DEPUTY COMMISIONER OF INCOME TAX CIRCLE 3(1)(1) , AHMEDABAD vs. CHINTAN KANAIYALAL SHAH, AHMEDABAD

ITA 1713/AHD/2025Status: DisposedITAT Ahmedabad06 October 2026AY 2017-1815 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the approval granted by the Principal Commissioner of Income Tax (Pr. CIT) for the issuance of the notice under Section 148 dated 31.08.2022 was valid. Following the jurisdictional Gujarat High Court's decision in Dhanraj Govindram Kella, which interpreted the Supreme Court's decision in UOI v. Rajeev Bansal, it was concluded that the Pr. CIT was the competent authority under Section 151(i) of the Act for issuing the order under Section 148A(d) and the notice under Section 148 for AY 2017-18. Thus, the CIT(A)'s finding on this issue was set aside, and the Revenue's ground was allowed. Regarding the issue of the notice being beyond the surviving period, the Tribunal found that compliance was completed only on 26.07.2022 after the assessee requested an extension and personal hearing. Therefore, the notice dated 31.08.2022 was issued within the surviving period, and the assessee's objection was rejected. The Revenue's ground was allowed. Since the CIT(A) had not adjudicated the grounds on merits, the Tribunal set aside the matter to the CIT(A) for adjudication on merits, allowing the Revenue's grounds for statistical purposes. The cross-objection filed by the assessee was dismissed.

What were the facts?

The Revenue filed an appeal before the ITAT against the order of the CIT(A) for Assessment Year 2017-18, which had quashed reassessment proceedings initiated under Section 147 r.w.s. 144B of the Income Tax Act. The assessee had filed a cross-objection supporting the CIT(A)'s order. The original return declared an income of Rs. 7,24,850/-. The case was reopened based on information of cash deposits of Rs. 91,00,000/-. The Assessing Officer (AO) made additions of Rs. 91,00,000/- for unexplained cash deposits and Rs. 4,04,14,631/- for unexplained loans, completing the assessment at Rs. 5,02,39,481/-. The CIT(A) quashed the proceedings, holding that approval for the notice under Section 148 was not obtained from the competent authority. The Revenue's appeal was delayed by 97 days, which was condoned.

What were the issues?

1. Whether the reassessment proceedings initiated under Section 147 r.w.s. 144B were valid, specifically concerning the approval for the notice under Section 148 dated 31.08.2022, and whether the Principal Commissioner of Income Tax (Pr. CIT) was the competent authority as per Section 151(ii) of the Act, or if the Principal Chief Commissioner of Income Tax (Pr. CCIT) was required, as held by the CIT(A) based on an interpretation of the Supreme Court's decision in UOI v. Rajeev Bansal and ITAT decisions, contrary to the Gujarat High Court's decision in Dhanraj Govindram Kella. 2. Whether the notice under Section 148 dated 31.08.2022 was issued within the 'surviving time' as computed under the directions of the Hon'ble Supreme Court in Rajeev Bansal, considering the original notice dated 30.04.2021, exclusions, and the period for compliance and personal hearing. 3. Whether the CIT(A) erred in quashing the entire reassessment without adjudicating the grounds on merits, particularly regarding the additions of Rs. 91,00,000/- under Section 69 and Rs. 4,04,14,631/- under Section 68. Assessee's contentions: The CIT(A)'s order quashing the reassessment is correct. The Pr. CCIT was the competent authority for approval, not the Pr. CIT, making the notice bad in law. The notice was also not issued within the surviving period. Revenue's contentions: The CIT(A) erred in holding that Pr. CCIT was the competent authority. The Gujarat High Court in Dhanraj Govindram Kella held Pr. CIT to be the competent authority. The notice was issued within the surviving period. The matter should be set aside to the CIT(A) for adjudication on merits.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 148,Section 148A,Section 151,Section 69,Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD

Before: SHRI SANJAY GARG & SHRI NARENDRA PRASAD SINHA

For Appellant: Shri M S Chhajed, AR
For Respondent: Shri Hrishikesh Hemant Patki, SR-DR
Hearing: 28.07.2026Pronounced: 06.10.2026

Heard together (2 matters)

ITA No. 1713/AHD/2025
CO No. 39/AHD/2026

Read from the judgment's own cause title. This page is filed under one of them.

PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:

This appeal is filed by the Revenue against the order of National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] dated 24.03.2025 for the Assessment Year (A.Y.) 2017-18 in the proceeding u/s 147 r.w.s. 144B of the Income Tax Act [hereinafter referred as “The Act”]. The Assessee has filed a cross-objection supporting the order of the Ld. CIT(A).

2.

There was delay of 97 days in filing of this appeal. A condonation application has been filed by the Assessing Officer (AO), explaining the reason for delay. It has been exp

The order continues below.

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