RAMESHCHANDRA VISHANJI THACKER,GANDHIDHAM vs. ITO WARD-2, GANDHIDHAM, GANDHIDHAM

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ITA 98/RJT/2026Status: DisposedITAT Rajkot15 May 2026AY 2019-209 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the approval obtained under Section 151 of the Income Tax Act was not signed, rendering it invalid. Consequently, the reassessment proceedings initiated based on this invalid approval were quashed.

What were the facts?

The assessee's assessment was reopened under Section 147 based on information regarding cash transactions. The reopening was challenged by the assessee on several grounds, including procedural irregularities in obtaining approval.

What were the issues?

Whether the reassessment proceedings are valid when the mandatory approval under Section 151 is not properly signed by the specified authority.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 151,Section 69A,Section 115BBE,Section 271AAC,Section 234A,Section 234B,Section 234C,Section 234D

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC”

Before: Dr. Arjun Lal Saini

For Respondent: Shri Gopi Nath Chaubey, Yadav, Ld. Sr. DR
Hearing: 20/02/2026Pronounced: 15/05/2026

आयकर अपीलीय अिधकरण, राजकोट �ायपीठ,राजकोट। In The Income Tax Appellate Tribunal, “SMC” Rajkot Bench, Rajkot

Before Dr. Arjun Lal Saini, Accountant Member

आयकरअपील सं. / ITA No.98/RJT/2026 Assessment Year: 2019-20) (िनधा�रणवष�/ Rameshchandra Vishanji Thacker ITO Vs. Shop No.4, GF, Plot No.211, Shah Ward-2, Gandhidham Avenue-1, Polie Station Road, Gujarat 370201 Ward-12/B, Gandhidham, Gujarat – 370201

PAN No. – ABFPT3600H (अपीलाथ�/assessee) : (��यथ�/Respondent) �नधा�रतीक�ओरसे/Assessee by : Shri Kalpesh Doshi,Ld.AR राज�वक�ओरसे/Revenue by : Shri Gopi Nath Chaubey, Yadav, Ld. Sr. DR

सुनवाईक�तार�ख/Date of Hearing : 20/02/2026 घोषणाक�तार�ख/Date of Pronouncement : 15/05/2026 ORDER Per, Dr. Arjun Lal Saini, AM:

The present appeal has been filed by the Assessee, against the order passed by the Learned Commissioner of Income Tax (Appeal), National Faceless Appeal, Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] dated 10.11.2025, arising in the matter of assessment order passed u/s.147 of the Income Tax Act, 1961 dated 27.03.2024 relevant to the Assessment Year 2019- 20. 2. Grounds of the appeal raised by the assessee, are as follows: “1.That, the Ld. CIT(A) has wrongly confirmed the reopening of assessment u/s 147 of the 1.T. Act, 1961. (a). The Assessment order lacks Jurisdiction as order

ITA No.98/RJT/2026 (AY 2019-20) Rameshandra V. Thacker vs. ITO has been passed in violation of CBDT guidelines. (b). The reopening of assessment is based on incorrect facts. (c ). The approval granted u/s 151 of the Act by Ld. PCIT is without application of mind and mechanical in nature. ( d). The order is passed without proving copy of satisfaction note and without providing the approval to satisfaction note. 2. That, the order passed by the Ld. assessing officer and confirmed by the Ld. CIT(A) is without following the statutory procedure laid down under the Income Tax Law and therefore the order passed by the Ld. assessing officer is bad-in- law. (a). The notice issued u/s 143(2) of the Act dated 14/07/2023 is in violation of CBDT Instruction F. No. 225/157/2017/ITA-II.( b). The order is passed without obtaining the approval u/s 148B of the Act (c ). The assessment proceedings is in violation of Section 151A of the Act. (d ). The assessment order has been passed without following procedure contained in section 144B(8) of the Act. 3. That, the Ld. CIT(A) has wrongly confirmed the order passed without giving proper opportunity to cross examine the deponent. Therefore, the order is bad- in-law and required to be quashed. 4. That, the Ld. CIT(A) has wrongly confirmed the addition amounting to Rs. 1,98,750/-, on account of unaccounted cash transaction u/s 69A of the I.T. Act, 1961. 5. That, the Ld. CIT(A) has wrongly confirmed the application of provision of section 115BBE of the I.T. Act and wrongly computed the tax at higher rate. 6. That, the Ld. CIT(A) has wrongly initiated penalty proceedings u/s 271AAC of the I.T. Act, 1961. 7. That, the Ld. CIT(A) has wrongly charged interest u/s 234A, 234B, 234C and 234D of the I.T. Act, 1961. 8. That, the findings of the Ld. assessing officer and Ld. CIT(A) are not justified and are bad-in-law. 9. The appellant carves to add, amend, alter and delete any of the above ground of appeals.”

3.

Brief facts of the issue in dispute are stated as under. The assessee filed the return of income, originally u/s 139(1) of the Act, on 07.10.2019, showing therein returned income of Rs.12,96,510/-. The case of the assessee was reopened u/s 147 of the Income-tax Act, 1961 for the reason that the assessee has indulged into cash transaction with the Khavda Group to the tune of Rs.1,98,750/-. Therefore, notice u/s.148 of the Income tax Act, 1961 was issued on 29/03/2023 duly served upon the assessee, requiring the assessee to file return of income for A.Y.2019-

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ITA No.98/RJT/2026 (AY 2019-20) Rameshandra V. Thacker vs. ITO 2020. In response to the notice u/s 148 of the Act, the assessee has e-filed return of income for the year under consideration on 26.04.2023, declaring therein total income of Rs.12,96,510/-. The assessee’s case was transferred out from Faceless Assessment u/s 144B(8) of the Income-tax Act, 1961 to Jurisdictional Assessing Officer for completion of proceedings.

4.

In response to the various notices, issued by the assessing officer, the assessee submitted detailed written submission, along with documentary evidences, before the assessing officer. The main contention of the assessee, before assessing officer, vide his reply dated 13.03.2024 & 21.03.2024, was that he has not entered into any financial transaction with M/s. Khavda Travels and that the seized material does not connect to him. However, the assessing officer rejected the above contention of the assessee and observed that the assessee has indulged into cash transaction with Khavda Travels amounting to Rs.1,98,750/-, as per the seized material. The assessee has failed to explain the sources of the above cash transaction, therefore, unaccounted cash transaction of Rs.1,98,750/- was treated as income in the hands of the assessee, within meaning of section 69A r.w.s. 115BBE of the Act.

5.

Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before the Ld. CIT(A), who has confirmed the action of the assessing officer. The learned CIT (A) noticed that in view of the reasons stated by the A.O. in the assessment order, it is crystal clear that the assessee has indulged into cash transaction with Khavda Travels amounting to Rs.1,98,750/-, as per the seized material. The assessee has failed to explain the sources of the above cash transaction, therefore, unaccounted cash transaction of Rs. 1,98,750/- has been treated as income in the hands of the assessee within meaning of section 69A r.w.s. 115BBE of the Act.

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ITA No.98/RJT/2026 (AY 2019-20) Rameshandra V. Thacker vs. ITO 6. Aggrieved by the order of the Ld. CIT(A), the assessee is in further appeal before this Tribunal.

7.

Shri Kalpesh Doshi, Ld. Counsel for the assessee submitted that the issue under consideration is squarely covered in favour of the assessee, as the approval u/s.151 of the Act was neither signed by designated authority manually, nor signed by digitally. Therefore, the consequential assessment order should be quashed on this issue. The Ld. Counsel for the assessee, for this purpose, took me through approval u/s.151 of the Act, which is reproduced below:

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ITA No.98/RJT/2026 (AY 2019-20) Rameshandra V. Thacker vs. ITO

1.

Brief details of source of information collected/received by the assessing officer: a. A search & seizure operation on Khavda Group was conducted on 11.11.2022. b. During the search & seizure action, certain incriminating document in the digital/ physical form e.g. Digital devices, loose paper files, books of accounts, documents etc were found & seized from the premise of Khavda Travels, Plot No.52, Sector- 1/A, Gandhidham [who was also covered u/s 132 at premise. These incriminating documents pertain to or the information contained therein, relates to the assessee. The satisfaction note in this regard has already been drawn with prior approval of Pr. CIT-1, Rajkot vide letter Pr. CIT-1/RKT/HQ-3/148/2022-23/1599 dated 26.03.2023. 2. Applicability of the provisions of section 147/151 to the facts of the case: a. As per the provisions u/s 148, ""Before making the assessment, reassessment or re-computation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice along with a copy of order passed under clause (d) of section 148A, requiring him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as

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ITA No.98/RJT/2026 (AY 2019-20) Rameshandra V. Thacker vs. ITO may be, apply accordingly as if such return were a retum required to be furnished under section 139; Provided that no notice under the said section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice" b. Further, as per Explanation 2 u/s 148, "For the purposes of this section, where,- The Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee,the Assessing officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee where the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person. c. As per the provisions u/s 151, "Specified authority for the purpose of section 148 and section 148A, shall be- (i) Principal Commissioner of Income-tax or Principal Director of Income- tax or Commissioner of Income-tax or Director of Income-tax, if three years or less than three years have elapsed from the end of the relevant assessment year, (ii) Principal Chief Commissioner of Income-tax or Principal Director General of Income-tax, or where there is no Principal Chief Commissioner of Income-tax or Principal Director General of Income- tax, Chief Commissioner of Income-tax or Director General of Income- tax, if more than three years have elapsed from the end of the relevant assessment year 3. Conclusion:- a. As the search action was initiated under section 132 and after the 1st day of April, 2021, therefore, as per clause iv of Explanation 2 to section 148, the assessing officer is deemed to have information for A.Υ. 2019-2020. b. Further, the provisions of section 148A are not applicable in this case. Since three years have not elapsed from the end of relevant assessment year, thus as per provisions of Section 149 r.w.s 148 r.w.s. 151, the specified authority to grant approval is Pr. Commissioner of Income-tax -1, Rajkot d. Details of nature of transaction/ escapement and amount: Nature of transaction Amount involved Cash Transaction Rs.1,98,750/- In view of the above, the proposal is submitted for your kind perusal and necessary approval to issue notice u/s. 148 of the Act for A.Υ. 2019-20.

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ITA No.98/RJT/2026 (AY 2019-20) Rameshandra V. Thacker vs. ITO 8. Therefore, Ld. Counsel for the assessee submitted that the issue under consideration is squarely covered by the judgment of the Co-ordinate Bench of the ITAT, Rajkot in the case of Shree Maru Kansara Soni Gnati vs. ITO in ITA No.789/Rjt/2025, order dated 13.02.2026, wherein Tribunal has held as under:

“6.Shri Kalpesh Doshi, Ld. Counsel for the assessee, vehemently argued that in assessee’s case under consideration, the approval taken u/s 151 of the Act is not signed and for that Ld. Counsel for the assessee took me through the relevant approval under section 151 of the Act, which is reproduced below:

7.

Thereafter Ld. Counsel for the assessee submitted that since approval granted by the designated officer u/s 151 of the Act, is not signed, therefore the order passed by the Assessing Officer should be quashed. 8. On the other hand, the Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. 9. I have heard both the parties and perused the materials available on record. I have gone through the approval u/s 151 of the Act and noted that there is no signature in the approval dated 26/03/2021, reproduced above. The approval granted by the higher authority u/s 151 of the Act is neither signed manually nor digitally, therefore, in absence of valid signature, the notice issued u/s 148 of the Act and the reassessment proceedings carried out is bad in law and liable to be quashed. In the absence of

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ITA No.98/RJT/2026 (AY 2019-20) Rameshandra V. Thacker vs. ITO signature by the concerned authority on the approval under section 151 of the Act, such approval document, cannot be enforced in the eye of law. 10. Under the Income Tax Act, 1961, the Specified Authority defined in Section 151 plays a critical oversight role in the process of assessing income that has escaped assessment. Their primary function is to provide mandatory prior approval before certain jurisdictional actions can be taken by an Assessing Officer. According to Section 151, the "Specified Authority" for the purposes of Sections 148 and 148A is the Additional Commissioner, the Additional Director, the Joint Commissioner, or the Joint Director etc. An Assessing Officer is prohibited from issuing a notice under Section 148 (which initiates the reassessment process) without prior approval from the specified authority if the information suggesting the escape of income was received through a scheme notified under Section 135A of the Act. Under the procedure for determining whether income has escaped assessment, the Assessing Officer must obtain the prior approval of the specified authority to pass an order under Section 148A(3) of the Act. This order determines whether or not a case is "fit" to issue a notice under Section 148 based on available material and the assessee’s reply to a show-cause notice. The role of the Specified Authority under Section 151 of the Act, is to act, as a statutory check, ensuring that reassessment proceedings and notices are only initiated after a high-ranking official has reviewed the information and granted formal sanction. Therefore, approval under section 151 of the Act, should be signed by the appropriate income tax Authority. 11. Therefore, I note that without a valid and properly signed approval under Section 151 of the Income Tax Act, 1961, reassessment proceedings under Sections 147/148 of the Act cannot be validly initiated. The requirement of approval under Section 151 is mandatory and jurisdictional; failure to comply with this condition precedent renders the entire reassessment invalid. The law is not a mere formality, it safeguards taxpayers against arbitrary reopening of assessments. Under Section 151 of the Act, before issuing a notice under Section 148 of the Act, (which triggers reassessment under Section 147), the Assessing Officer must obtain prior approval from the specified higher authority (e.g., Commissioner, Principal Commissioner, Principal Chief Commissioner, etc., as applicable) and must record the reasons on which this approval is based. The statutory scheme makes this a condition precedent to the validity of any reassessment proceedings. Therefore, I find that Section 151 sanction is jurisdictional, without it, the assessing officer has no authority to issue a notice under Section 148 of the Act, and the proceedings would be void ab initio. A document that is not signed cannot automatically be treated as a valid document in Indian law. If the approval note under Section 151 of the Act is not signed, reassessment proceedings initiated thereafter are to be quashed. Accordingly, I quash the re-assessment order dated 30.03.2022, being void ab-initio. 12. As the reassessment itself is quashed, all other issues on merits of the additions, in the impugned assessment proceedings, are rendered academic and infructuous.”

9.

Since, the issue is squarely covered in favour of the assessee by the judgment of the ITAT, Rajkot in the case of Shree Maru Kansara Soni Gnati (supra) and there is no change in facts and law. Therefore, respectfully following

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ITA No.98/RJT/2026 (AY 2019-20) Rameshandra V. Thacker vs. ITO the binding precedent of the Tribunal in the case of Shree Maru Kansara Soni Gnati (supra), I allow the appeal of the assessee.

10.

Since, I have allowed the appeal of the assessee on the technical issue, being approval u/s.151 of the Act is neither signed digitally nor manually, and quashed the reassessment itself, hence, all other issues on merits of the additions, and other technical grounds in the impugned assessment proceedings, are rendered academic and infructuous.

11.

In the result, the appeal of the assessee is allowed.

Order is pronounced in the open court on 15/05/2026.

Sd/- (Dr. Arjun Lal Saini) लेखा सद�/Accountant Member राजकोट/Rajkot िदनांक/ Date: 15/05/2026 Copy of the order forwarded to :  The assessee  The Respondent  CIT  The CIT(A)  DR, ITAT, RAJKOT  Guard File /True copy/ By order //Tue Copy// Assistant Registrar/Sr. PS/PS ITAT, Rajkot

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