Smurti Waghdhare Vs DCIT (ITAT Chennai)
In this case, the reassessment was initiated based on cash deposits and withdrawals, with the AO treating the entire amounts as unexplained u/s 69A.
Before the ITAT, the assessee raised a jurisdictional challenge:
- The notice u/s 148 was issued beyond 3 years from the end of the relevant AY,
- However, approval was obtained from PCIT instead of PCCIT, as required under section 151(1)(ii).
The Tribunal held:
- The correct sanctioning authority depends on timing of the 148 notice-not 148A(b).
- Even if 148A(b) notice was within 3 years, 148 notice issued after 3 years requires PCCIT approval.
- Approval from the wrong authority is a fatal jurisdictional defect.
Further, the ITAT clarified:
- Approval for 148A(b) cannot substitute approval required for 148 notice.
- Amendment by Finance Act 2023 (regarding exclusion of time) is prospective and not applicable.
- Relied on Madras HC (Core Logistic) and Bombay HC (Vodafone Idea) supporting strict compliance.
Accordingly, the Tribunal:
- Held the 148 notice invalid,
- Quashed the entire reassessment proceedings, and
- Allowed the appeal.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, (in short “CIT(A)”) passed u/s. 250 of the Income Tax Act, 1961 (in short “the Act”) dated 13.11.2025 for Assessment Year (AY) 2018-19.
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