Galax Minerals Pvt Ltd Vs ITO (ITAT Delhi)
Reassessment Quashed for Invalid Approval under Section 151; PCIT Approval Held Incompetent Post-2021 Regime
The Delhi Bench of the ITAT allowed the appeal of Galax Minerals (P) Ltd. for AY 2017-18 and quashed the reassessment proceedings in entirety on the ground of invalid statutory approval under section 151.
The Tribunal noted that the notice under section 148 (preceded by order under section 148A(d)) was issued after three years from the end of the relevant assessment year, thereby attracting the new reassessment regime introduced by the Finance Act, 2021. As per the amended section 151, prior approval was mandatorily required from the Principal Chief Commissioner of Income Tax (PCCIT) / Principal Director General, and not from the Principal Commissioner of Income Tax (PCIT).
On facts, the approval for reopening was admittedly granted by the PCIT, which the Tribunal held to be an incompetent authority under the new regime. Relying squarely on the Supreme Court judgment in Union of India v. Rajeev Bansal, the ITAT reiterated that even in cases covered by Ashish Agarwal, the requirement of obtaining proper approval under section 151 was never waived.
Since the foundational jurisdictional requirement was not met, the entire reassessment proceedings were held to be void ab initio. Once the reassessment was quashed on this legal issue, the Tribunal did not examine the additions on merits.
Accordingly, the reassessment order was set aside and quashed, and the appeal was allowed in full.
FULL TEXT OF THE ORDER OF ITAT DELHI
