SUSHILKUMAR JAIN,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX-1, KALYAN, MUMBAI

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ITA 5086/MUM/2026Status: DisposedITAT Mumbai10 August 2026AY 2017-185 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The ITAT held that the notice under section 148 was issued without obtaining sanction from the competent authority as required by section 151(ii) of the Act. This was a jurisdictional defect that vitiated the reassessment proceedings.

What were the facts?

The Assessing Officer (AO) reopened the assessee's case for AY 2017-2018 and made an addition on account of unexplained cash deposit. The assessee appealed to the CIT(A), who sustained the addition. The assessee further appealed to the ITAT.

What were the issues?

Whether the reassessment proceedings are invalid due to the improper sanction obtained for issuing the notice under section 148, and whether the additions made by the AO are sustainable.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 151,Section 143(3),Section 68,Section 69A,Section 234B,Section 234D,Section 271AAC

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI

Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI RAKESH KUMAR LODHA

For Appellant: Ms. Tisha Bagh
For Respondent: Shri Rajgopal K
Hearing: 10.08.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “G”, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER And SHRI RAKESH KUMAR LODHA, ACCOUNTANT MEMBER ITA No.5086/MUM/2026 Assessment Year: 2017-2018 SushilKumar Jain Deputy Commissioner of Income Tax – I Kalyan 1st Floor, Mohan Plaza, 2 Assembly Lane, Vs. Dadiseth Agairy Lane, Wayale Nagar, Khadak Kalbadevi Road, Pada, kalian (W), Mumbai 400 002 Maharashtra 421 301 Maharastra Maharastra PAN-AAKP J6705 H (Appellant) (Respondent) Assessee Represented by : Ms. Tisha Bagh Revenue Represented by : Shri Rajgopal K. Parthasarathy-SR Date of Hearing : 10.08.2026 Date of Pronouncement : 10.08.2026. O R D E R PER : Shri Rakesh Kumar Lodha, Accountant Member: This appeal has been preferred by the Assessee against the order dated 09.02.2026, impugned herein, passed by National Faceless Appeal Centre (NFAC)/ Ld. Commissioner of Income Tax (Appeals), [in short “Ld.

ITA NO-5086-M-2026 SUSHIL KUMA JAIN AY 2017-18

Commissioner] u/s 250 of the Income Tax Act, 1961 [in short “the Act”] for the A.Y 2017-2018. 2. The Assessee raised the following grounds of appeal: 1.The Ld. CIT(A) has erred in law and in facts in passing the order u/s. 250 of the Act dated 09.02.2026 confirming the order passed by the Ld. AO u/s 143(3) r.w.s. 147 r.w.s 144B of the Act which is bad and invalid in the eyes of law. 2.The Ld. CIT(A) has erred in law and in facts in not appreciating that the reopening of assessment u/s 148 of the Act and passing the reassessment order u/s 147 of the Act is invalid and bad in the eyes of law. 3.The Ld. CIT(A) has erred in law and in facts in not appreciating that the order passed is in violation of principles of natural justice. 4.The Ld. CIT(A) has erred in law and in facts in confirming the action of the Ld. AO in making addition on account of unsecured loans taken from M/s. Aneri Fincap Ltd. of Rs. 2,50,00,000/- u/s. 68 of the Act. 5.The Ld. CIT(A) has erred in law and in facts in confirming the action of the Ld. AO in making addition on account of alleged commission paid on loans taken from M/s. Aneri Fincap Ltd. of Rs. 1,35,000/- u/s. 68 of the Act. 6.The Ld. CIT(A) has erred in law and in facts in confirming the action of Ld. AO in charging interest u/s. 234B and 234D of the Act which is bad and invalid in the eyes of law. 7.The Ld. CIT(A) has erred in law and in facts in confirming the action of Ld. AO in initiating penalty proceedings u/s. 271AAC of the Act which is invalid and bad in the eyes of law. The appellant craves leave to add to, alter, amend and / or delete in all the foregoing grounds of appeal.

3.

The brief facts of the case are that, the Assessing Officer has reopened the case of assessee u/s 147 of the Act by issuing notice under section 148 dated 30-07-2022, after obtaining sanction from Pr Commissioner of Income Tax-19, Mumbai and ultimately made an addition u/s 69A of Rs 251,35,000/- on account of unexplained cash deposit. Aggrieved by the assessment order, assessee preferred an appeal before first appellate authority. The National Faceless Appeal Centre has sustained the addition.

ITA NO-5086-M-2026 SUSHIL KUMA JAIN AY 2017-18

4.

Before us, Ld. AR of the Assessee contended that notice u/s 148 of the Act was issued without obtaining requisite sanction of Competent Authority u/s 151(ii) of the Act. He relied upon judgment of Hon’ble Jurisdictional court in case of Skypak Travels Private Limited vs ITO, [2026] 185 Taxmann.com 963 (Bom.) and requested to quash the notice and assessment order. 5. Per Contra, Ld. DR relied upon the orders of Lower authorities. 6. We have heard the parties and perused the material available on record. In the instant case, the notice u/s 148 of the Act dated 30-07-2022 was issued by the assessing officer for the AY 2017-18, after obtaining the Sanction from Pr Commissioner of Income Tax -19, Mumbai on 29- 07-2022 vide letter No Pr. CIT-19/148/2022-23/711, instead of competent authority u/s 151(ii) of the Act i.e. Prl. Chief Commissioner of Income Tax. We endorse that Hon’ble Jurisdictional High Court has recently in case of Skypak Travels Private Limited vs ITO, [2026] 185 Taxmann.com 963 (Bom.), WP No 5456 of 2024 decided on 24.04.2026, has also dealt with an identical issue of notice under section 148 of the Act issued beyond three years and held that, approval must be obtained from the higher authority as specified u/s 151(ii) of the Act. Approval granted by the PCIT, being an incompetent authority, is not a mere procedural irregularity but a jurisdictional defect,

ITA NO-5086-M-2026 SUSHIL KUMA JAIN AY 2017-18

which vitiates the entire reassessment proceedings. Further, grant of sanction by the appropriate authority is a precondition for the assessing officer to assume jurisdiction under section 148. Section 151 is not an empty formality but it is a statutory safeguard and check against arbitrary reopening. Non-compliance with that requirement strikes at jurisdiction itself, as held by Hon’ble Apex Court in Union of India and others versus Rajiv Bansal, [(2024) 469 ITR 46(SC)]. Further, the proviso to section 151, inserted with effect from 01.04.2023, cannot be applied retrospectively to validate such approval. 7. Thus, considering the provisions of the law as applicable to the case in hand and respectfully following the aforesaid binding judgment, we hold that AO violated the provisions of section 151(ii) of the Act, therefore, impugned notice dated 30-07-2022 and all the consequential assessment proceedings including the assessment order u/s 143(3)/147 dated 22-05-2023, are liable to be quashed. 8. Order pronounced in the open court on 10.08.2026.

Sd/- Sd/- (NARENDER KUMAR CHOUDHRY) (RAKESH KUMAR LODHA) JUDICIAL MEMBER ACCOUNTANT MEMBER Sharath Kumar Private Secretary.

ITA NO-5086-M-2026 SUSHIL KUMA JAIN AY 2017-18

Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The DR Concerned Bench

//True Copy// By Order Dy/Asstt. Registrar, ITAT, Mumbai.

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