DCIT Vs Bhavik Prafulchandra Vora (ITAT Mumbai)
Reassessment Notice U/s 148 Quashed for Wrong Sanction & Limitation Breach – Non-Compliance with Sec.151 under New Regime – ITAT Mumbai
The Tribunal examined the validity of reassessment proceedings initiated under the new regime of sections 148A & 151 where the AO alleged escaped income of ₹10.25 lakh relating to stock option transactions. The assessee challenged the jurisdiction itself through cross-objection, contending that the notice u/s 148 issued on 30.07.2022 was beyond three years and approved by an incorrect authority.
Relying extensively on the Supreme Court ruling in Union of India v. Rajeev Bansal (extract discussed around pages 6–8 explaining sanction hierarchy under old vs new regime), ITAT held that under the amended law, if reopening is beyond three years, sanction must be obtained from higher authorities such as Principal Chief Commissioner/Chief Commissioner. In the present case, approval was granted only by the Principal Commissioner and the alleged escaped income was below ₹50 lakh; therefore, issuance of notice itself was barred by limitation and violated section 151.
Consequently, the Tribunal quashed the reassessment notice and entire proceedings, holding them void ab initio. Since jurisdiction itself failed, issues on merits became academic; Revenue’s appeal was dismissed while assessee’s cross-objection was partly allowed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
