Case Law Details
Govintharaj Balakrishnan Vs ITO (ITAT Chennai)
PCIT Approval Not Enough After 3 Years: Section 151 Is Not Empty Formality: Jurisdictional Lapse Fatal
In Govintharaj Balakrishnan Vs. ITO, Ward-1, Virudhunagar, ITA No.2780/Chny/2025, AY 2018-19, order dated 31.12.2025, Chennai ITAT allowed Assessee’s appeal & quashed reassessment proceedings on jurisdictional ground. Assessee had originally filed return declaring salary income of ₹1.92 lakh. AO reopened assessment on account of alleged unexplained cash deposits of ₹51.63 lakh in a cooperative bank & completed reassessment u/s 147 r.w.s. 144B, making full addition, which was confirmed by CIT(A).
Before Tribunal, Assessee raised an additional legal ground contending that reopening was bad for lack of valid sanction u/s 151. Tribunal noted that reopening was initiated after three years from end of AY 2018-19, for which mandatory approval of PCCIT/PDG was required under section 151(ii). However, AO had obtained approval only from PCIT, Madurai-1, which was not the competent authority. Tribunal held that sanction by wrong authority strikes at the root of jurisdiction & renders notice u/s 148 invalid. Consequently, reassessment was held bad in law & quashed, making other grounds academic.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal filed by the assessee is directed against the order dated 02.09.2025 the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2018-19.
2. It is noted that the assessee filed his return of income for the AY 2018-19 on 25.06.2018 admitting salary income at ₹.1,92,000/-. The Assessing Officer noted that the assessee made cash deposit of ₹.51,63,650/- in M/s. Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. SRMUCS branch. By following the procedure, the Assessing Officer issued notice under section 148 of the Income Tax Act, 1961 [“Act” in short] dated 12.04.2022 along with order under section 148A(d)(1) of the Act. In response to the notice, the assessee filed return of income admitting total income at ₹.4,22,140/-. Thereafter, the Assessing Officer issued notices under section 142(1)/ show-cause notices, but, however, there was no response from the assessee to substantiate the cash deposit with supporting documentary evidence and in the absence of valid return, the Assessing Officer completed the assessment under section 147 r.w.s. 144B of the Act dated 26.02.2024 adding the cash deposits of ₹.51,63,650/- to the total income of the assessee. The ld. CIT(A) confirmed the addition made by the Assessing Officer.
3. The ld. AR Shri G. Akash, Advocate requested to take up additional ground No. 3 and submits that it is a legal ground requiring examination of facts of the case and thus, the additional ground No. 3 is taken up for hearing as preliminary issue for adjudication and the same reads as under:
3. The CIT(A) ought to have quashed the order of assessment as the AO had not obtained approval as per section 151 of the Act.
4. The ld. DR Ms. Latchana, JCIT supported the orders of authorities below.
5. Heard both the parties and perused the material available on record. We find the year under consideration is AY 2018-19 and the end of assessment year is 31.03.2019. In the present case, the contention of the ld. AR is that the approval obtained by the Assessing Officer is not correct as required under section 151 of the Act. We find the Assessing Officer reopened the assessment after 3 years from the end of the AY which requires approval under section 151 of the Act from the PCCIT, but, in the present case, the Assessing Officer obtained approval from the PCIT, Madurai-1, which is clear from page 3 of the paper book, wherein, the Assessing Officer issued notice under section 148 of the Act by mentioning vide para 3 of the said notice that the said notice is being issued after obtaining prior approval of the PCIT, Madurai-1 accorded on 11.04.2022 vide Reference No. 141/PCIT/MDU-1/2021-22. Therefore, it is clear that the Assessing Officer reopened the assessment for AY 2018-19 after 3 years from the end of the AY. Therefore, the legal requirement of prior approval under section 151(ii) of the Act is required to be obtained from Principal Chief Commissioner or Principal Director General, if more than three years have elapsed from the end of the relevant assessment year. Therefore, we note that the reopening assessment vide notice under section 148 of the Act is bad in law and the reassessment made thereon is quashed for not obtaining prior approval from the proper competent authority as required under law. Thus, the additional ground No. 3 raised by the assessee is allowed and other additional grounds and grounds raised in Form 36 become academic requiring no adjudication.
6. In the result, the appeal filed by the assessee is allowed.
Order pronounced on 31st December, 2025 at Chennai.
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