ARVINDBHAI KHATRI SONS DESIGNS PVT LTD, MUMBAI vs. ACIT-CIRCLE-4(1)(1), MUMBAI

Facts

The assessee challenged the reassessment proceedings for AY 2017-18, which were initiated due to alleged escaped assessment from substantial cash deposits. The primary contention was that the sanction for issuing the notice under section 148 was obtained from an incorrect authority, as more than three years had passed since the end of the assessment year.

Held

The Tribunal held that since more than three years had elapsed from the end of the assessment year, the sanction for issuing the notice under section 148 should have been obtained from a Principal Chief Commissioner (Pr. CCIT) or Chief Commissioner (CCIT), not a Principal Commissioner (Pr. CIT). Consequently, the notice was invalid and void ab initio.

Key Issues

Validity of reassessment proceedings due to incorrect sanction under Section 151 for issuing notice u/s 148, when the period exceeds three years from the end of the assessment year.