ITO Vs Smark Securities Limited (ITAT Hyderabad)
Hyderabad ITAT Quashes Reassessment: Section 148 Notice Invalid Without Approval of Competent Authority Under Section 151(ii)
The ITAT Hyderabad dismissed the Revenue’s appeal and allowed the assessee’s cross-objection to the extent of quashing the reassessment framed under Sections 147 read with 144B for AY 2018-19. The Tribunal held that the notice under Section 148 dated 28.04.2022, issued after more than three years from the end of the relevant assessment year, required prior approval from the authority specified under Section 151(ii), namely the Principal Chief Commissioner, Principal Director General, Chief Commissioner or Director General. However, the Assessing Officer had obtained approval only from the Principal Commissioner of Income Tax, who was not the specified authority under the law applicable from 01.04.2021. The Tribunal, relying on the Telangana High Court decision in Deloitte Consulting India Private Limited v. The Assessment Unit, Income Tax Department and referring to the Supreme Court’s decision in Union of India & Ors. v. Ashish Agrawal, held that the assessment lacked valid assumption of jurisdiction and quashed the reassessment. Having quashed the assessment on jurisdictional grounds, the Tribunal did not examine the Revenue’s grounds challenging the deletion of the addition relating to alleged bogus long-term capital gains.
