Prathamik Krishi Pattin Sahakari Sangha Niyamit Kalagurki Vs ITO (ITAT Bangalore)
Bangalore ITAT Quashes Reassessment: PCIT’s Approval Invalid Where Section 151 Required PCCIT/CCIT’s Sanction
The assessee, a primary agricultural co-operative society, had not filed its return for AY 2018-19. Based on information relating to substantial cash deposits, withdrawals and fixed deposits, the AO initiated reassessment and ultimately assessed income at ₹20.47 lakh, including denial of deduction under Section 80P.
The order under Section 148A(d) dated 6 April 2022 and notice under Section 148 dated 7 April 2022 were issued after obtaining approval from the PCIT, Hubli. The Tribunal observed that three years from the end of AY 2018-19 had expired on 31 March 2022. Therefore, under Section 151(ii), the competent approving authority was the PCCIT/PDGIT or, where applicable, the CCIT/DGIT, and not the PCIT.
The ITAT held that approval by the specified authority is a mandatory jurisdictional prerequisite, intended to protect taxpayers against arbitrary reopening. It is a substantive supervisory safeguard requiring due application of mind and cannot be treated as a mere procedural formality or curable technical irregularity.
Accordingly, approval granted by the incompetent authority could not confer jurisdiction upon the AO. The Section 148A(d) order, Section 148 notice and all consequential proceedings and assessment orders were quashed. Since the reassessment itself was annulled, the Tribunal did not examine the merits of the Section 80P claim or the alternative contention that less than the statutory seven days had been allowed to respond to the Section 148A(b) notice.
