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Facts
The assessee's appeal was filed against an order related to an assessment initiated under Section 147 read with Section 143(3) of the Income Tax Act, 1961. The appeal was found to be barred by limitation, but the delay was condoned due to a genuine explanation.
Held
The Tribunal held that the approval for initiating proceedings under Section 148 of the Act showed inconsistencies and indicated a non-application of mind by the authorities. The wrong explanation to Section 147 was applied, vitiating the entire proceedings.
Key Issues
Whether the initiation of proceedings under Section 147 of the Income Tax Act was vitiated due to the incorrect application of explanations and non-application of mind by the assessing and reviewing authorities.
Sections Cited
147, 143(3), 148, 151
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH‘A’: NEW DELHI
Before: MS. MADHUMITA ROY
Assessee by Shri S.K. Gupta, CA Department by ShriRavi Kant Choudhary, Sr. DR Date of Hearing 11/03/2026 Date of Pronouncement 13/03/2026 ORDER
PER MADHUMITA ROY, JM:
The instant appeal filed by the assessee is directed against the order dated 05.09.2023 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), [hereinafter referred to as ‘the Ld. CIT(A)] against the assessment order passed u/s 147 r. w. section 143(3) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) for Assessment Year 2012-13.
The appeal filed by the assess is found to be barred by limitation in support of which an application for condonation has been filed. Having regard to the explanation rendered by the assessee in support of the delay which since to be genuine, the delay is condoned.
Bhageria Finance & Investment Pvt. Ltd. vs. ITO 3. It is the case of the assessee that approval under Section 151 of the Act shows certain inconsistencies indicating non-application of mind by both the authorities below. According to the assessee the form for recording the reasons for initiating the proceedings under Section 148 of the Act. Explanation -2(b) to section 147 of the Act is applied whereas Item 9 of the said form speaks of assessment having been completed under Section 143(3) of the Act on 31.10.2014. Considering this fact the correct Expiation 2(b) to Section 147 is not applicable rather Explanation 2 (c) is the correct provision which ought to have been applied by recording reasons for initiation proceedings u/s 148 of the Act. Under this circumstance, the Ld. Assessing Officer needs to verify the assessment records and thereafter make out of case of either of under assessment of income, assessment at too low a rate, subject of excessive relief, excessive loss or depreciation allowance or any other allowance. Thus, invocation of wrong explanation clearly shows that both the authorities have acted in a very casual manner in satisfying the statuary precondition envisaged in the Act which vitiates the entire proceedings and thus, liable to be quashed as void ab initio as was the crux of submissions of the Learned AR. In this regard he has referred the reason so recorded for obtaining the approval of the Learned PCIT appearing from pages 32 to 5 6 of the PB filed before us. Such submissions made by the Ld. AR has not been able to be controverted by the Ld. DR.
Upon perusal of the reason recorded it is found that the submission is acceptable; in fact, these glaring mistakes would have been pointed out either at the level of the Ld. Addl. CIT who have recommended the Section or at least by the Ld. PCIT who ultimately granted the sanction. The challenged before us by the assessee on this jurisdictional issue in our considered opinion under the present facts and circumstances is found to be acceptable.
Bhageria Finance & Investment Pvt. Ltd. vs. ITO 5. Under these facts and circumstances of the matter when the initiation is found to be made upon wrong application of the provisions of law, the entire proceeding is vitiated and thus quashed.