JWC Logistics Park Private Limited Vs ACIT (ITAT Mumbai Bench)
Wrong Sanctioning Authority, Right Case Gone Wrong: PCIT’s Approval Cannot Replace PCCIT’s Mandated Approval Beyond Three Years – Reassessment Quashed
Summary: The assessee challenged the reassessment order passed u/s 143(3) r.w.s. 147, whereby an addition of ₹11.80 lakh had been made by treating certain expenditure as non-genuine.
Apart from challenging the reopening and addition on merits, the assessee raised an additional legal ground before the Tribunal. It contended that the notice u/s 148 and the entire reassessment were void because the mandatory approval had not been obtained from the “specified authority” prescribed u/s 151(ii).
Since the additional ground challenged the very jurisdiction of the AO and arose from facts already available on record, the Tribunal admitted it for adjudication.
The notice u/s 148 was issued on 06.04.2022 for AY 2018-19. It was undisputed that more than three years had elapsed from the end of the relevant assessment year. Under the reassessment regime introduced by the Finance Act, 2021, the identity of the authority competent to grant sanction depends upon the time elapsed from the end of the relevant assessment year.
Where three years or less have elapsed, section 151(i) recognises the Principal Commissioner, Principal Director, Commissioner or Director as the specified authority. However, where more than three years have elapsed, section 151(ii) requires approval from a higher authority, namely, the Principal Chief Commissioner, Principal Director General, Chief Commissioner or Director General.
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