[Cites 17, Cited by 0]
Bombay High Court
Anil Gupta Private Family Trust vs The Income Tax Officer Ward 25 2 1 Mumbai on 23 March, 2026
Author: B. P. Colabawalla
Bench: B. P. Colabawalla
2026:BHC-OS:7433-DB
sr.9-wp-928-2026.doc
TRUSHA IN THE HIGH COURT OF JUDICATURE AT BOMBAY
TUSHAR
MOHITE ORDINARY ORIGINAL CIVIL JURISDICTION
Digitally signed by
TRUSHA TUSHAR
MOHITE
Date: 2026.03.27
13:03:35 +0530
Writ Petition NO. 928 OF 2026
Anil Gupta Pvt. Family Trust .. Petitioner
Versus
The Income Tax Officer, Ward-25(2)(1),
Mumbai & Ors. .. Respondents
Adv. Samarvir Singh (thr. V.C) a/w Adv. Naman Tandon, Adv. Anshul,
Adv. Shubham Yadav i/b Tejveer Singh for the Petitioner.
Adv. Ravi Rattesar for the Respondents/Revenue.
CORAM: B. P. COLABAWALLA &
FIRDOSH P. POONIWALLA, JJ.
DATE: MARCH 23, 2026
P. C.
1. Rule. Respondents waive service. With the consent of the parties
Rule made returnable forthwith and heard finally.
2. The present Writ Petition inter-alia challenges the notice dated
30.07.2022 issued under Section 148 of the Income Tax Act, 1961 (for short
the "Act") for the Assessment Year 2016-17.
3. Among several jurisdictional grounds challenging the re-opening
MARCH 23, 2026
Mansi shelke
sr.9-wp-928-2026.doc
of assessment for the relevant Assessment Year, the Petitioner has, inter-alia,
contended that the order passed under Section 148A(d) is bad in law because
Respondent No.1 has not obtained appropriate prior approval/sanction
mandated under Section 151 and has sought relief in terms of prayer clause
(a) of the Writ Petition which reads as under:
"(a) that this Hon'ble Court may be pleased to issue a writ of
certiorari / mandamus or any other appropriate writ, order or
direction in the nature of certiorari / mandamus, under Article 226
of the Constitution of India, quashing the Impugned Order dated
30.07.2022 (Exhibit E) passed under Section 148A(d) of the Act,
Impugned Notice dated 30.07.2022 issued under Section 148 of
the Act and the impugned reassessment proceedings for AY 2016-
17 as being wholly without jurisdiction, illegal and arbitrary."
4. Initially, Respondent No.1 had issued notice under Section 148
(under the erstwhile law of re-assessment) on 22.06.2021 for Assessment
Year 2016-17. Subsequently, in consequence of the judgment of the Hon'ble
Supreme Court in the case of Union of India vs. Ashish Agarwal (2022) 444
ITR 1 (SC), a communication dated 26.05.2022, was sent to the Petitioner
intimating that the aforesaid notice issued under Section 148 of the Act
(under old regime) would be treated as a show-cause notice issued in terms of
Section 148A(b) of the Act (under new regime introduced by the Finance Act,
2021 w.e.f. 01.04.2021). It is claimed by the Petitioner that it responded to
this notice vide its letter dated 10.06.2022. Thereafter, Respondent No.1
passed an order under Section 148A(d) on 30.07.2022 along with the notice
dated 30.07.2022 issued under Section 148 of the Act. Undisputedly, the
MARCH 23, 2026
Mansi shelke
sr.9-wp-928-2026.doc
above referred order under Section 148A(d) and notice under Section 148
were passed/issued in pursuance of the provisions of the substituted law of
re-assessment as amended by the Finance Act, 2021 and which came into
force from 01.04.2021.
5. The Petitioner has contended that in the present case, the order
under Section 148A(d) dated 30.07.2022 was passed beyond three years from
the end of the relevant Assessment Year 2016-17. Consequently, according to
the provisions of Section 151(ii), 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 General (PDGIT), or where there is no PCCIT or PDGIT,
the Chief Commissioner (CCIT) or the Director General (DGIT). However, in
paragraph 8 of the order dated 30.07.2022 passed under Section 148A(d),
Respondent No.1 has stated that before passing the said order, prior approval
of Respondent No.4 the Principal Commissioner of Income Tax-17, Mumbai,
was obtained and the said order was passed thereafter. This aspect remains
uncontroverted by the Respondents.
6. In these facts, the limited point to be examined is whether the
order dated 30.07.2022 passed under Section 148A(d) for the Assessment
MARCH 23, 2026
Mansi shelke
sr.9-wp-928-2026.doc
Year 2016-17 after obtaining approval of Respondent No.4 [i.e. the PCIT-17,
Mumbai], was in accordance with the provisions of Section 151.
7. The Petitioner has drawn our attention to 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) and we deem it appropriate to refer to the said judgment where
the Hon'ble Supreme Court has, while dealing with the issue of approval from
the specified authority in terms of Section 151 of the Act, made the following
observations:
"iii. Sanction of the specified authority
73. Section 151 imposes a check upon the power of the Revenue
to reopen assessments. The provision imposes a responsibility on the
Revenue to ensure that it obtains the sanction of the specified authority
before issuing a notice under section 148. The purpose behind this
procedural check is to save the assesses from harassment resulting from the
mechanical reopening of assessments Sri krishna (P.) Ltd. v. ITO [1996] 87
Τaxman 315/221 ITR 538 (SC)/[1996] 9 SCC 534. A table representing the
prescription under the old and new regime is set out below:
Regime Time limits Specified authority
Section 151 (2) of the old regime Before expiry of four years from the Joint Commissioner
end of the relevant assessment year
Section (1) of the old regime After expiry of four years from the Principal Chief Commissioner or
end of the relevant assessment year Chief Commissioner or Principal
Commissioner or Commissioner
Section 151 (i) of the new regime Three years or less than three years Principal Commissioner or
from the end of the relevant Principal Director or Commissioner
assessment year or Director
Section 151 (ii) of the new regime More than three years have elapsed Principal Chief Commissioner or
from the end of the relevant Principal Director General or Chief
assessment year Commissioner or Director General
MARCH 23, 2026
Mansi shelke
sr.9-wp-928-2026.doc
74. The above table indicates that the specified authority is
directly co-related to the time when the notice is issued. This plays out as
follows under the old regime:
(i) If income escaping assessment was less than Rupees one lakh: (a) a
reassessment notice could be issued under section 148 within four years
after obtaining the approval of the Joint Commissioner; and (b) no notice
could be issued after the expiry of four years; and
(ii) If income escaping was more than Rupees one lakh: (a) a
reassessment notice could be issued within four years after obtaining the
approval of the Joint Commissioner; and (b) after four years but within
six years after obtaining the approval of the Principal Chief
Commissioner or Chief Commissioner or Principal Commissioner or
Commissioner.
75. After 1 April 2021, the new regime has specified different
authorities for granting sanctions under section 151. The new regime is
beneficial to the assessee because it specifies a higher level of authority
for the grant of sanctions in comparison to the old regime. Therefore, in
terms of Ashish Agarwal (supra), after 1 April 2021, the prior approval
must be obtained from the appropriate authorities specified under section
151 of the new regime. The effect of Section 151 of the new regime is
thus:
(i) If income escaping assessment is less than Rupees fifty lakhs: (a) a
reassessment notice could be issued within three years after obtaining
the prior approval of the Principal Commissioner, or Principal Director
or Commissioner or Director; and (b) no notice could be issued after the
expiry of three years; and
(ii) If income escaping assessment is more than Rupees fifty lakhs: (a) a
reassessment notice could be issued within three years after obtaining the
prior approval of the Principal Commissioner, or Principal Director or
Commissioner or Director; and (b) after three years after obtaining the
prior approval of the Principal Chief Commissioner or Principal Director
General or Chief Commissioner or Director General.
76. Grant of sanction by the appropriate authority is a
precondition for the assessing officer to assume jurisdiction under
section 148 to issue a reassessment notice. Section 151 of the new regime
does not prescribe a time limit within which a specified authority has to
grant sanction. Rather, it links up the time limits with the jurisdiction of
the authority to grant sanction. Section 151(ii) of the new regime
prescribes a higher level of authority if more than three years have
elapsed from the end of the relevant assessment year. Thus, non-
compliance by the assessing officer with the strict time limits prescribed
MARCH 23, 2026
Mansi shelke
sr.9-wp-928-2026.doc
under section 151 affects their jurisdiction to issue a notice under Section
148.
77. Parliament enacted TOLA to ensure that the interests of the
Revenue are not defeated because the assessing officer could not comply
with the pre conditions due to the difficulties that arose during the
COVID-19 pandemic. Section 3(1) of TOLA relaxes the time limit for
compliance with actions that fall for completion from 20th March 2020 to
31st March 2021. TOLA will accordingly extend the time limit for the
grant of sanction by the authority specified under section 151. The test to
determine whether TOLA will apply to Section 151 of the new regime is
this: if the time limit of three years from the end of an assessment year
falls between 20th March 2020 and 31st March 2021, then the specified
authority under section 151(i) has an extended time till 30 th June 2021 to
grant approval. In the case of Section 151 of the old regime, the test is: if
the time limit of four years from the end of an assessment year falls
between 20th March 2020 and 31st March 2021, then the specified
authority under section 151(2) has time till 31st March 2021 to grant
approval. The time limit for Section 151 of the old regime expires on 31 st
March 2021 because the new regime comes into effect on 1st April 2021.
78. For example, the three year time limit for assessment year
2017-2018 falls for completion on 31st March 2021. It falls during the
time period of 20th March 2020 and 31st March 2021, contemplated under
section 3(1) of TOLA. Resultantly, the authority specified under section
151(i) of the new regime can grant sanction till 30th June 2021.
79. Under Finance Act 2021, the assessing officer was required
to obtain prior approval or sanction of the specified authorities at four
stages:
a. Section 148A(a)- to conduct any enquiry, if required, with
respect to the information which suggests that the income
chargeable to tax has escaped assessment;
b. Section 148A(b)- to provide an opportunity of hearing to the
assessee by serving upon them a show cause notice as to why a
notice under section 148 should not be issued based on the
information that suggests that income chargeable to tax has
escaped assessment. It must be noted that this requirement has
been deleted by the Finance Act 2022;
c. Section 148A(d)- to pass an order deciding whether or not it is a
MARCH 23, 2026
Mansi shelke
sr.9-wp-928-2026.doc
fit case for issuing a notice under section 148; and
d. Section 148-to issue a reassessment notice.
80. In AshishAgarwal (supra), this Court directed that Section
148 notices which were challenged before various High Courts "shall be
deemed to have been issued under section 148-A of the Income-tax Act as
substituted by the Finance Act, 2021 and construed or treated to be show-
cause notices in terms of Section 148-A(b)." Further, this Court dispensed
with the requirement of conducting any enquiry with the prior approval of
the specified authority under section 148A(a). Under Section 148A(b), an
assessing officer was required to obtain prior approval from the specified
authority before issuing a show cause notice. When this Court deemed the
Section 148 notices under the old regime as Section 148A(b) notices
under the new regime, it impliedly waived the requirement of obtaining
prior approval from the specified authorities under section 151 for Section
148A(b). It is well established that this Court while exercising its
jurisdiction under Article 142, is not bound by the procedural
requirements of law High Court Bar Association v. State of UP [2024]
160 taxmann.com 32/299 Taxman 21 (SC)/[2024] 6 SCC 267,
81. This Court in Ashish Agarwal (supra) directed the assessing
officers to "pass orders in terms of Section 148-A(d) in respect of each of
the assesses concerned." Further, it directed the assessing officers to issue
a notice under Section 148 of the new regime "after following the
procedure as required under section 148-A." Although this Court waived
off the requirement of obtaining prior approval under section 148A(a)
and Section 148A(b), it did not waive the requirement for Section
148A(d) and Section 148. Therefore, the assessing officer was required to
obtain prior approval of the specified authority according to Section 151
of the new regime before passing an order under section 148A(d) or
issuing a notice under section 148. These notices ought to have been
issued following the time limits specified under section 151 of the new
regime read with TOLA, where applicable."
8. On a bare reading of the above extract in the case of Rajeev
Bansal (supra), we find that the Hon'ble Supreme Court had clarified as
under:
MARCH 23, 2026
Mansi shelke
sr.9-wp-928-2026.doc
8.1 Under the substituted provisions of re-assessment as introduced
by the Finance Act, 2021, the Assessing Officer is required to obtain
prior approval or sanction of the 'Specified Authority' at four stages:
(i) at the first stage under Section 148A(a); (ii) at the second stage
under Section 148A(b); (iii) at the third stage under Section 148A(d);
and (iv) at the fourth stage under Section 148. In the case of Ashish
Agarwal (supra) the Hon'ble Supreme Court waived off the
requirement of obtaining prior approval under Section 148A(a) and
Section 148A(b) of the Act only. Therefore, the Assessing Officer was
required to obtain prior approval of the 'Specified Authority'
according to Section 151 of the new regime before passing an order
under Section 148A(d) or for issuing a notice under Section 148.
8.2 Under the new regime, if income escaping assessment is
more than Rupees 50 lakhs, a reassessment notice could be issued
after the expiry of three years from the end of the relevant assessment
year only after obtaining the prior approval of the Principal Chief
Commissioner or Principal Director General or Chief Commissioner
or Director General.
8.3 Section 151(ii) of the substituted provisions prescribes a
higher level of authority if more than three years have elapsed from
MARCH 23, 2026
Mansi shelke
sr.9-wp-928-2026.doc
the end of the relevant assessment year. Thus, non-compliance with
the provisions of Section 151 vitiates the jurisdiction of the Assessing
Officer to issue a notice under Section 148.
8.4 Grant of sanction by the appropriate authority is a
precondition for the assessing officer to assume jurisdiction under
Section 148 to issue a reassessment notice.
9. In the present case, the period of three years from the end of the
Assessment Year 2016-17 fell for completion on 31 st March 2020. Since the
expiry date fell during the time period of 20 th March 2020 and 31st March
2021 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 till 30 th June 2021. On a perusal of the order dated
30.07.2022, passed under Section 148A(d) of the Act, we find that the
aforesaid order was passed after taking approval from the Principal
Commissioner of Income Tax (Respondent No.4). Since the aforesaid order
was passed after the expiry of three years from the end of the Assessment
Year 2016-17, as per the substituted provisions of re-assessment, the
authority specified under Section 151(ii) of the Act (i.e. Principal Chief
Commissioner or Chief Commissioner) was required to grant approval.
MARCH 23, 2026
Mansi shelke
sr.9-wp-928-2026.doc
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.
10. The Hon'ble Supreme Court in the above case has drawn an
illustration in paragraph 78 of it's order in the context of Assessment Year
2017-18, wherein it is categorically held that the authority specified under
Section 151(i) can accord sanction only upto 30.06.2021. This illustration
makes it absolutely clear that when the period of three years from end of
relevant Assessment Year expired between 20.03.2020 and 31.03.2021, the
extension by virtue of TOLA was upto 30.06.2021 and not beyond. Thus, it
can be said that the period of three years from the end of the relevant
Assessment Year (here AY 2016-17) expired on 30.06.2021, whereas
Respondent No.1, despite passing the order on 30.07.2022 in repsect of
Assessment Year 2016-17, has obtained approval of Respondent No.4 who is
not the authority as prescribed under Section 151(ii).
11. Non-compliance by Respondent No.1 with the provisions
contained in Section 151(ii) vitiates the jurisdiction of Respondent No. 1 to
issue a notice under Section 148 of the Act.
MARCH 23, 2026
Mansi shelke
sr.9-wp-928-2026.doc
12. We are clearly of the view that the present matter stands covered
by the decision of Hon'ble Supreme Court in the case of Union of India vs.
Rajeev Bansal (supra). We accordingly hold that the order dated 30.07.2022
passed under Section 148A(d) of the Act and the consequential notice issued
under Section 148 also dated 30.07.2022, are bad in law for being violative of
the provisions of Section 151(ii) of the Act. Hence they are required to be
quashed and set aside.
13. We, accordingly, set aside the impugned order dated 30.07.2022
passed under Section 148A(d), the Notice issued under Section 148 also dated
30.07.2022, and all other proceedings/orders emanating therefrom, and
allow the Writ Petition in terms of Prayer Clause (a) of the Petition.
14. Rule is made absolute in the aforesaid terms and the Writ
Petition is also disposed of in terms thereof. No order as to costs.
15. 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.
[FIRDOSH P. POONIWALLA, J.] [B. P. COLABAWALLA, J.]
MARCH 23, 2026
Mansi shelke
