ITAT Quashes Reassessment Orders Due To Time-Barred Section 148 Notices And Invalid Sanction From Wrong Authority

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has quashed reassessment proceedings initiated against a foreign company after holding that the notices issued under Section 148 of the Income Tax Act were barred by limitation and suffered from jurisdictional defects. The bench of C.N. Prasad (Judicial Member) and Sanjay Awasthi (Accountant Member) noted that the original notice under Section 148 had been issued on June 30, 2021, leaving only one surviving day under the limitation framework. It further observed that the assessee had filed its reply to the notice under Section 148A(b) on July 5, 2022. Consequently, the Assessing Officer had only seven days plus the surviving one day available for issuing a fresh notice under the new regime. The appeals were filed by TBEA Shandong Luneng Taishan Cable Co. Ltd. against reassessment orders passed under Sections 147 read with 144C(13) for Assessment Years 2013-14, 2016-17 and 2017-18. The Tribunal bench comprising Judicial Member C.N. Prasad and Accountant Member Sanjay Awasthi pronounced the order on May 6, 2026. For Assessment Year 2013-14, the assessee challenged the reopening proceedings on the ground that the Assessing Officer had wrongly assumed jurisdiction under Section 147 and that the notice issued under Section 148 after passing the order under Section 148A(d) was barred by limitation. The assessee placed before the Tribunal the chronology of events beginning from the issuance of notice under the old reassessment regime and the subsequent proceedings under the new regime pursuant to the Supreme Court’s ruling in Union of India v. Ashish Aggarwal. The assessee argued that under the Supreme Court ruling in Union of India v. Rajeev Bansal, the limitation period for issuing notice under Section 148 expired on July 12, 2022, whereas the impugned notice was issued only on July 30, 2022, rendering the reopening proceedings invalid. Buy Now: Income Tax Judgments E-Compilation : April 2026 After examining the limitation computation, the Tribunal held that the time available to the Assessing Officer expired on July 6, 2022. However, the fresh notice under Section 148 had been issued later, making the reassessment proceedings time-barred. The ITAT therefore ruled that the reassessment framed pursuant to the notice issued under Section 148 for Assessment Year 2013-14 was “bad in law and void-ab-initio” and accordingly quashed the assessment. With respect to Assessment Years 2016-17 and 2017-18, the assessee argued that since the notices under Section 148 were issued beyond three years from the end of the relevant assessment years, sanction ought to have been obtained from the Principal Chief Commissioner or Principal Commissioner in terms of Section 151(ii) of the Act. However, the approval in the present case had been granted by the Commissioner of Income Tax (International Taxation-3), New Delhi. The Tribunal accepted the contention and observed that when reassessment proceedings are initiated beyond three years, the Assessing Officer is mandatorily required to obtain approval from the competent higher authority prescribed under Section 151(ii). Since approval had been obtained from the Commissioner instead of the Principal Chief Commissioner or Principal Commissioner, the sanction itself was invalid. The bench further relied on the decision in Bhushan Gupta v. ITO and held that notices issued under Section 148 without approval from the proper authority are legally unsustainable. Accordingly, the Tribunal quashed the reassessment orders for Assessment Years 2016-17 and 2017-18 as well, holding them to be “bad in law and void-ab-initio.” Since the appeals were allowed on legal grounds, the Tribunal did not adjudicate the issues raised on merits and left them open. Case Details Case Title: TBEA Shandong Luneng Taishan Cable Co. Ltd. Versus ACIT Citation: JURISHOUR-1139-ITA-2026(DEL) Case No.: ITA No.2083, 2084 & 2073/Del/2024 Date: 06.05.2026 Counsel For Appellant: Rasesh Shah, CA (VC) Counsel For Respondent: M.S. Nethrapal, CIT DR Click Here To Read Order Read More: Custodial Interrogation Necessary In Rs. 35 Crore Fake ITC Fraud Case: Punjab & Haryana High Court Denies Anticipatory Bail

ITAT Quashes Reassessment Orders Due To Time-Barred Section 148 Notices And Invalid Sanction From Wrong Authority

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