ANKIT ATULKUMAR SHAH,AHMEDABAD vs. ITO WARD 1(3)(1), AHMEDABAD

ITA 485/AHD/2026Status: DisposedITAT Ahmedabad30 September 2026AY 2019-2012 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed grounds 1 to 6, finding the reassessment proceedings to be valid. Regarding the limitation period, it was held that after excluding the time granted for the assessee to reply to the notice under Section 148A(b), the notice under Section 148 was issued within three years, making Section 149(1)(b) inapplicable. Consequently, Section 149(1)(a) was applicable, allowing reassessment even if the escaped income was less than Rs. 50 Lakhs. The approval under Section 151 was taken from the Principal Commissioner, which was deemed the correct authority, and any reference to Section 149(1)(b) in the approval form was considered a clerical error. The approval was deemed valid as per Rule 127A of the Income Tax Rules, 1962, as it contained the name, office, and designation of the specified authority. The Tribunal found that the AO followed the procedure under Section 148A, and there was no merit in the contention that Explanation 2(iv) to Section 148 was not satisfied or that the AO was not required to follow Section 148A. The Tribunal held that the reassessment proceedings complied with Sections 147, 148, 148A, 149, and 151. Regarding Ground No. 7, the Tribunal upheld the disallowance of Rs. 1,00,000/- under Section 80GGC. It was held that the donation made to the Rashtriya Samajwadi Party was bogus, as evidenced by investigation material, statements recorded under Section 132(4), bank trail analysis, and the established modus operandi of the recipient political party. The Tribunal relied on Supreme Court judgments in CIT v. Durga Prasad More and Sumati Dayal v. CIT, stating that taxing authorities are not required to ignore surrounding circumstances and can look beyond apparent transactions. The assessee failed to establish that the contribution was a genuine donation eligible for deduction. The decisions relied upon by the assessee were distinguished. Therefore, the order of the CIT(A) affirming the disallowance was upheld. The appeal was dismissed.

What were the facts?

The assessee, Ankit Atulkumar Shah, filed an appeal against the order dated 03/12/2025 passed by the National Faceless Appeal Centre (NFAC), Delhi (CIT(A)). The CIT(A) had dismissed the assessee's appeal against the Assessment Order dated 23/01/2025, passed under Section 147 of the Income Tax Act, 1961, for Assessment Year 2019-2020. The reassessment proceedings were initiated on 04/05/2023, with a notice under Section 148 issued on 05/04/2023. The assessee challenged the validity of the reassessment proceedings on multiple grounds, including lack of proper approval, incorrect invocation of Section 148A, and issues with the limitation period. Additionally, the assessee challenged the disallowance of a deduction of Rs. 1,00,000/- claimed under Section 80GGC.

What were the issues?

1. Whether the reassessment proceedings initiated under Section 147 of the Act for AY 2019-2020 are invalid due to the alleged failure of the Assessing Officer (AO) to obtain prior approval from the competent authority as required under Explanation 2(iv) to Section 148, especially when the case was reopened based on third-party search information. 2. Whether the reassessment proceedings are unsustainable in law as Section 148A was invoked in circumstances where it was not applicable, particularly when the initiation of proceedings under Section 148 was barred by limitation. 3. Whether the invocation of Section 149(1)(b) is erroneous, as for matters beyond three years from the end of AY 2019-20, the alleged escapement of income should exceed Rs. 50,00,000/-, which was not fulfilled. 4. Whether the approval obtained under Section 151 from the Principal Commissioner of Income Tax (PCIT) instead of the Principal Chief Commissioner of Income Tax (PCCIT) vitiates the reassessment proceedings, especially since Section 149(1)(b) was invoked in the approval form. 5. Whether the reliance on an unsigned approval under Section 151, in violation of Section 282A and the DSC Policy, 2018, renders the reassessment proceedings void. 6. Whether the assessment completed through the NFAC is vitiated in law, as matters originating from search-related information should be handled by the Central Circle. 7. Whether the disallowance of Rs. 1,00,000/- claimed under Section 80GGC by the AO and upheld by the CIT(A) is justified. Assessee's Contentions: - Grounds 1-6: Reassessment proceedings are invalid due to procedural irregularities, lack of proper approvals, incorrect invocation of sections, and limitation issues. Specifically, approval was not obtained from the competent authority (PCCIT), Section 148A was wrongly invoked, the escapement amount did not meet the threshold for Section 149(1)(b), and the approval under Section 151 was unsigned or from an incompetent authority. The assessment should have been handled by the Central Circle. - Ground 7: The disallowance of Rs. 1,00,000/- under Section 80GGC was made without properly appreciating the evidence and documents furnished. Revenue's Contentions: - Not explicitly recorded for all grounds, but impliedly, the revenue supported the AO's actions and the CIT(A)'s order upholding the reassessment and disallowance.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 149,Section 151,Section 80GGC,Section 282A,Section 132(4),Section 13A,Section 80G(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SMC” BENCH, AHMEDABAD

Per Rahul Chaudhary, Judicial Member:

1.

The present appeal has been preferred by the Assessee against the Order, dated 03/12/2025, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’] whereby the Learned CIT(A) had dismissed the appeal against the Assessment Order, dated 23/01/2025, passed under Section 147 of the Income Act, 1961 [hereinafter referred to as ‘the Act’] for the Assessment Year 2019-2020. 2. The Assessee has raised the following grounds of appeal:

1.

The Ld. AO has erred in law

The order continues below.

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