Pradip Kumar Roy Vs ITO (ITAT Bangalore)
The Bangalore ‘C’ Bench of the Income Tax Appellate Tribunal, Bangalore Bench allowed the appeal of Shri Rahul Meka for AY 2016-17 and quashed the reassessment proceedings, holding that the sanction obtained for reopening was from an incorrect authority, thereby rendering the notice u/s 148 and consequent assessment void ab initio.
The assessee, a non-resident, had originally declared income of ₹15,850, but the AO reopened the case and made additions including ₹47 lakh u/s 68 and ₹28.53 lakh LTCG with denial of exemption u/s 54F. The Tribunal first admitted additional legal grounds, noting that jurisdictional issues can be raised at any stage when facts are already on record.
On legal validity of reopening, the ITAT held:
- Under the post-Finance Act, 2021 regime, sanction u/s 151 depends on the time elapsed from the end of the relevant AY.
- For AY 2016-17, more than three years had elapsed when order u/s 148A(d) and notice u/s 148 were issued on 29.07.2022.
- Therefore, approval was required from PCCIT/PDGIT/CCIT/DGIT (higher authority) under section 151(ii), but sanction was taken only from PCIT, which is insufficient.
- Following SC ruling in Union of India v. Rajeev Bansal and Bombay HC decision in Ramesh Bachulal Mehta, such defect goes to jurisdiction and invalidates the entire reopening.
The Tribunal rejected the Revenue’s argument regarding exclusion of time under amended provisos, holding that law applicable on the date of issuance must govern validity.
Accordingly, the ITAT quashed the order u/s 148A(d), notice u/s 148, and reassessment order u/s 147 r.w.s. 144C(13). Since the legal ground succeeded, other additions on merits were not adjudicated.
Result: Assessee’s appeal allowed in full; reassessment proceedings annulled
FULL TEXT OF THE ORDER OF ITAT BANGALORE
