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Facts
The assessee filed an appeal against an order of the CIT(A) with a delay of 174 days. The assessee explained the delay was due to a bonafide belief and the subsequent receipt of a penalty order which revealed a significant liability, prompting the appeal.
Held
The Tribunal condoned the delay, subject to a Rs. 5000/- deposit. The Tribunal observed that the reopening of the case under Section 148 after more than 3 years from the end of the assessment year, without proper approval as per Section 151(ii) of the Act, violated the provisions.
Key Issues
Whether the reopening of assessment under Section 148 was valid after more than 3 years from the end of the assessment year, without proper approval under Section 151(ii) of the Act.
Sections Cited
250, 56(2)(vii)(b), 148, 147, 143(3), 144B, 151(ii), 148A(d)
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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY
O R D E R Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 06.11.2024, impugned herein, passed by the National Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. CIT(A)) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2017-18.
Sejal Milan Vora 2. At the outset it is observed that there is a delay of 174 of filing the instant appeal on which, the assessee by filing duly sworn affidavit has claimed as under: “I, Sejal Milan Vora, daughter of Milan Vora aged 50 years residing at Room No. 10, 2nd Floor, Mini Rewa Building, Bhulabhai Desai Road, Cumballa Hill, Mumbai 400026 assessed under the PAN: AACPV6094M do hereby solemnly declare on oath as under:
1. 1. For the FY 2017-18, I had filed my return of income on 30.07.2017 declaring total income of Rs. 4,37,270/-. Thereafter, I had filed a revised return on 31.03.2019 thereby declaring income of Rs.12,11,380/-, wherein I had disclosed income of Rs. 8,27,000/- under section 56(2)(vii)(b) of the Act.
2. Subsequently, my case was reopened vide issue of notice u/s. 148 of the Act and concluded vide assessment order u/s.147 r.w.s. 143(3) r.w.s. 144B of the Act dated 29.05.2023, thereby assessing total income at Rs.38,84,380/-after making an addition amounting to Rs.26,73,000/- u/s. 56(2)(vii)(b) of the Act. The case was also referred to the Ld. Departmental Valuation Officer (hereinafter referred to as "DVO") before the passing of assessment order. The Ld. DVO has determined the fair market value vide order dated 10.07.2023.
3. Aggrieved by the assessment order u/s. 147 r.w.s. 143(3) r.w.s. 144B of the Act dated 29.05.2023, I had preferred an appeal before the Ld. CIT(A) on 26.06.2023 raising grounds on validity as well as merits of the case. The Ld. CIT(A) has only allowed partial relief on the basis of the report of Ld. DVO.
4. I was under a bonafide belief that since the report of the Ld. DVO was final, I had no legal recourse available. Further, I was informed that the addition ought to have been restricted by the Ld. CIT(A) to a sum of Rs.5,22,863/-after considering the suo-moto disallowance made by me. Therefore, I was advised not to litigate the issue further in view of the small quantum of addition involved. However, on receipt of the penalty order on 24.06.2025, I was made aware that the addition sustained by the Ld. CIT(A) was a sum of Rs. 13,49,863/- and was in contravention of the findings of the Ld. DVO. Further, I was also fastened with a penalty liability of Rs.2,99,149/- vide the aforesaid penalty order. It was only on receipt of the penalty order that I was able to envisage and understand that I was liable for Rs.11,05,522/- in the form of taxes, interest and penalty.
5. Accordingly, on being informed of the hefty liability of taxes, interest and penalty; I was advised to file an appeal before the Hon'ble Income Tax Appellate Tribunal against the order of Ld. CIT(A). Due to the aforesaid reasons and bonafide belief, a delay of 172 days has occasioned in the filing of present appeal. I hereby affirm that whatever is stated above is true to the best of my knowledge and belief.”
Though the Ld. DR refuted the claim of the assessee qua condonation of delay, however, this court find the reasons stated by the assessee for condonation of delay, which are duly supported with duly sworn affidavit, as reasonable and plausible. Thus, the delay of 174 in filing of this instant appeal is condoned, however, subject to deposit of Rs. 5000/- in Revenue Department ‘under other head’ within 15 days of the receipt of this order.
Coming to the merit of the case, it is observed that admittedly the case of assessee was reopened by issuing notice u/s 148 of the Act, after elapsing more than 3 years from the end of relevant assessment year {A.Y. 2017-18} and taking approval from the Ld. Principal CIT-19, Mumbai and thus violated the provision of section 151(ii) of the Act, according to which, if more than 3 years has been elapsed from the relevant assessment year, then the specified authorities for the purpose of section 148 shall be Principal Chief Commissioner or Principal Director General or where there is no such posts then the Chief Commissioner or Director General would be the specified Authority.
Thus, this court on the aforesaid reason, is inclined to quash the notices u/s 148A(d) and 148 of the Act even dated 29.07.2022 along with assessment order dated 29.03.2023 u/s 147 r.w.s. 144B of the Act. Thus, the same are quashed, by allowing appeal to the assessee.
In the result, the assessee’s appeal is allowed. Order pronounced in the open court on 31.10.2025.