AKSHAR DEVELOPERSversusASST. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 4 THANE AND ORS

2026:BHC-AS:39321-DB


                                                                     7-WP-3474-2026.doc



                       IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                               CIVIL APPELLATE JURISDICTION

                                 WRIT PETITION NO. 3474 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 2016-17.
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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 2016-17 on 20 th December 2016,

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. four years after the end of A.Y.2016-17. 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 prior 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, when more than three years have

elapsed from the end of A.Y. 2016-17. 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. 2016-17. 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, 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 30th 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.2016-17. 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.              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 for A.Y. 2017-18, drawn an illustration in

paragraph 78 of it's order, wherein it is categorically held that the authority

specified under Section 151(i) can grant sanction only up to 3oth June 2021.

Paragraph 78 of Rajeev Bansal (supra) reads thus:-


                   “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.”


10.             In the facts of the present case, the period of three years from the

end of A.Y. 2016-17 fell for completion on 31st March 2020. Since the expiry

date fell during the time period between 20th March 2020 and 31st March

2021, as contemplated under Section 3(1) of Taxation and Other Laws

(Relaxation and Amendment of Certain Provisions) Act, 2020 (for short

"TOLA"), the authority specified under Section 151(i) of the new regime could

have granted sanction only till 30th June 2021. On perusal of the order, dated

29th July 2022, passed under Section 148A(d) of the Act, we find that the

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aforesaid order was passed after taking approval from Respondent No.4

(Principal Commissioner of Income Tax). Since the aforesaid order was

passed after the expiry of three years from the end of A.Y. 2016-17, as per the

substituted provisions of reassessment, the authority specified under Section

151(ii) of the Act was required to grant approval. 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.



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, 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.

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                      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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                      Darshan Patil

Signed by: Darshan Patil
Designation: PA To Honourable Judge
Date: 28/09/2026 17:49:17