ITAT Delhi on Invalid Reopening Due to Wrong Approval Under Section 151.

Headnote:

The ITAT Delhi quashed reassessment proceedings initiated under Section 148A(d) for AYs 2017–18 and 2018–19 after holding that the Assessing Officer had obtained approval from the wrong sanctioning authority under Section 151 of the Income Tax Act. Since more than three years had elapsed from the end of the relevant assessment years, approval was required from the Principal Chief Commissioner/Director General, but the AO incorrectly sought sanction from the PCIT. The Tribunal held that this statutory defect rendered the entire proceedings invalid. As a result, Revenue’s appeals were dismissed, and the assessee’s cross-objection was allowed.

Background:

• Revenue filed appeals for AYs 2017–18 and 2018–19, with a 14-day delay condoned by the Tribunal.

• Reassessment notices were issued under Section 148A(d):

– 20.07.2022 for AY 2017–18

– 07.04.2022 for AY 2018–19

• For both years, more than three years had passed from the end of the assessment years.

• Under Section 151(ii), approval for such reopenings must be taken from the Principal Chief Commissioner/Director General, but the AO obtained it from the PCIT, who was not the competent authority.

• The assessee challenged the legality of the approval; Revenue failed to controvert the factual error.

Court’s Observations:

• Section 151 specifies a strict hierarchy of authorities competent to approve reopening:

– Section 151(i): PCIT/CIT if within 3 years

– Section 151(ii): PCCIT/PDGIT/CCIT/DGIT if beyond 3 years

• Since the case fell under Section 151(ii), the approval obtained from the PCIT was invalid.

• The Tribunal relied on the Delhi High Court ruling in Communist Party of India (Marxist) v. ITD (2025), which held that incorrect sanction vitiates the entire reopening, regardless of compliance with other procedural steps.

• Revenue did not dispute the defective approval, and hence the reassessment proceedings could not survive.

• Consequently, the notices under Section 148A(d) and all consequential orders were quashed.

Legal Provisions Discussed:

• Section 147, Income Tax Act, 1961 – Income escaping assessment.

• Section 148A(d), Income Tax Act, 1961 – Order after considering assessee’s reply.

• Section 151, Income Tax Act, 1961 – Sanction for issue of notice; specified authority.

• Section 270A, Income Tax Act, 1961 – Penalty for under-reporting.

• Relevant Delhi High Court precedents, including:

– Communist Party of India (Marxist) v. Income Tax Department (2025)

– Paramount Intercontinental (P) Ltd. v. ACIT

– Renaissance Jewelry (P) Ltd. v. ACIT

Citation: Order dated 25 November 2025 (ITAT Delhi)

Case: ACIT, New Delhi v. Sh. Pradeep Patil

Court: Income Tax Appellate Tribunal, Delhi Bench ‘A’

Coram: Shri Satbeer Singh Godara (Judicial Member) & Shri S. Rifaur Rahman (Accountant Member)

Date of Decision: 25 November 2025

Appeal Nos.: ITA No. 4318/Del/2024, C.O. No. 25/Del/2025, ITA No. 4320/Del/2024