JD Jewellers Vs ITO (ITAT Delhi)
Reassessment Quashed – Approval Taken From Wrong Authority u/s 151; Beyond 3 Years Requires PCCIT Sanction
The Assessee challenged reopening u/s 147 r.w.s.144B on the jurisdictional ground that sanction u/s 151 was wrongly obtained from PCIT instead of PCCIT. The record (page 2 of order) shows that reassessment for AY 2017-18 was initiated on 21.07.2022, clearly beyond 3 years from the end of the relevant AY. As per the amended section 151, where reopening is beyond 3 years, the specified sanctioning authority is PCCIT. However, AO obtained sanction only from PCIT, as reflected in the 148 approval order.
Tribunal noted that this defect goes to the root of jurisdiction & renders the entire reassessment invalid. Reliance was placed on the binding judgment of Hon’ble Delhi High Court in Kids Dream International Pvt. Ltd. Vs ACIT (W.P.(C) 2814/2023, dated 24.02.2025), wherein the Court held that sanction by PCIT instead of PCCIT in cases of reopening beyond 3 years is non est, even after considering TOLA & subsequent jurisprudence. ITAT also referred to the Delhi High Court’s earlier ruling in Abhinav Jindal HUF, which clarified that TOLA has no bearing on determining the “competent authority” for sanction u/s 151.
The High Court had categorically held that where the statute prescribes PCCIT as the sanctioning authority, any sanction by PCIT is void & the entire 148A(d) / 148 proceedings must be quashed. Applying this ratio, Tribunal held that the sanction in Assessee’s case was obtained from the wrong authority & therefore the entire reassessment stands vitiated in law.
Consequently, Tribunal quashed the reassessment proceedings in toto. Since jurisdiction itself failed, all other grounds on merits were left open.
The appeal of the Assessee was allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
