Sudhir Motiram Patil Vs ITO (ITAT Mumbai)
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) allowed the assessee’s appeal for Assessment Year 2017-18 and quashed the reassessment proceedings initiated under Sections 147 and 148 of the Income Tax Act. The Tribunal held that the notice issued under Section 148 was invalid due to lack of approval from the competent specified authority and was also barred by limitation.
The assessee had challenged the reopening of assessment, validity of notice under Section 148, sanction under Section 151, addition under Section 69A relating to cash deposits, levy of tax under Section 115BBE, penalty under Section 271AAC(1), and interest charged under various provisions of the Act.
The assessee had originally filed a return of income on 06.06.2017 declaring total income of ₹9,06,430. Subsequently, information emerged during the scrutiny assessment proceedings of the assessee’s wife that cash deposits of ₹26 lakh made in a joint bank account allegedly belonged to the assessee and had not been disclosed in the return of income. On that basis, the Assessing Officer issued a notice under Section 148 on 18.05.2021. Following the Supreme Court’s decision in Union of India v. Ashish Agrawal, the original notice was treated as a notice under Section 148A(b). A show-cause notice was issued on 27.05.2022, objections filed by the assessee were rejected, and an order under Section 148A(d) was passed on 26.07.2022. On the same date, a fresh notice under Section 148 was issued. Thereafter, an assessment order dated 11.04.2023 was passed under Sections 147 read with 144B, assessing total income at ₹35,06,420 after making an addition of ₹26 lakh. The CIT(A) later granted partial relief and restricted the addition to ₹5,63,422.
