Wrong Authority Approval Fatally Flaws AY 2019-20 Reassessment: Mumbai ITAT Voids Section 148 Notice

Case Overview

Case Name: Sachin Madhukar Fegde Vs DCIT (ITAT Mumbai)
Appeal Number: ITA 4596/MUM/2026
Date of Order: 21/08/2026
Assessment Year: 2019-20
Forum: Income Tax Appellate Tribunal, Mumbai

Background and Core Dispute

The Mumbai Bench of the Income Tax Appellate Tribunal delivered a significant ruling on 21st August 2026, nullifying a reassessment framed for Assessment Year 2019-20. The central issue before the Tribunal was whether the approval obtained from the Principal Commissioner of Income Tax (PCIT), Thane, for reopening an assessment beyond the three-year threshold was legally valid under the provisions of Section 151 of the Income Tax Act, 1961.

The case arose from a notice issued under Section 148 of the Act dated 4th April 2023, which sought to reopen the assessment of the assessee for AY 2019-20. Since the said notice was issued after the expiry of more than three years from the end of the relevant assessment year, the mandatory approval was required from a higher-ranked authority as specifically contemplated under Section 151(ii) of the Income Tax Act, 1961. However, the Assessing Officer had secured approval from the PCIT — an authority designated under Section 151(i) — which pertains only to cases where reopening is sought within three years from the end of the relevant assessment year.

Critical Issue: Was the approval obtained from the Principal Commissioner of Income Tax valid for a reassessment initiated beyond three years from the end of AY 2019-20?

The learned counsel representing the assessee raised the jurisdictional challenge as Ground No. 1 before the Tribunal. The argument was structured around the following key contentions:

  1. The notice under Section 148 dated 4th April 2023 was issued beyond the three-year period calculated from the end of AY 2019-20.
  2. Given this time gap, the applicable provision governing the required approval authority was Section 151(ii) of the Income Tax Act, 1961.
  3. Under Section 151(ii), the designated "specified authority" for granting prior approval in such cases is exclusively the Principal Chief Commissioner of Income Tax, Principal Director General, Chief Commissioner, or Director General.
  4. The Assessing Officer, however, obtained sanction from the Principal Commissioner of Income Tax-1, Thane — an authority falling under Section 151(i) and not Section 151(ii).
  5. This non-compliance with the jurisdictional precondition rendered the notice under Section 148 legally infirm, and by consequence, the reassessment framed under Section 147 read with Section 144 was also void.

In support of this position, the assessee's counsel placed reliance on Singh Bagga vs. Ward-42(2)(2), ITA No.7583/Mum/2025 dated 09.04.2026, a coordinate bench ruling directly covering this proposition.

Statutory Framework: Understanding Section 151

To appreciate the significance of the Tribunal's ruling, it is essential to understand the architecture of Section 151 as restructured under the Finance Act, 2021.

The Old vs. New Regime Under Section 151

The Hon'ble Supreme Court in Union of India v. Rajeev Bansal, (2024) 469 ITR 46 (SC) set out a comprehensive table distinguishing the specified authorities under the old and new reassessment regimes: