Manish Jagdish Joshi Vs CIT(DRP-3) (ITAT Mumbai)
The Mumbai ITAT allowed the assessee’s appeal and quashed the reassessment proceedings for Assessment Year 2017-18, holding that the notice issued under Section 148 was invalid as it violated the provisions of Sections 149 and 151 of the Income-tax Act. The Tribunal held that the reassessment proceedings were both time-barred and initiated without approval from the correct statutory authority.
The assessee, a non-resident individual, had filed a return declaring income of ₹25,950. Information was subsequently received from the office of the DIT (I&CI), Mumbai based on data from the Sub-Registrar regarding immovable property transactions. According to the information, the assessee had acquired an immovable property for nil consideration, while the stamp duty value of the property was ₹43,32,000. The Assessing Officer formed a view that the difference of ₹43,32,000 was taxable under Section 56(2)(vii)(b) and had escaped assessment. Consequently, a notice under Section 148 was issued on 15 June 2021.
Following the Supreme Court’s decision in Union of India v. Ashish Agarwal and the related CBDT Circular, the earlier notice was treated as a notice under Section 148A(b). Thereafter, a show-cause notice under Section 148A(b) was issued on 23 May 2022. After considering the assessee’s objections, the Assessing Officer passed an order under Section 148A(d) on 18 July 2022 and issued a fresh notice under Section 148 on 24 July 2022. The reassessment was completed by making an addition of ₹43,32,000 under Section 56(2)(vii)(b), resulting in assessed income of ₹43,57,950.
