LALIT,SONIPAT vs. ITO WARD 1, SONIPAT

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ITA 2856/DEL/2026Status: DisposedITAT Delhi23 September 2026AY 2019-205 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the approval obtained under Section 151 of the Act was not proper as the Assessing Officer was not sure of the total escaped income at the time of approval. The discrepancy between the amount for which approval was sought and the amount determined in the order under Section 148A(d) rendered the reopening invalid.

What were the facts?

The assessee's appeal was filed 10 days late, but the delay was condoned due to a reasonable cause. The core issue involved the validity of the reopening of assessment due to discrepancies in the estimated escaped income.

What were the issues?

Whether the reopening of assessment was valid when the approval obtained under Section 151 was based on an inflated figure of escaped income compared to the final determination.

Which sections of the Income-tax Act were involved?

Section 151,Section 148A(d),Section 148

AI-generated summary — verify with the full judgment below

IN THE INCOME TAXAPPELLATE TRIBUNAL DELHI BENCH “SMC”, NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA No.2856/DEL/2026 (Assessment Year : 2019-20) Lalit, vs. ITO, Ward 1, Village Patla, P.O. Jaukhauli, Sonipat. Tehsil Rai, Sonipat - 131 001 (Haryana). (PAN: AEXPL7185E) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri P.C. Yadav, Advocate Shri R.K. Vashisth, Advocate REVENUE BY : Shri Manoj Kumar, Sr. DR Date of Hearing : 15.07.2026 Date of Order : 23.09.2026 O R D E R 1. This appeal is filed by the assessee against the order of ld. Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [“Ld. CIT(A)”, for short] dated 08.01.2026 for the ASSESSMENT YEAR 2019-20. 2. At the time of hearing, we observed that the appeal is time barred by 10 days. In response thereof, the ld. counsel for the assessee submitted that there was a reasonable cause for the delay in filing the appeal. Accordingly, he prayed that

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the delay in filing the appeal be condoned. We have heard both the counsels on the issue of condonation of delay. In our considered opinion, there was a reasonable cause for the delay in filing the appeal. Therefore, we condone the delay in filing the appeal before the Tribunal. 3. At the time of hearing, ld. AR of the assessee submitted that the issue relates to alleged cash payment to the builder. He brought to our notice page 8 of the paper book which is the approval obtained by the AO under section 151 of the Income-tax Act, 1961 (for short ‘the Act’) and he brought to our notice Row 7 i.e. quantum of income which is escaped income and in approval form, it is mentioned at Rs.28,40,800/- and the AO also mentioned in Row 19 for recommendation for approval was duly based on the draft order u/s 148A(d) of the Act wherein it was mentioned an amount of Rs.22,00,000/-. He submitted that the order passed u/s 148A(d) clearly shows that there is escapement of income of Rs.22,00,000/- whereas the approval obtained for escapement of income of Rs.28,40,800/- which clearly shows that ld. PCIT has not applied his mind independently and approved the same mechanically. 4. On the other hand, ld. DR of the Revenue relied on the findings of the lower authorities. 5. Considered the rival submissions and material placed on record. I observed

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that the Assessing Officer observed that there is escapement of income in the case of the assessee to the extent of Rs.28,40,800/-/- which comprised of cash payment of Rs.2,05,600/- and receivable of cash of Rs.26,35,200/-. The Assessing Officer obtained approval u/s 151 of the Act with the above said reasons to believe. However, while passing the order u/s 148A(d) of the Act, the escapement of income was reduced from Rs.28,40,800/- to Rs.22,00,000/- which include the cash transaction amounting to Rs.22 lakhs with Max Heights Township & Promoters Pvt. Ltd.. It clearly shows that the Assessing Officer has got approval on the basis of alleged escapement of income. However on careful consideration of facts available on record, I observed that the Assessing Officer was never sure of total escapement of income at the time of obtaining approval u/s 151 of the Act. Even at the time of passing order u/s 148A(d) of the Act, he has reduced escapement of income to the extent of Rs.22,00,000/-. Therefore approval obtained u/s 151 of the Act is not proper reasons to believe. 6. Further, I observed that from the factual matrix available on record, it is clear that the Assessing Officer was never assured of the escapement of income for the year under consideration. I observed that this issue is covered by various decisions of Hon’ble Courts/Tribunal as under :- 1. Vodafone India Ltd. vs. DCIT reported in 464 ITR 385 (Bom.H.C.) 2. Ms. Sonali Dharmendra Mhatre vs. ITO (2005) 5 TMI 1481 2. Chhugamal Rajpal vs S.P. Chaliha 3. United Electrical C. (P) Ltd. vs. CIT 4. PCIt v. N.C. Cables Ltd.

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5.

CIT vs S. Goyanka Lime & Chemical Ltd. 6. PCIT vs. Meenakshi Overseas (P) Ltd. (2017) 395 ITR 677 (Delhi HC) 7. I observed that in the case of Vodafone India Ltd. vs. DCIT (supra), Hon’ble Bombay High Court held that sanction granted without proper application of mind is invalid in law. Further, ITAT, Mumbai Bench in the case of Ms. Sonali Dharmendra Mhatre vs. ITO (supe) held that the reopening becomes void ab initio if the actual escapement does not meet the statutory threshold. Further, coordinate Bench of ITAT in the case of Shri Malkian Singh vs. ITO (2025) (10 TMI 848 held that where the reopening of the assessment order quashed for the reasons actual escapement was much lower than what was assumed for invoking extended limitation. Therefore, in the present facts on record the actual escapement of income is only Rs.22,00,000/- whereas the escapement of income was assumed for invoking the provisions of section 148 of the Act was beyond Rs.2840,800/-. Accordingly, the appeal filed by the assessee is allowed. 8. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on this 23rd day of September, 2026.

Sd/- (S. RIFAUR RAHMAN) ACCOUNTANT MEMBER Dated : 23.09.2026 TS

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