ITO Vs Vinod Bhanji Shah (ITAT Mumbai)
The Mumbai ITAT quashed reassessment proceedings on the ground that mandatory approval under Section 151 was obtained from the wrong authority, rendering the notice issued under Section 148 invalid.
The Tribunal observed that since more than three years had elapsed from the end of the relevant assessment year (AY 2017–18), approval ought to have been obtained from the higher authority (PCIT/CCIT level as prescribed under Section 151(ii)). However, in the present case, approval was taken from an incorrect authority, which is a jurisdictional defect.
Relying on the Bombay High Court ruling in Alag Property Construction Pvt. Ltd. and the Supreme Court decision in Rajeev Bansal, the ITAT held that proper sanction is a pre-condition for assuming jurisdiction under Section 148, and non-compliance vitiates the entire proceedings.
Accordingly, the Tribunal quashed the notice issued under Section 148, the order under Section 148A(d), and the consequent assessment order, rendering the Revenue’s appeal on merits infructuous. The assessee’s cross-objection was allowed, granting complete relief.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The present appeal by the Revenue and cross-objection by the assessee has been filed against the impugned order dated 17/10/2025, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2017-18.
