DEEPAK SHARMA,JAIPUR vs. ITO WARD 1(1), JAIPUR, JAIPUR

ITA 1321/JPR/2025Status: DisposedITAT Jaipur08 October 2026AY 2016-179 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed Ground No. 1, quashing the reassessment proceedings. It held that the sanction for reopening the assessment for AY 2016-17 was granted on 22.07.2022, and the order under section 148A(d) and notice under section 148 were issued on 25.07.2022. As per section 151 of the Act, since more than three years had elapsed from the end of AY 2016-17 (31.03.2017), the sanction ought to have been obtained from the Principal Chief Commissioner or Chief Commissioner (section 151(ii)). However, the sanction was granted by the Principal Commissioner (section 151(i)). The Tribunal noted that while the period of three years ended on 31.03.2020, which fell within the TOLA extension period allowing sanction up to 30.06.2021, the actual sanction and notice were issued much later on 25.07.2022. At that point, the higher authority under section 151(ii) was required. The Tribunal followed the decisions in Union of India v. Rajeev Bansal and Ramesh Bachulal Mehta v. ITO, holding that non-compliance with section 151 vitiates jurisdiction and cannot be cured under section 292B. Consequently, the reassessment order was quashed. As the reassessment was quashed on the issue of sanction, Ground No. 2 (merits of addition) and Ground No. 3 (interest) were rendered academic and not adjudicated. The contentions on these issues were left open.

What were the facts?

The assessee, Deepak Sharma, filed a return for AY 2016-17 declaring income of Rs 2,68,300. He sold a plot for Rs 3,51,000 on 04.09.2015, having purchased it for Rs 4,75,000 on 08.05.2015. A search in the Chandra Prakash Agarwal Group on 28.07.2016 led to the assessee being summoned. In a statement on 30.11.2016, he stated the plot was sold for Rs 17,25,000 (Rs 6,900 per sq yd), with Rs 3,51,000 by cheque and Rs 13,74,000 in cash. This led to reassessment proceedings. A notice under section 148 was issued on 23.04.2021, later treated as a show cause under section 148A(b) on 27.05.2022. The assessee replied on 13.06.2022, retracting his statement and objecting to the reopening. Approval under section 148A(d) was granted on 22.07.2022 by the Principal Commissioner, and an order under section 148A(d) and notice under section 148 were issued on 25.07.2022. The assessment order under section 147 was passed on 06.04.2023.

What were the issues?

1. Whether the reassessment proceedings initiated under section 147 read with section 148A and section 148 of the Income Tax Act, 1961, are illegal and bad in law for want of proper jurisdiction, satisfaction, approval, and being barred by limitation, particularly concerning a third-party search case prior to 01.04.2021. - Assessee's contention: The reassessment is illegal due to lack of jurisdiction, proper satisfaction, approval, and being barred by limitation. Specifically, the sanction under section 151 was granted by the Principal Commissioner, whereas more than three years had elapsed from the end of AY 2016-17, requiring sanction from the Principal Chief Commissioner or Chief Commissioner under section 151(ii). Reliance was placed on Blackstone Overseas (P.) Ltd. v. ITO and Hiteshkumar Poptabhai Borad v. ACIT. - Revenue's contention: The revenue relied on the orders of the Assessing Officer and the learned CIT(A). 2. Whether the addition of Rs 12,48,100 on account of alleged Short Term Capital Gain, by taking the sale consideration at Rs 17,25,000 instead of Rs 3,51,000, is illegal and bad in law. - Assessee's contention: The addition is illegal as the AO and CIT(A) erred in not considering the actual sale consideration of Rs 3,51,000 and other vital facts. The addition is contrary to facts and law. - Revenue's contention: Not recorded. 3. Whether the interest charged under sections 234A, 234B, and 234C is illegal and contrary to law.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 148A,Section 148,Section 131,Section 151,Section 234A,Section 234B,Section 234C,Section 292B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, JAIPUR

Before: Shri Kuldip Singh & Shri Prakash

PER : PRAKASH, ACCOUNTANT MEMBER:-

1.

This appeal by the Assessee is directed against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as "the learned CIT(A)"] dated 30.07.2025 arising out of the assessment order dated 06.04.2023 passed by the Assessing Officer (hereinafter referred to as "the AO") under section 147 read with section 144 and section 144B of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for the Assessment Year 2016-17. Deepak Sharma

2.

The grounds of appeal raised by the Assessee before us in the memorandum of appeal in Form No. 36 read as under:

"

1.

The impugned or

The order continues below.

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