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Facts
The assessee's case was reopened under Section 148 for AY 2016-17 due to suspicious transactions, leading to an addition of Rs. 79,00,000/- as unexplained cash credit from the sale of shares. The Ld. CIT(A) dismissed the assessee's appeal.
Held
The Tribunal ruled that the reassessment notice issued under Section 148 was invalid because the required approval under Section 151 for reopening after three years was obtained from the Pr.CIT instead of the Pr.CCIT, as mandated by law and Supreme Court precedents. Consequently, the entire reassessment proceeding was quashed.
Key Issues
Whether reassessment proceedings initiated under Section 148 are valid if the approval under Section 151 for reopening beyond three years is obtained from Pr.CIT instead of Pr.CCIT.
Sections Cited
148, 151
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Income Tax Appellate Tribunal, “C” BENCH, KOLKATA
Before: SHRI RAJESH KUMAR & SHRI PRADIP KUMAR CHOUBEY
O R D E R
Per Rajesh Kumar, AM :
This is an appeal filed by the assessee against the order dated 18.06.2024, passed by the ld. CIT(A), National Faceless Appeal Centre, Delhi, for the assessment year 2016-2017.
At the time of hearing, the ld. Counsel of the assessee raised the legal issue that the proceedings initiated u/s.148 of the Act is invalid and void ab initio as the same is based upon the invalid approval granted u/s.151 of the Act.
Facts in brief are that the case of the assessee was selected for scrutiny after Assessing Officer received information that the assessee has entered into suspicious transaction during the year. The notice u/s.148 of the Act was issued on 30.07.2022 and in para No.3 it is mentioned that the notice issued after obtaining prior approval of Pr.CIT- 2, Kolkata on 28.07.2022. The Assessing Officer finally passed the assessment order after calling information from the assessee by making addition of Rs.79,00,000/- on account of unexplained cash credit which represented the cash consideration received by the assessee during the year from sale of shares. Ld.CIT(A) dismissed the appeal of the assessee and, hence, the assessee is in appeal before us.
After hearing the rival contentions and perusing the material available on record, we find that admittedly, the case of the assessee has been reopened after a period of three years from the end of the assessment year and, therefore, the sanction of ld. Pr.CCIT has to be obtained for issuing notice u/s.148 of the Act and not the ld. Pr.CIT whose approval to be obtained for issuance of notice, therefore, the reopening of the assessment on the basis of the said notice is not sustainable in the eyes of law. The issue is no more res integra, as the Hon’ble Supreme Court in the case of Rajeev Bansal, reported in 469 ITR 46 (SC) has held vide para 114(d) that it is the Pr.CCIT who should grant sanction u/s.151 of the Act since the reopening is after three years. We also note that the said decision of the Hon’ble Apex Court has been followed in series of decisions by the various Tribunal and Hon’ble High Courts. Some of the decisions wherein the decision of the Hon’ble Supreme Court has been followed, as under :- i) Shri Devang Ajit Jhaveri, dated 29.01.2025 (AY : 2016-2017); ii) Sakshi Ratneshchand Jain, ITA No.1741/Mum/2024, dated 10.02.2025 (AY : 2016-2017); iii) Kusum Healthcare Pvt. Ltd., order dated 05.03.2025 (AY: 2016- 2017)(Delhi High Court); iv) Chandrakant Viththal Bhopi, ITA No.2405/Pune/2024, dated 07.05.2025 (AY : 2016-2017).