MADHU HARESHKUMAR JAIN,KOLHAPUR, MAHARASHTRA vs. DY. COMMISSIONER OF INCOME TAX, CIRCLE 1, KOLHAPUR, KOLHAPUR, MAHARASHTRA

ITA 1698/PUN/2026Status: DisposedITAT Pune23 September 2026AY 2018-1915 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal quashed the notice issued under Section 148 and the consequent assessment order passed by the Ld. AO as bad in law. The primary reason for this decision was that the notice under Section 148 was issued on April 13, 2022, which is beyond three years from the end of the relevant assessment year (2018-19). As per Section 151(1)(ii) of the Act, for reopening beyond three years, the approval should have been obtained from the Principal Chief Commissioner of Income Tax or the Chief Commissioner of Income Tax, or Principal Director General or Director General of Income Tax. However, the AO obtained approval from the Principal Commissioner of Income Tax, which was not the competent authority in this case. The Tribunal respectfully followed a decision of a co-ordinate bench in the case of other family members of the assessee, which had quashed reassessment proceedings on identical grounds. Since the assessee succeeded on this legal issue, the other grounds challenging the reassessment on different legal grounds and the grounds challenging the additions on merit were rendered academic and not adjudicated.

What were the facts?

The assessee, Madhu Hareshkumar Jain, filed her return of income for Assessment Year 2018-19 declaring a total income of Rs. 30,30,283/-. The Assessing Officer (AO) reopened the assessment under Section 147, alleging that the assessee had received an accommodation entry of Rs. 28,29,900/- in lieu of a sales transaction of penny stock, Kushal Tradelink Ltd., claiming exemption under Section 10(38). The AO added Rs. 28,29,900/- as unexplained credit under Section 68 read with Section 115BBE and Rs. 2,26,400/- as unexplained expenditure under Section 69C for commission. The total income was determined at Rs. 60,86,670/-. The CIT(A)/NFAC upheld the additions. The assessee appealed to the ITAT, challenging the validity of reassessment proceedings and the additions on merit.

What were the issues?

1. Whether the reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961, are valid and not time-barred, considering the notice under Section 148 was issued beyond three years from the end of the relevant assessment year and the approval for reopening was obtained from the Principal Commissioner of Income Tax instead of the specified higher authorities under Section 151(1)(ii)? (Question of law) Assessee's Contention: The reopening is invalid and time-barred because the approval for reopening was obtained from the Principal Commissioner of Income Tax, whereas for reopening beyond three years, approval from the Principal Chief Commissioner or Chief Commissioner of Income Tax is required under Section 151(1)(ii). Reliance was placed on a co-ordinate bench decision for other family members on identical issues. Revenue's Contention: The Ld. DR supported the orders of the Ld. AO and the Ld. CIT(A)/NFAC, implying that the reassessment proceedings were valid. 2. Whether the transaction of purchase and sale of shares of Kushal Tradelink Ltd. was genuine, and the claim of exemption in respect of long-term capital gain was justified in law? (Question of mixed law and fact) Assessee's Contention: The shares were purchased and sold through the stock exchange, and the transaction was genuine, justifying the exemption. The CIT(A) erred in relying on third-party information without providing an opportunity to rebut it. Revenue's Contention: The Ld. DR supported the orders of the Ld. AO and the Ld. CIT(A)/NFAC, implying the transaction was not genuine.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 143(3),Section 144B,Section 10(38),Section 68,Section 115BBE,Section 69C,Section 151(1)(ii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE

Before: SHRI R.K.PANDA

For Appellant: Shri Nikhil S. Pathak
For Respondent: Shri Sandeep Sathe, JCIT
Hearing: 29.07.2026Pronounced: 23.09.2026

PER ASTHA CHANDRA, JM:

The appeal filed by the assessee is directed against the order dated 28.02.2026 respectively of the Ld. Commissioner of Income Tax- Appeals, NFAC, Delhi (“CIT(A)/NFAC) pertaining to Assessment Year (“AY”) 2018-19. 2. Briefly stated, the facts of the case are that the assessee is an individual. For AY 2018-19, the assessee filed her return of income on 26.09.2018 declaring total income of Rs.30,30,283/-. Based on the information available with the Department that the assessee is a 2 beneficiary of long term capital gain/loss or short term capital gain/loss and has received Rs.28,29,990/- during the AY 2018-19, the ca

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →