Bombay High Court
AKSHAR DEVELOPERSversusASST. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 4 THANE AND ORS
- Decided
- Disposal
- Disposed Off
Holding
The order under Section 148A(d) and the notice under Section 148 are quashed because sanction was obtained from the authority under Section 151(i) instead of the authority required under Section 151(ii).
Summary
Akshar Developers filed a writ petition challenging the Income Tax Department's order under Section 148A(d) and the subsequent notice under Section 148 for Assessment Year 2017-18. The petitioner had filed a nil return and the department issued a reassessment notice more than three years after the end of the AY, after obtaining sanction from the Principal Commissioner (PCIT) under Section 151(i). The petitioner argued that, because the notice was issued after the three‑year period, sanction should have been obtained from the authority specified in Section 151(ii) (Principal Chief Commissioner, Principal Director General, Chief Commissioner or Director General). The Court held that the sanction was indeed obtained from the wrong authority, rendering the order and notice invalid. Consequently, the Court set aside the order dated 29 July 2022, the notice issued under Section 148, and the later order disposing of objections, and disposed of the writ petition.
Issues considered
- Whether the sanction for issuing a reassessment notice under Section 148/148A for AY 2017-18 was obtained from the authority prescribed under Section 151(ii) of the Income Tax Act, given that more than three years had elapsed from the end of the assessment year.
Legislation cited
- Finance Act, 2021
- Income Tax Act, 1961 — s. 148, 148A(b), 148A(d), 151(i), 151(ii)
- Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020
Subjects
- Income Tax
- Reassessment
- Section 148
- Section 148A
- Section 151
- Writ Petition
- Procedural Validity
- Sanction Authority
Judgment
2026:BHC-AS:39130-DB
6-WP-3371-2026.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 3371 OF 2026
Akshar Developers .. Petitioner
Versus
Asst. Commissioner of Income Tax
Central Circle-4, Thane and Ors. .. Respondents
Adv. Ritika Agarwal, with Adv. Yaminee Verma, i/b Acelegal, for
the Petitioner.
Adv. Ashok Kotangle, with Adv. Pranav Kulkarni, for the
Respondent/Revenue.
CORAM: B. P. COLABAWALLA &
FARHAN P. DUBASH, JJ.
DATE: SEPTEMBER 22, 2026
P. C.
1. Rule. Respondents waive service. With the consent of parties,
Rule is made returnable forthwith and heard finally.
2. By the present Writ Petition, the Petitioner challenges the order
dated 29th July 2022 passed under Section 148A(d) of the Income Tax Act,
1961 (for short “the Act”) ; the notice issued under Section 148 dated 29th
July 2022; and the subsequent order disposing of the Petitioner's objections
dated 17th February 2026. The Assessment Year in question is A.Y 2017-18.
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3. In the facts of the present case, the Petitioner has e-filed its
Return of Income for the Assessment Year 2017-18 on 6th January 2017,
declaring his total income as Nil. Initially, Respondent No.1 had issued a
Notice under Section 148 [under the erstwhile law of reassessment] on 1 st
April 2021 i.e. three years after the end of A.Y.2017-18. Subsequently because
of the judgment of the Hon’ble Supreme Court in the case of Union of
India v. Ashish Agarwal [(2022) 444 ITR 1 (SC)] the Notice dated 1st
April 2021 issued under the erstwhile Section 148 of the Act was to be treated
as a show cause notice under Section 148A(b) of the Act. Consequently,
Respondent No. 1 issued a fresh notice dated 1st June 2022 under Section
148A(b) of the Act, setting out the reasons for reopening the assessment in
terms of the amended reassessment regime introduced by the Finance Act,
2021. In response to the aforesaid notice, the Petitioner filed its detailed
objections on 10th June 2022. Thereafter, Respondent No. 1 passed an order
dated 29th July 2022 under Section 148A(d) rejecting the objections raised
by the Petitioner and issued a notice under Section 148, after obtaining
approval from Respondent No. 4 [PCIT]. Aggrieved by the aforesaid order
and consequential notice, the Petitioner has filed the present Writ Petition.
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4. The principal ground on which the impugned notice is
challenged is that the approval/sanction as contemplated under Section 151
of the Act was not granted by the correct specified authority. It is the
contention of the Petitioner that in the present case, the sanction has been
granted by Respondent No. 4 [PCIT] who is the authority mentioned in
Section 151(i) of the Act. However, since the notice under Section 148 issued
to the Petitioner is dated 29th July 2022, more than three years have elapsed
from the end of A.Y 2017-18. In such a scenario, the authority competent to
grant sanction was the authority mentioned in Section 151(ii), namely, the
Principal Chief Commissioner or the Principal Director General or the Chief
Commissioner or the Director General. It is on this basis that it is contended
that the notice issued under Section 148 is invalid in law.
5. Ms. Agarwal, the learned counsel appearing on behalf of the
Petitioner, has submitted that the impugned order passed under Section
148A(d) dated 29th July 2022, and the consequential notice under Section
148 dated 29th July 2022 was passed beyond three years from the end of the
relevant A.Y. 2017-18. In such circumstances, as per the provisions of Section
151(ii) i.e. when more than three years have elapsed from the end of the
relevant assessment year, the specified authority for obtaining the approval
was either the Principal Chief Commissioner (PCCIT), or Principal Director
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General (PDGIT), or where there is no PCCIT or PDGIT, the Chief
Commissioner(CCIT), or the Director General (DGIT). She further submitted
that in the present case the sanction/approval was obtained from Respondent
No. 4 [PCIT] who is not a “specified authority” under Section 151(ii) of the
Act. It was, therefore, submitted that the statutory requirement of obtaining
sanction from the authority specified under Section 151(ii) had not been
complied with, and consequently, the impugned order passed under Section
148A(d) and the notice issued under Section 148 of the Act are invalid in law.
6. In support of this contention the learned advocate for the
Petitioner has placed reliance on the decision of the Hon'ble Supreme Court
in the case of Union of India vs. Rajeev Bansal [2024] 167
taxmann.com 70 (SC) [2024] 301 Taxman 238 (SC) [2024] 469
ITR 46 (SC). She submitted that the Hon'ble Supreme Court, while dealing
with the issue of approval of the specified authority in terms of Section 151 of
the Act, in paragraph 78, has observed that for A.Y. 2017-18, the authority
specified under Section 151(i) of the new regime can grant sanction only till
30th June 2021. Any sanction to reassessment proceedings after 30 th June
2021 will have to be granted by specified authority prescribed under Section
151(ii) of the Act.
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7. The learned Advocate appearing on behalf of the Revenue did
not dispute the above factual position and fairly stated that appropriate
orders be passed.
8. We have heard the learned counsel for the parties and also
perused the papers and proceedings to the above Writ Petition. In the facts of
the present case, Respondent No.4 has granted the sanction for issuance of
the Notice under Section 148 of the Act on 28 th July 2022. Since the Notice
under Section 148 issued to the Petitioner is dated 29 th July 2022 a period of
more than 3 years have elapsed from the end of A.Y.2017-18. In such a
scenario the authority competent to grant a sanction was the authority
mentioned in Section 151(ii) of the Act. For the sake of convenience, Section
151, as amended by Finance Act, 2021, is reproduced below:
“Sanction for issue of notice.
151. 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 where there is no
Principal Chief Commissioner or Principal
Director General, Chief Commissioner or Director
General, if more than three years have elapsed
from the end of the relevant assessment year”
(emphasis supplied)
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9. On perusal of the order dated 29th July 2022 passed under
Section 148A(d) of the Act, we find that the aforesaid order was passed after
taking approval from Principal Commissioner of Income Tax (Respondent
No.4). Since the aforesaid order was passed, as well as the notice under
Section 148 was issued, after the expiry of three years from the end of A.Y.
2017-18, as per the amended provisions of reassessment, the authority
specified under Section 151(ii) of the Act was required to grant
approval/sanction. Accordingly, we conclude that in the present case, the
approval has been obtained from the authority specified under Section 151(i)
of the new regime instead of the authority specified under Section 151(ii) of
the new regime. Since the sanction has been obtained from the incorrect
authority, the order passed under Section 148A(d) and the notice issued
under Section 148 are unsustainable and would have to be quashed and set
aside.
10. We are supported in our view by the decision of the Hon’ble
Supreme Court in Rajeev Bansal (supra). The Hon'ble Supreme Court, in
Rajeev Bansal (supra), has in paragraph 78, clearly held that for A.Y.
2017-18 (which is also the relevant Assessment year in the present Writ
Petition) the authority specified under Section 151(i) can grant sanction only
upto 30th June 2021. Paragraph 78 of Rajeev Bansal (supra) reads thus:-
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“78. For example, the three-year time limit
for the assessment year 2017-2018 falls for
completion on March 31, 2021. It falls during the
time period of March 20, 2020 and March 31,
2021, contemplated under section 3(1) of the
Taxation and other Laws (Relaxation and
Amendment of Certain Provisions) Act, 2020.
Resultantly, the authority specified under section
151(i) of the new regime can grant sanction till
June 30, 2021.”
11. In view of the above discussion we set aside the order dated 29th
July 2022 passed under Section 148A(d) of the Act, the consequential notice
issued under Section 148 dated 29th July 2022, and the order disposing of
the Petitioner’s objections dated 17th February 2026 and all other
proceedings/orders emanating therefrom.
12. Rule is made absolute in the aforesaid terms and the Writ
Petition is also disposed of in terms thereof. However, there shall be no order
as to costs.
13. This order will be digitally signed by the Private Secretary/
Personal Assistant of this Court. All concerned will act on production by fax
or email of a digitally signed copy of this order.
[FARHAN P. DUBASH, J.] [B. P. COLABAWALLA, J.]
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SEPTEMBER 22, 2026
Darshan Patil
Signed by: Darshan Patil
Designation: PA To Honourable Judge
Date: 24/09/2026 17:59:26
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