My client has a section 148 notice for AY 2018-19 saying he sold bitcoin and did not file a return. He was a student and made a profit of Rs 48,000. Is there anything in the notice itself?
There may well be. The Mumbai Bench held that where AY 2018-19 was reopened by a notice dated 19 April 2022, that is beyond three years from the end of the assessment year, so the sanction under s.151 had to come from the Principal Chief Commissioner or Chief Commissioner; approval taken from the Principal Commissioner was invalid, the notice under s.148 was invalid, and everything that followed including the assessment order was void ab initio. On the merits it also held that the addition of Rs 11,28,013 could not stand where the assessee had produced bank statements showing a purchase at Rs 4,10,000 and a sale at Rs 4,58,594 and the Assessing Officer had made the addition on information alone without bringing any adverse material on record or making any enquiry.
Decided by the ITAT (Shri Pawan Singh, Judicial Member (SMC)) on 2025-09-26, reported as ITA No. 4416/MUM/2025 (Income Tax Appellate Tribunal, Mumbai, 'SMC' Bench); assessment year 2018-19; instituted 7 July 2025, heard 10 September 2025, pronounced 26 September 2025. It bears on section 147, section 148, section 148A, section 151, section 144B of the Income Tax Act 1961, in Reassessment & Reopening, Crypto & Virtual Digital Assets and Evidence & Burden of Proof matters.
There is a large tranche of reassessments for AY 2017-18 and AY 2018-19 built on exchange data about non-filers who dealt in bitcoin, and this decision shows that the strongest points in them are often not about crypto at all. The sanction point is jurisdictional and disposes of the notice without any argument on the facts. It is also contested: the Departmental Representative argued that the Bombay High Court decision relied on, Vodafone Idea Ltd v DCIT, rests on Siemens Financial Services (P) Ltd v DCIT, which he said the Supreme Court set aside in Union of India v Rajiv Bansal, and the Bench rejected that, holding that Siemens had not been completely set aside. Whether the s.151 sanction point survives Rajiv Bansal is genuinely disputed and a practitioner must expect it to be argued. The merits holding is worth as much in practice: these additions are routinely made on the gross figure reported by an exchange rather than on any computed gain, and where the assessee produces a bank trail showing what he actually paid and received, the Assessing Officer must do more than repeat the information he started with. Note what this decision is not: it says nothing about the head of income for pre-regime crypto, and it has no bearing on s.115BBH, which had no application to AY 2018-19.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee's case for AY 2018-19 was reopened by a notice under s.148 dated 19 April 2022, on inside information that he had dealt in bitcoin during the financial year and had filed no return. He was a student in that year. He said he had purchased bitcoin for Rs 4,10,000 and sold it for Rs 4,58,594, making a profit of Rs 48,594, which he declared in the return filed in response to the s.148 notice, and that he had not filed a return earlier because his income was below the taxable limit. The Assessing Officer nevertheless added Rs 11,28,013 as unexplained income under the head income from other sources, on the information available with him, without sharing that information with the assessee and without any independent investigation; the assessee had furnished his bank statement. The CIT(A)/NFAC confirmed the addition by order dated 21 May 2025. Before the Tribunal the assessee raised an additional ground, by application dated 10 September 2025, that the reopening was beyond three years from the end of the assessment year so that approval under s.151 had to be that of the Principal Chief Commissioner or Chief Commissioner, whereas the Assessing Officer had obtained the approval of the Principal Commissioner of Income-tax, Mumbai-17.
The appeal was allowed. Since AY 2018-19 was reopened beyond three years from the end of the relevant assessment year, s.151 required the prior approval of the Principal Chief Commissioner or Chief Commissioner; the approval obtained from the Principal Commissioner was not valid, the notice under s.148 was therefore invalid, and the subsequent action including the assessment order was void ab initio (para 7). Independently, on the merits, the addition could not be sustained where the assessee had shown by his bank statement a purchase of bitcoin at Rs 4,10,000 and a sale at Rs 4,58,594 yielding a profit of Rs 48,594, and the Assessing Officer had made the addition on the information available with him without bringing any adverse material on record and without carrying out any investigation or enquiry (para 8).
On the additional ground, the Bench admitted it as purely legal, requiring no new facts, the relevant material being on record. It found it undisputed that the notice under s.148 was dated 19 April 2022 for AY 2018-19, that this was beyond three years from the end of the relevant assessment year, and that s.151 accordingly required approval of the Principal Chief Commissioner or Chief Commissioner rather than the Principal Commissioner, following the jurisdictional Bombay High Court in Vodafone Idea Ltd v DCIT. It rejected the Departmental Representative's submission that Vodafone Idea was undermined because the decision it followed, Siemens Financial Services (P) Ltd v DCIT, 457 ITR 675, had been set aside by the Supreme Court in Union of India v Rajiv Bansal decided 3 October 2024, holding that it had not been completely set aside; the assessee's counsel had taken the Bench to the questions of law framed at para 18 and the findings at sub-paras (d) and (e) of para 114 of Rajiv Bansal, and to para 115, in support of that reading. On the merits, the Bench held that the Assessing Officer had brought no adverse material and had made no enquiry before making the addition, so the addition failed independently of the jurisdictional defect.
The AO without bringing any adverse material, has made addition on sale of Bitcoin on the basis of information available with him without bringing any adverse material on record. No investigation or enquiry was carried out by him before making the addition.
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Handle my notice → Ask a CA on WhatsAppThere may well be. The Mumbai Bench held that where AY 2018-19 was reopened by a notice dated 19 April 2022, that is beyond three years from the end of the assessment year, so the sanction under s.151 had to come from the Principal Chief Commissioner or Chief Commissioner; approval taken from the Principal Commissioner was invalid, the notice under s.148 was invalid, and everything that followed including the assessment order was void ab initio. On the merits it also held that the addition of Rs 11,28,013 could not stand where the assessee had produced bank statements showing a purchase at Rs 4,10,000 and a sale at Rs 4,58,594 and the Assessing Officer had made the addition on information alone without bringing any adverse material on record or making any enquiry. This was decided by the ITAT (Shri Pawan Singh, Judicial Member (SMC)) and bears on section 147, section 148, section 148A, section 151, section 144B of the Income Tax Act 1961. It is reported as ITA No. 4416/MUM/2025 (Income Tax Appellate Tribunal, Mumbai, 'SMC' Bench); assessment year 2018-19; instituted 7 July 2025, heard 10 September 2025, pronounced 26 September 2025. There is a large tranche of reassessments for AY 2017-18 and AY 2018-19 built on exchange data about non-filers who dealt in bitcoin, and this decision shows that the strongest points in them are often not about crypto at all. The sanction point is jurisdictional and disposes of the notice without any argument on the facts. It is also contested: the Departmental Representative argued that the Bombay High Court decision relied on, Vodafone Idea Ltd v DCIT, rests on Siemens Financial Services (P) Ltd v DCIT, which he said the Supreme Court set aside in Union of India v Rajiv Bansal, and the Bench rejected that, holding that Siemens had not been completely set aside. Whether the s.151 sanction point survives Rajiv Bansal is genuinely disputed and a practitioner must expect it to be argued. The merits holding is worth as much in practice: these additions are routinely made on the gross figure reported by an exchange rather than on any computed gain, and where the assessee produces a bank trail showing what he actually paid and received, the Assessing Officer must do more than repeat the information he started with. Note what this decision is not: it says nothing about the head of income for pre-regime crypto, and it has no bearing on s.115BBH, which had no application to AY 2018-19. If it applies to you, the first step is this: Get the s.148 notice and the sanction on record and check WHO approved it and on what date, then check whether the notice issued more than three years after the end of the relevant assessment year — for AY 2018-19 that means after 31 March 2022.
The assessee's case for AY 2018-19 was reopened by a notice under s.148 dated 19 April 2022, on inside information that he had dealt in bitcoin during the financial year and had filed no return. He was a student in that year. He said he had purchased bitcoin for Rs 4,10,000 and sold it for Rs 4,58,594, making a profit of Rs 48,594, which he declared in the return filed in response to the s.148 notice, and that he had not filed a return earlier because his income was below the taxable limit. The Assessing Officer nevertheless added Rs 11,28,013 as unexplained income under the head income from other sources, on the information available with him, without sharing that information with the assessee and without any independent investigation; the assessee had furnished his bank statement. The CIT(A)/NFAC confirmed the addition by order dated 21 May 2025. Before the Tribunal the assessee raised an additional ground, by application dated 10 September 2025, that the reopening was beyond three years from the end of the assessment year so that approval under s.151 had to be that of the Principal Chief Commissioner or Chief Commissioner, whereas the Assessing Officer had obtained the approval of the Principal Commissioner of Income-tax, Mumbai-17. The matter was decided on 2025-09-26 by the ITAT (Shri Pawan Singh, Judicial Member (SMC)). On those facts the ITAT held as follows. The appeal was allowed. Since AY 2018-19 was reopened beyond three years from the end of the relevant assessment year, s.151 required the prior approval of the Principal Chief Commissioner or Chief Commissioner; the approval obtained from the Principal Commissioner was not valid, the notice under s.148 was therefore invalid, and the subsequent action including the assessment order was void ab initio (para 7). Independently, on the merits, the addition could not be sustained where the assessee had shown by his bank statement a purchase of bitcoin at Rs 4,10,000 and a sale at Rs 4,58,594 yielding a profit of Rs 48,594, and the Assessing Officer had made the addition on the information available with him without bringing any adverse material on record and without carrying out any investigation or enquiry (para 8).
On the additional ground, the Bench admitted it as purely legal, requiring no new facts, the relevant material being on record. It found it undisputed that the notice under s.148 was dated 19 April 2022 for AY 2018-19, that this was beyond three years from the end of the relevant assessment year, and that s.151 accordingly required approval of the Principal Chief Commissioner or Chief Commissioner rather than the Principal Commissioner, following the jurisdictional Bombay High Court in Vodafone Idea Ltd v DCIT. It rejected the Departmental Representative's submission that Vodafone Idea was undermined because the decision it followed, Siemens Financial Services (P) Ltd v DCIT, 457 ITR 675, had been set aside by the Supreme Court in Union of India v Rajiv Bansal decided 3 October 2024, holding that it had not been completely set aside; the assessee's counsel had taken the Bench to the questions of law framed at para 18 and the findings at sub-paras (d) and (e) of para 114 of Rajiv Bansal, and to para 115, in support of that reading. On the merits, the Bench held that the Assessing Officer had brought no adverse material and had made no enquiry before making the addition, so the addition failed independently of the jurisdictional defect. In the words reproduced by the source cited on this page: "The AO without bringing any adverse material, has made addition on sale of Bitcoin on the basis of information available with him without bringing any adverse material on record. No investigation or enquiry was carried out by him before making the addition." The decision followed or applied Vodafone Idea Ltd v. DCIT (Bombay High Court) — followed on the s.151 sanction; Siemens Financial Services (P) Ltd v. DCIT, 457 ITR 675 (Bombay) — held not completely set aside by Union of India v. Rajiv Bansal.
It was decided by the ITAT on 2025-09-26 and is reported as ITA No. 4416/MUM/2025 (Income Tax Appellate Tribunal, Mumbai, 'SMC' Bench); assessment year 2018-19; instituted 7 July 2025, heard 10 September 2025, pronounced 26 September 2025. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 147, section 148, section 148A, section 151, section 144B, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The appeal was allowed. Since AY 2018-19 was reopened beyond three years from the end of the relevant assessment year, s.151 required the prior approval of the Principal Chief Commissioner or Chief Commissioner; the approval obtained from the Principal Commissioner was not valid, the notice under s.148 was therefore invalid, and the subsequent action including the assessment order was void ab initio (para 7). Independently, on the merits, the addition could not be sustained where the assessee had shown by his bank statement a purchase of bitcoin at Rs 4,10,000 and a sale at Rs 4,58,594 yielding a profit of Rs 48,594, and the Assessing Officer had made the addition on the information available with him without bringing any adverse material on record and without carrying out any investigation or enquiry (para 8). It arises in Reassessment & Reopening, Crypto & Virtual Digital Assets and Evidence & Burden of Proof matters, on section 147, section 148, section 148A, section 151, section 144B of the Income Tax Act 1961, and was decided by Shri Pawan Singh, Judicial Member (SMC). Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. If the approval is from a Principal Commissioner or Commissioner for a beyond-three-years reopening, take the s.151 point as a jurisdictional ground and raise it as an additional ground if it was not taken below; it is purely legal and needs no new facts. Be ready for the Revenue's Rajiv Bansal argument and be ready to identify precisely which part of the earlier High Court line it displaces; this Bench held that Siemens Financial Services had not been completely set aside. On the merits, put the actual bank trail on record — the purchase figure, the sale figure and the resulting profit — because the department's information is usually a gross or aggregate figure and not a computed gain. Ask for the underlying information relied on and, where the addition rests on a third party, ask for cross-examination; the assessee here also took that ground. Do not argue s.115BBH for a year before AY 2023-24, and do not let the Assessing Officer apply thirty per cent to one. Where the client's income was genuinely below the taxable limit, plead that expressly as the reason no return was filed, as was done here.
Validity check could not be completed. Validity check could not be completed. The load-bearing proposition — that the Bombay High Court line in Siemens Financial Services and Vodafone Idea on the s.151 sanction survives the Supreme Court's decision in Union of India v Rajiv Bansal (3 October 2024) — is expressly contested by the Revenue in this very order and is being argued differently before different benches. I did NOT read Rajiv Bansal, Vodafone Idea or Siemens Financial Services on this pass, and nothing here should be taken as a view on that question; the vocabulary available to this field has no value for 'contested between benches', so it is recorded here. The merits holding at para 8 is fact-specific and does not depend on that question. I did not check for an appeal against this order. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Several things in the report do not hold together and the reader should know them. (1) Para 7 records that the notice under s.148 is dated 19 April 2022 and, in the same sentence, that the Assessing Officer mentioned in para 3 of the notice that it was issued after obtaining prior approval of the Principal CIT, Mumbai-17 'on 19/09/2022' — an approval date five months AFTER the notice; the order does not address the discrepancy and I have not resolved it. (2) The decision relied on is cited as 'Writ Petition No. 2768 of 2022' in the assessee's grounds and as 'Writ Petitio No.2708 of 2022 dated 06/02/2022' in para 3; the two numbers cannot both be right and I did not read the Bombay High Court judgment to settle it. (3) The citation given in para 5 for Union of India v Rajiv Bansal reads '(2021) 167 taxmann.com 70 (SC)' for a decision dated 3 October 2024, so the year in the citation string is wrong on its face. (4) The cause title prints 'Appellant / Revenue' against the assessee's name and 'Respondent / Assessee' against the department's, although the opening line records that this is an appeal by the assessee. (5) indiankanoon titles the document 'Nashit Suhail Anshari' while the order itself spells the name 'Nashit Suhail Ansari'; I have used the spelling in the order. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The appeal was allowed. Since AY 2018-19 was reopened beyond three years from the end of the relevant assessment year, s.151 required the prior approval of the Principal Chief Commissioner or Chief Commissioner; the approval obtained from the Principal Commissioner was not valid, the notice under s.148 was therefore invalid, and the subsequent action including the assessment order was void ab initio (para 7). Independently, on the merits, the addition could not be sustained where the assessee had shown by his bank statement a purchase of bitcoin at Rs 4,10,000 and a sale at Rs 4,58,594 yielding a profit of Rs 48,594, and the Assessing Officer had made the addition on the information available with him without bringing any adverse material on record and without carrying out any investigation or enquiry (para 8).
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My return was only processed under 143(1). Does that stop the department reopening it later?
How much am I actually required to disclose — and can they reopen because the officer drew the wrong conclusion?
The sanctioning authority just wrote 'yes' and signed. Is that a sanction?
A reassessment was done in between. Does the two-year clock for s.263 restart from it?