KISHORBHAI C BHAGTANI,RAJKOT vs. INCOME TAX OFFICER WARD 2(1)(1), RAJKOT

ITA 999/RJT/2026Status: DisposedITAT Rajkot09 October 2026AY 2020-2112 pages
AI SummaryAllowed

What were the facts?

The assessee, Kishorbhai C Bhagtani, filed an appeal before the ITAT, Rajkot, challenging the assessment year 2020-21 order passed by the NFAC, Delhi (CIT(A)). This order confirmed an assessment order passed by the Assessing Officer (AO) under Section 147 of the Income-tax Act, 1961. The AO's order was dated 15.03.2025. The assessee's grounds of appeal challenged the validity of the reopening of assessment, the addition of Rs. 30,00,000/- under Section 69, and the applicability of Section 115BBE. The procedural history involves the AO issuing a notice under Section 147, which the assessee contended was based on a defective approval under Section 151.

What did the Tribunal hold?

The Tribunal allowed the appeal of the assessee. The primary issue addressed was the validity of the reopening of assessment under Section 147, which was challenged due to a defective approval under Section 151. The Tribunal noted that the approval under Section 151 was neither digitally nor manually signed. Following the coordinate bench's decision in M/s Aditya Plastic (ITA No. 185/Rjt/2024) and the Allahabad High Court's ruling in Vikas Gupta, the Tribunal held that the reassessment proceedings initiated based on a defective approval under Section 151 are bad in law and without jurisdiction. Consequently, the assessment order framed by the AO was quashed. As the reassessment itself was quashed, all other issues concerning the merits of the additions under Section 69 and the applicability of Section 115BBE were rendered academic and infructuous. The ratio decidendi is that a reassessment initiated without a validly obtained approval under Section 151, which requires a signature (digital or manual), is void ab initio.

What were the issues?

The Tribunal had to decide the following questions: 1. Whether the reopening of assessment under Section 147 of the Act is valid, lawful, and within jurisdiction, as contended by the assessee, or if it is bad in law and liable to be quashed, as argued by the assessee. The revenue relied on the findings of the Assessing Officer. 2. Whether the addition of Rs. 30,00,000/- under Section 69 of the Act is sustainable, with the assessee arguing it was made without cogent material, evidence, or an opportunity for cross-examination, and the revenue relying on the AO's findings. 3. Whether Section 115BBE of the Act is applicable, with the assessee challenging its applicability and the revenue relying on the AO's findings. The primary contention of the assessee was that the approval under Section 151 of the Act for reopening the assessment was defective as it was neither digitally nor manually signed, rendering the reassessment proceedings invalid. The assessee relied on the ITAT Rajkot's decision in M/s Aditya Plastic (ITA No. 185/Rjt/2024) and the Allahabad High Court's judgment in Vikas Gupta. The revenue, represented by the Ld. Sr. DR, relied on the Assessing Officer's findings.

Which sections of the Income-tax Act were involved?

Section 147,Section 250,Section 69,Section 115BBE,Section 151,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC”

Before: Dr. Arjun Lal Saini

For Respondent: Shri Shishir Kumar, Ld. Sr. DR
Hearing: 30/09/2026Pronounced: 09/10/2026

Per, Dr. Arjun Lal Saini, AM : Captioned appeal filed by the assessee, pertaining to assessment year 2020-21, is directed against the order passed under Section-250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 23.06.2026 by the National Faceless Appeal Centre (NFAC), Delhi/ Commissioner of Income Tax (Appeals) [in short ‘Ld. CIT(A)’], which in turn arises out of an assessment order passed by the Assessing Off

The order continues below.

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