INCOME TAX OFFICER WARD 24(2)(1),MUMBAI, PIRAMAL CHAMBERS, LALBAUG vs. HOMEWELL REALTY LLP, ANDHERI, MUMBAI

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ITA 1684/MUM/2025Status: DisposedITAT Mumbai19 May 2025AY 2017-1813 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the CIT(A) was correct in quashing the reassessment order. The Tribunal noted that the CIT(A) had extensively considered the Supreme Court's decision in Rajiv Bansal. The key issue was the validity of the sanction under section 151 of the Act. The Tribunal found that since the order under section 148A(d) and the notice under section 148 were issued on 23.07.2022, which was after three years from the end of AY 2017-18 (31.03.2021), the specified authority for granting sanction, as per section 151(ii) of the Act, should have been the Principal Chief Commissioner or Chief Commissioner (Pr.CCIT/CCIT). However, the prior approval was obtained from the Pr. Commissioner of Income-tax-20, Mumbai, which was not the appropriate authority under section 151(ii). The Tribunal rejected the Revenue's contention that the notice was issued within the 'surviving period' and was valid. The Tribunal found that the sanctioning authority was not in accordance with the provisions of section 151(ii). Therefore, the notice under section 148 was invalid, and the consequent reassessment order under section 147 was quashed. Other grounds of appeal were rendered academic. The Tribunal relied on the decision of the Supreme Court in Rajiv Bansal and a coordinate bench decision in Assistant Commissioner of Income Tax vs Munish Financial, Mumbai.

What were the facts?

The Revenue is in appeal against the order of the CIT(A) dated 10.01.2025, which quashed the reassessment order passed under section 147 read with section 144B of the Income-tax Act, 1961, for Assessment Year 2017-18. The original return declared Nil income. The Assessing Officer (AO) reopened the assessment based on information from the Investigation Wing regarding bogus loan entries from Aneri Fincap Ltd. The reassessment order made additions of Rs 3.50 crore under section 68 and Rs 4,76,712/- for disallowance of interest. The assessee challenged the validity of the reopening on legal grounds, specifically the lack of prior approval from the 'specified authority' as required by section 151 of the Act. The CIT(A) found the notice under section 148 to be invalid.

What were the issues?

1. Whether, on the facts and in law, the CIT(A) erred in holding the notice under section 148 of the Act as invalid and the reassessment proceedings under section 147 as void-ab-initio, without appreciating that the order passed under section 148A(d) and notice under section 148 issued on 23.07.2022 were within the 'surviving period' as per the Supreme Court's decision in Union of India & Ors. Vs Rajiv Bansal. 2. Whether, on the facts and in law, the CIT(A) erred in holding that the specified authority to grant sanction for the order under section 148A(d) and notice under section 148 should be Pr.CCIT/CCIT and not PCIT, considering the 'surviving period'. 3. Whether, on the facts and in law, the CIT(A) erred in holding that the impugned notice was issued without obtaining prior approval of the specified authority as required by section 151 of the Act, and that the AO lacked jurisdiction, despite prior approval of PCIT-20, Mumbai being obtained. Assessee's contentions: The assessee argued that since more than three years had elapsed from the end of AY 2017-18 (i.e., 31.03.2021), the notice under section 148A(d) and section 148, issued on 23.07.2022, required prior sanction from Pr.CCIT/CCIT as per section 151(ii) of the Act. The sanction obtained from PCIT-20, Mumbai, was from an inappropriate authority, rendering the notice and subsequent assessment order void-ab-initio. Reliance was placed on Siemens Financial Services (P.) Ltd. vs. DCIT, Kiran Agarwal vs. ITO, and Maruti Clean Coal & Power Ltd. vs. ACIT. Revenue's contentions: The Revenue contended that the notice under section 148 was issued within the 'surviving period' and was therefore valid, with the approval of the specified authority under section 151(i) being extended till 30.06.2021 as per the Supreme Court's decision in Rajiv Bansal.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 148,Section 148A,Section 151,Section 68,Section 149(1)(a)

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Before: SHRI SANDEEP GOSAIN & SHRI PRABHASH SHANKAR

For Appellant: Shri Satish Mody, AR
For Respondent: Shri Hemanshu Joshi (Sr. DR)
Hearing: 13.05.2025Pronounced: 19.05.2025

आदेश की प्रयियलयि अग्रेयिि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent.

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