ITO Vs Himanshu Sarda (ITAT Mumbai)
The appeal arose from the order of the Commissioner of Income Tax (Appeals) for Assessment Year 2017-18. The assessee had filed a cross-objection with a delay of 37 days, which the Tribunal condoned after finding sufficient cause and noting that the Revenue had raised no objection.
The assessee had filed a return declaring total income of ₹1,00,000. During the relevant assessment year, the assessee sold a property for an agreement value of ₹25,00,000, whereas the stamp duty value was ₹15,38,83,500. A notice under Section 148 of the Income Tax Act was issued and subsequently treated as a notice under Section 148A(b) in terms of the Supreme Court’s decision in Union of India vs. Ashish Agarwal. As the assessee did not furnish the cost of acquisition or cost of improvement, the Assessing Officer treated the entire stamp duty value of ₹1,53,83,500 as capital gains and added it to the assessee’s income. The CIT(A) deleted the addition, following which the Revenue preferred an appeal before the Tribunal, while the assessee challenged the validity of the reassessment proceedings through a cross-objection.
The assessee raised a preliminary legal objection contending that the sanction granted under Section 151 for issuance of notice under Section 148 was invalid. It was submitted that although the notice under Section 148 dated 11.06.2021 and the subsequent proceedings under Section 148A(d) recorded approval from the Principal Commissioner of Income Tax-17, Mumbai, such approval was not in accordance with law because the reassessment proceedings had been initiated beyond three years from the end of the relevant assessment year. Reliance was placed on the Bombay High Court’s decision in Alag Property Construction Pvt. Ltd. v. ACIT and the Mumbai Bench decision in Shabbir Taheri v. ITO.
