INCOME TAX OFFICER-34(3)(2), MUMBAI, MUMBAI vs. PINKY HIMANSHU ACHARYA, MUMBAI

In the instant case, the AO vide assessment order dt. 26-05-2023 u/s. 147 r.w.s. 144B of the Act, has made an addition of Rs. 27,29,789/-being accommodation entries, which on appeal deleted by the Ld. Commissioner on various aspects, including legal, such as escaped income was of Rs. 27,29,789/- only, on the basis of which, the assessment of the Assessee was reopened u/s. 147 of the Act, after 03 years from the end of the relevant assessment year and, therefore, the Ld. Commissioner by considering peculiar facts and circumstances and the statutory threshold monetary limit and the provisions of the Act u/s. 149(1)(b) of the Act, ultimately held that since three years period from the end of 31-03-2018 had already been elapsed and therefore notice u/s. 148 of the Act could only have been validly issued, if the escaped income was Rs. 50 lakhs or more, as per the provisions of section 149(1)(b) of the Act.

The Revenue somehow is in appeal before this court, on various aspects mentioned above, whereas the assessee by filing Cross Objection has also challenged the decision of the Ld. Commissioner

We have heard the parities and perused the material available on record and specifically the determinations made by the authorities below. As observed above, the escaped income, on the basis of which the case of the Assessee was reopened u/s. 147 of the Act, was not more than the threshold limit of Rs. 50 lakhs and, therefore, in view of the relevant provisions of section 149 of the Act, the Ld. Commissioner has rightly quashed the assessment order.

Even otherwise, as claimed by the Assessee in the Cross Objection, the case was reopened after three years from the end of the relevant assessment year and, therefore, sanction of the Ld. Pr.CCIT was required to be taken u/s. 151 of the Act, as prescribed, however, admittedly, sanction for issuing the notices/orders u/s. 148, 148A(b) and 148A(d) of the Act has been taken from Ld. Pr.CIT, but not from the Ld. Pr.CCITand thus, we are agreement with the claim of the Assessee that sanction from Ld. Pr. CIT, was not in consonance with the relevant provisions of law, as enshrined in section 151 of the Act.