Notice was issued without obtaining prior approval from the appropriate authority as mandated under Section 151(ii) of the Act.

 

Mumbai Tribunal in the case of Manisha Nitin Brahmbhatt (ITA No. 1651/Mum/2025) has quashed the assessment as the notice was issued without obtaining prior approval from the appropriate authority as mandated under Section 151(ii) of the Act.

The Tribunal allowed the appeal filed by Manisha Nitin Brahmbhatt for AY 2017–18. The Tribunal quashed the reassessment proceedings.

Let us have a Short Overview of the case:

Key Issues:
Whether the reassessment notice issued under Section 148 was valid in law.

Whether the approval for issuing the notice was obtained from the correct authority as per Section 151 of the Act.

Whether the addition of ₹3,77,29,617 under Section 68 (unexplained cash credits) was sustainable (not adjudicated due to quashing of notice).

Assessee’s Arguments:
The notice under Section 148 was issued beyond three years from the end of the relevant AY.

As per Section 151(ii), approval should have been obtained from the Principal Chief Commissioner or equivalent authority.

However, the approval was obtained from the Principal Commissioner, which is not valid under the law for cases beyond three years.

Therefore, the notice is bad in law and should be quashed.

Revenue’s Arguments:
The Revenue did not dispute that the approval was obtained from the Principal Commissioner.

No counter-argument was provided to justify the validity of the notice under the amended Section 151.

Tribunal’s Decision:
The notice under Section 148 was issued on 27/07/2022 for AY 2017–18, which is beyond three years from the end of the relevant AY (i.e., beyond 31/03/2021).

As per Section 151(ii), in such cases, approval must be obtained from the Principal Chief Commissioner or equivalent authority.

Since the approval was obtained from the Principal Commissioner, the notice was issued without proper sanction and is therefore invalid.

The reassessment notice under Section 148 was quashed.

Since the notice itself was invalid, the Tribunal did not examine the merits of the addition under Section 68.

The copy of the order is as under:

1747629883-pDNeGX-1-TO