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Facts
The assessee's case was reopened beyond three years from the end of the relevant assessment year, with a notice issued under section 148. The sanction for this notice was obtained from the Ld. PCIT, Mumbai – 19, but not from the specified Sanctioning Authority under Section 151(ii) of the Act.
Held
The Tribunal held that the notice issued under section 148 and the subsequent assessment order under section 147, which included an addition for unexplained expenditure under section 69C, are liable to be quashed. This is due to the non-compliance with the provisions of section 151(ii) regarding the correct sanctioning authority, as supported by a jurisdictional High Court judgment.
Key Issues
Whether the notice under section 148 was validly issued without proper sanction from the prescribed authority under section 151(ii) for reopening a case beyond three years.
Sections Cited
148, 151(ii), 147, 69C, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “D”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI PRABHASH SHANKAR
O R D E R Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 24.02.2025, impugned herein, passed the Ld.
Commissioner of Income Tax (Appeals) – 47, Mumbai [in short R. Kothari & Co. Ld. Commissioner] u/s 250 of the Income Tax Act, 1961 [in short ‘the Act’] for the A.Y. 2018-19.
In the instant case, the case of the Assessee was reopened beyond a period of three years from the end of the relevant Assessment Year by issuing the notice dated 30.04.2022 u/s 148 of the Act, and taking sanction from the Ld. PCIT, Mumbai – 19 but not from the Sanctioning Authority i.e. Ld. Principle CCIT, as provided/specified in Section 151(ii) of the Act, and thus the notice dated 30.04.2022 u/s 148 of the Act, along with Assessment Order dated 08.03.2024 u/s 147 of the Act, by which the addition of Rs.38,00,773/- being unexplained expenditure u/s 69C of the Act has been made, is liable to be quashed in view of the said provisions of section 151(ii) of the Act and the judgment of the Hon’ble Jurisdictional High Court in the case of KPMGLLP Vs. Assistant Commissioner of Income-Tax, International Tax Circle 2(1)(2), Delhi and Ors., [Writ Petition (St) No.5390 of 2024 decided on 21.02.2024] wherein the Hon’ble High Court has also considered the Assessment Year 2018-19 itself as involved in the instant case and ultimately quashed the order and notices issued u/s 148A(d) and u/s 148 of the Act respectively.
As we have allowed the appeal of the Assessee on legal aspect and thus are not delving into other aspects of the case as adjudication of the same would prove to be futile exercise.
In the result, the appeal filed by the Assessee is allowed.