KIPPY ENGINEERING PVT. LTD.,KOLKATA vs. ACIT, CC - 3(4), KOLKATA

ITA 2727/KOL/2025Status: DisposedITAT Kolkata17 February 2026AY 2012-201312 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the approval granted by the PCIT for the issuance of notice under Section 148 of the Act was not valid. The Tribunal noted that the PCIT's approval was recorded as 'Yes, I am satisfied, May be reopened'. This was considered a mechanical approval without an independent application of mind, which is contrary to the mandate of Section 151 of the Act. The Tribunal distinguished the revenue's reliance on Meenakshi Overseas Pvt. Ltd. by noting that in that case, the satisfaction was more explicitly stated, and the Additional CIT had issued a letter detailing the consideration of reasons. The Tribunal also referred to the Madhya Pradesh High Court's decision in CIT Jabalpur vs. S. Goyanka Lime & Chemicals Ltd., where a similar mechanical approval was held unsustainable, and this decision was upheld by the Supreme Court. Therefore, the Tribunal concluded that the expression 'Yes' alone does not reflect an independent application of mind and is not a valid approval. Consequently, the impugned notice under Section 148 and the subsequent assessment order under Section 143(3) read with Section 147 were quashed on the ground of invalid approval.

What were the facts?

The assessee, Kippy Engineering Pvt. Ltd., filed its return of income for Assessment Year 2012-13 on 30.09.2012, declaring a total income of ₹30,37,680/-. The return was processed under Section 143(1). Subsequently, the Assessing Officer (AO) reopened the assessment under Section 147 by issuing a notice under Section 148 on 14.03.2019. The assessee complied by filing a revised return on 28.06.2019. The AO made an addition of ₹2,00,00,000/- under Section 68 for unexplained income/credit. The assessee appealed to the National Faceless Appeal Centre (NFAC), Delhi, challenging the validity of the reopening. The NFAC dismissed the appeal, upholding the reopening. The assessee has now appealed to the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the reassessment order dated 17.12.2019 passed under Section 143(3) read with Section 147 of the Income Tax Act, 1961, for AY 2012-13 is without jurisdiction, illegal, invalid, and bad in law, specifically concerning the initiation of reassessment proceedings vide notice dated 14.03.2019 under Section 148 and the validity of the mandatory approval obtained under Section 151 of the Act. Assessee's Contentions: The assessee argued that the reassessment proceedings were wrongly initiated. The approval granted by the Principal Commissioner of Income Tax (PCIT) under Section 151 was invalid because the sanctioning authority did not apply its mind, rendering the approval mechanical. The assessee relied on the decisions in Capital Broadways Pvt. Ltd. Vs. ITO and Central India Electric Supply. Revenue's Contentions: The revenue contended that the department follows an administrative hierarchy where files are moved with all details for approval. The higher-ups grant approval after perusing the notings and explanations. In this case, the PCIT granted approval after perusing the detailed notings and being satisfied, which was a token of approval for reopening. The revenue relied on the decision in Meenakshi Overseas Pvt. Ltd.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 143(3),Section 147,Section 148,Section 151,Section 68,Section 92E,Section 150(1),Section 150(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM & SHRI PRADIP KUMAR CHOUBEY, JM

For Appellant: Shri Ratan Kumar Goel &
For Respondent: Shri Monalisa Pal Mukherjee, DR
Hearing: 29.01.2026Pronounced: 17.02.2026

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 27.08.2025 for the AY 2012-13. 2. At the time of hearing, the assessee raised additional ground which is extracted below:

“(a) That the impugned reassessment order dated 17.12.2019 passed u/s. 143(3) read with section 147 of the act that in the case of the assessee for the reassessment year 2012-13 is without juri iction, illegal, invalid and bad in law. The reassessment proceedings were wrongly initiated vide notice dated 14.0

The order continues below.

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