Arvindbhai Khatri Sons Designs Private Limited Vs ACIT (ITAT Mumbai)
The appeal arose from the appellate order dated 18.08.2025 passed by the Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi, in relation to reassessment proceedings under sections 147 read with 144 of the Income-tax Act, 1961 for Assessment Year 2017-18. The reassessment order dated 29.05.2023 was challenged by the assessee.
The assessee had originally filed its return of income declaring total income of Rs. 75,15,530. Subsequently, the Assessing Officer (AO) received information regarding substantial cash deposits of Rs. 4,09,89,250 in the assessee’s bank account. The AO treated the same as income escaping assessment under sections 147/148. An order under section 148A(d) was passed on 29.07.2022 and the assessment was reopened under section 148 on 29.07.2022 after obtaining approval from the Principal Commissioner of Income Tax-4, Mumbai.
The assessee raised multiple grounds challenging both the legality of the reassessment and the additions on merits. On the legal issue, the assessee contended that the reassessment proceedings were invalid due to incorrect sanction under section 151 of the Act. It was argued that the notice under section 148 was issued beyond three years from the end of the relevant assessment year and therefore required approval from the Principal Chief Commissioner of Income Tax (Pr. CCIT) or equivalent higher authority, as mandated under section 151(ii). However, the sanction was obtained from the Principal Commissioner of Income Tax (Pr. CIT).
