Introduction
The Income Tax Appellate Tribunal (ITAT), Mumbai ‘B’ Bench, delivered a pivotal ruling on 19 June 2026 in ITO, Ward – 19(2)(4) v. Neelesh Hasmukh Doshi HUF (ITA Nos. 8644 & 8645/Mum/2025). The case concerns the validity of reassessment proceedings initiated under Section 148 of the Income Tax Act, 1961 for Assessment Years (AY) 2016-17 and 2018-19. The core legal question was whether approval under Section 151(ii) of the Act—mandatory for notices issued beyond three years from the end of the relevant assessment year—must be obtained from the Principal Chief Commissioner of Income Tax (PCCIT) or whether approval from the Principal Commissioner of Income Tax (PCIT) suffices. The Tribunal, relying on binding precedents of the jurisdictional Bombay High Court and the Supreme Court’s dismissal of the Revenue’s SLP, held that the failure to secure the requisite approval from the PCCIT rendered the reassessment notices void ab initio. This commentary provides a deep analysis of the facts, legal reasoning, and implications of this order.
Facts of the Case
The Revenue filed two appeals challenging the orders of the Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre, Delhi, dated 30 October 2025. The Assessing Officer (AO) had issued notices under Section 148 of the Act for AY 2016-17 and AY 2018-19 on 27 July 2022 and 28 April 2022, respectively. For both years, the reassessment was initiated beyond the three-year period from the end of the relevant assessment year (which ended on 31 March 2017 for AY 2016-17 and 31 March 2019 for AY 2018-19). The AO obtained approval for these notices under Section 151(ii) from the Principal Commissioner of Income Tax – 19, Mumbai, not from the Principal Chief Commissioner of Income Tax. The assessee challenged the validity of the approval before the CIT(A), who allowed the appeal by holding that the mandatory sanction under Section 151(ii) was not obtained from the specified authority. The Revenue appealed to the ITAT.
During the hearing, the assessee’s counsel argued that for assessments reopened beyond three years, Section 151(ii) mandates approval only by the PCCIT. Reliance was placed on the Bombay High Court decisions in Mrs. Chitra Supekar v. ITO (2023) 453 ITR 530 (Bom.) and Cipla Pharma and Life Sciences Ltd. v. DCIT (2024) 164 taxmann.com 663 (Bom.), as well as the Supreme Court’s dismissal of the Revenue’s SLP in ITO v. Nikhil Chandrakant Dharia (2024) 164 taxmann.com 41 (SC). The Revenue, while conceding the position for AY 2016-17, argued that for AY 2018-19 the notice was within limitation and placed reliance on a Coordinate Bench decision in Albert Joseph Rozario v. ITO (ITA No.1168/Mum/2025 dated 22 July 2025).
Legal Reasoning of the Tribunal
The Tribunal’s reasoning forms the heart of this commentary. The Bench, comprising Judicial Member Challa Nagendra Prasad and Accountant Member Makarand Vasant Mahadeokar, meticulously examined the interplay between Sections 148, 148A(d), and 151(ii) of the Act.
1. The Statutory Framework: Section 151(ii)
The Tribunal first clarified the applicable law. Under Section 151, where a notice under Section 148 is issued after the expiry of three years from the end of the relevant assessment year, the AO must obtain the prior approval of the Principal Chief Commissioner of Income Tax (or the Chief Commissioner, as applicable). This requirement is mandatory and cannot be diluted. In the present case, for both AYs 2016-17 and 2018-19, the AO obtained approval from the Principal Commissioner of Income Tax, a post inferior in hierarchy to the Principal Chief Commissioner. The Tribunal noted that the assessee had placed on record (page 10 of the compilation) the notices and the order under Section 148A(d), which clearly revealed the erroneous approval.
2. Binding Precedents from the Jurisdictional High Court
The Tribunal drew heavily on the Bombay High Court’s decision in Mrs. Chitra Supekar (supra). In that case, the High Court held that where the AO passed an order under Section 148A(d) after the expiry of three years from the end of the relevant assessment year without obtaining approval from the PCCIT as required under Section 151(ii), the reassessment proceedings would be invalidated. The same principle was reiterated in Cipla Pharma and Life Sciences Ltd. (supra), where the Bombay High Court struck down reassessment notices for lack of proper sanction. The Tribunal also took judicial notice of the Supreme Court’s dismissal of the Revenue’s SLP in Nikhil Chandrakant Dharia (supra), which affirmed the correctness of the Bombay High Court’s stance. These decisions are binding on the ITAT, Mumbai Bench.
3. Distinction of the Revenue’s Argument for AY 2018-19
The Revenue’s contention that for AY 2018-19 the notice was issued within the limitation period was cursorily examined. The Tribunal did not accept this argument because the notice date (28 April 2022) was beyond three years from the end of the assessment year (31 March 2019). The period of three years ended on 31 March 2022; the notice issued on 28 April 2022 clearly fell outside this window. Consequently, the requirement of approval from the PCCIT under Section 151(ii) was triggered. The Revenue’s reliance on the Coordinate Bench decision in Albert Joseph Rozario was not discussed in detail by the Tribunal, as the ratio of the Bombay High Court decisions prevailed.
4. Effect of Invalid Approval: Void ab Initio
The Tribunal concluded that the lack of proper sanction from the specified authority rendered the entire reassessment proceedings void ab initio. This is a strong legal consequence: the notices under Section 148, the order under Section 148A(d), and any consequent additions or assessments are treated as if they never existed in law. The CIT(A) had correctly held the initiation to be without authority of law, and the Tribunal upheld that finding. Once the proceedings were declared void, all other grounds raised by the Revenue—including merits of the additions—became academic and were left open. This approach aligns with the principle that jurisdictional defects strike at the root of the reassessment power, making it unnecessary to adjudicate substantive issues.
5. Precedential Value and Consistency
The Tribunal’s order reinforces the strict compliance required under Section 151(ii) for reassessments beyond three years. It also demonstrates judicial consistency by following the jurisdictional High Court and the Supreme Court’s implied approval. The Revenue’s attempt to salvage the proceedings by arguing limitation for one year failed because the factual timeline was clear. The order dismisses both appeals on this legal ground, leaving the Revenue without a remedy unless a higher forum reverses the settled position.
Conclusion
The ITAT dismissed both appeals of the Revenue, affirming the CIT(A)’s order that the reassessment notices for AY 2016-17 and AY 2018-19 were invalid for want of proper approval under Section 151(ii). The Tribunal held that the AO must obtain approval from the Principal Chief Commissioner when issuing notices beyond three years from the end of the relevant assessment year. Failure to do so makes the proceedings void ab initio. The decision underscores the critical importance of adhering to procedural safeguards in tax reassessments, especially when time limits are involved. Taxpayers and practitioners should note that any deviation from the mandatory sanctioning authority can scuttle the entire reassessment process, as confirmed by the Bombay High Court and the ITAT.