Kalpana Ramesh Jain Vs DCIT (ITAT Mumbai)
The assessee challenged reassessment for AYs 2015-16 to 2017-18 where alleged LTCG from Toyam Industries shares was treated as unexplained cash credit u/s 68. ITAT quashed reassessment across all three years primarily on jurisdictional defects including defective reasons, limitation issues and incorrect sanction authority.
For AY 2015-16 & 2016-17, Tribunal held that reopening was based on factually incorrect and contradictory reasons — AO wrongly treated assessee as accommodation entry provider while later treating her as beneficiary. Reasons also described assessee as a “company” instead of an individual, evidencing non-application of mind and borrowed satisfaction from investigation inputs. Since jurisdiction u/s 147 must rest on valid “reason to believe”, reassessment proceedings were quashed without examining merits.
For AY 2017-18, Tribunal found independent jurisdictional defects:
- Notice u/s 148 issued on 27.07.2022 was beyond surviving limitation period computed under Ashish Agarwal & Rajeev Bansal.
- Mandatory sanction u/s 151 was taken from PCIT instead of specified authority (PCCIT/CCIT) after expiry of three years, rendering reopening invalid.
Once jurisdiction failed, additions u/s 68 & 69C relating to alleged penny stock transactions were treated as academic and not adjudicated.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
These three appeals by the assessee are directed against three separate orders, passed by the Learned Commissioner of Income Tax(Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for Assessment Year (in short A.Y) 2015-16 to Assessment Year 2017-18 respectively. On merit common dispute is involved in these appeals and therefore same were heard together and disposed of by way of its consolidated order for sake of convenience.
