with its proviso is applicable to the case of the petitioner is quoted hereunder:
151. Sanction for issue of notice:- Specified authority for the purposes of Section 148 and Section 148A shall be,-
(i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year;
(ii) Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year:
Provided that the period of three years for the purposes of clause (i) shall be computed after taking into account the period of limitation as excluded by the third or fourth or fifth provisos or extended by the sixth proviso to sub-section (1) of Section 149.
49. In the present case, the order under Section 148A(d) and notice under Section 148 have been issued on 07.04.2022 relatable to the relevant Assessment Year 2018- 19 i.e., after more than three years from the end of the relevant assessment year. The approval before passing the order under Section 148A(d) of the Act and before issuing of notice under Section 148 of the Act has been taken from the Principal Commissioner of Income Tax by the respondent No.1, which is permissible only if three years or less than three years have lapsed from the end of the relevant assessment year. In the present case, the relevant three years lapsed on 31.03.2022. Therefore, the prior approval of the Principal Chief Commissioner or Principal Director General or the Chief Commissioner or the Director General was required to be obtained before passing of the order under Section 148A(d) or before issuance of the notice under Section 148 of the Act.
50. Learned counsel for the respondent has relied upon the proviso to Section 151 of the Act inserted by the Finance Act, 2023 with effect from 01.04.2023 quoted above to contend that the period of seven days furnished to the assessee to submit reply to the notice under Section 148A(b) issued on 23.03.2022 has to be excluded for counting the period of three years. It is submitted that the proviso is clarificatory in nature and as such, it would operate from the date when the amended Section 151 was brought into force i.e., 01.04.2021. However, such a contention is fit to be rejected since the proviso to Section 151 has been inserted by the Finance Act, 2023 only with effect from 01.04.2023. It, therefore, cannot be applied retrospectively to exclude the period of seven days in furnishing the reply to the notice under Section 148A(b) of the Act by the assessee.
The Assessing Officer could not have assumed exclusion of such a period while passing the order under Section 148A(d) of the Act or issuing notice under Section 148 of the Act on 07.04.2022 that such a proviso excluding the period consumed in furnishing the reply is going to be brought into the statute book by amendment by the Finance Act, 2023 with effect from 01.04.2023. In taxing statutes, intendment cannot be assumed unless specifically expressed in the provision enacted by the legislature. Therefore, the reopening of assessment without sanction/approval of the specified authority in accordance with Section 151 of the Act was bad in law. Consequently, reassessment order dated 16.01.2024 also is bad in law.”
(emphasis supplied by us)
15. We find that the Hon’ble High Court in its aforesaid order had not only observed that in the case of the assessee before them ie., for AY 2018-19, the specified authority for granting approval under section 151 of the Act was the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General as a period of more than three years had lapsed from the end of the relevant Assessment Year, but had also rejected the claim of the revenue that the “proviso” to section 151 of the Act as had been made available on the statute vide the Finance Act, 2023 w.e.f. 01/04/2023 was to be given a retrospective effect.
16. We, thus, in terms of our aforesaid observation, concur with the Ld. AR that in the present case before us for A.Y. 2018-19, wherein notice under Section 148 of the Act was issued on 07.04.2022, i.e., beyond a period of three years from the end of the assessment year, the A.O. was statutorily obligated to have obtained the approval from either of the authorities specified u/s. 151(ii) of the law as was then available on the statute, viz. Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General. However, as the A.O. had obtained the approval from the Pr. Commissioner of Income Tax, i.e. an authority who was not vested with any jurisdiction as per the mandate of Section 151 of the Act (as made available on the statute w.e.f 01.04.2021), therefore, the assessment so framed by him u/s.147 r.w.s. 144 r.w.s 144B of the Act, dated 13/02/2024, being devoid and bereft of any valid assumption of jurisdiction, is liable to be quashed. Accordingly, we quash the assessment framed by the A.O. under Section 147 r.w.s 144 r.w.s 144B of the Act, dated 13.02.2024, in terms of our aforesaid observations. ”
9.3 . Accordingly, by following the Judgment of Hon’ble jurisdictional High Court as well as the decision of Coordinate Bench of this Tribunal (supra) and to maintain the rule of consistency, I am of the considered opinion that the Order passed by the Assessing Officer u/sec.148A(d) as well as notice issued u/sec.148 of the Act dated 09.04.2022 by taking the prior approval of Pr. CIT is not valid and liable to be quashed. I order accordingly.
16. Accordingly, to maintain the rule of consistency and by following the earlier decisions of this Tribunal, we hold that the notices u/sec.148 of the Act were issued by the Assessing Officer in all the above five appeals after 03 years from the end of the assessment year under consideration with prior approval of PCIT is invalid and liable to be quashed. We Order accordingly.
17. The assessee has also raised an issue regarding the validity of the notice issued u/sec.148 by the Jurisdictional Assessing Officer [in short “JAO”] instead of Faceless Assessing Officer [in short “FAO”]. Since this issue is pending adjudication before the Hon’ble High Courts as remanded by the Hon’ble Supreme Court therefore, at this stage, this issue is not taken up for adjudication and kept open. It will be taken up after the outcome of the proceedings pending before the Hon’ble High Court.
18. Since, we have quashed the notices issued by the Assessing Officer u/sec.148 of the Act being invalid for want of valid approval u/sec.151 of the Act, it vitiates the re-assessment orders passed by the Assessing Officer therefore, the other grounds raised by the assessees become infructuous in all these appeals and not taken up for adjudication.
19. In the result, all the five appeals of the assessees are allowed. A copy of this common order be placed in the respective case files.
