DCIT Vs Sunil Harischandra Keni (ITAT Mumbai)
In the case of DCIT Vs. Sunil Harischandra Keni, the Income Tax Appellate Tribunal (ITAT) in Mumbai addressed the validity of an assessment made for the assessment year 2017-18, ultimately quashing it due to a lack of proper approval under Section 151 of the Income Tax Act. The Revenue had originally reopened the assessment based on the assumption that the taxpayer had understated income by not declaring a substantial difference between the purchase price of a property and its stamp duty value. The assessment was reopened after obtaining approval from the Principal Commissioner of Income Tax (Pr. CIT), but the appeal challenged the legitimacy of this reopening, particularly as it involved a case beyond the three-year limitation.
The key point in the Tribunal’s decision hinged on a recent ruling from the Bombay High Court regarding the same taxpayer. The High Court concluded that the reopening of the assessment was invalid because the required sanction for assessments beyond three years was not appropriately secured as per Section 151(ii), leading to a jurisdictional issue. Consequently, the ITAT upheld the High Court’s ruling, emphasizing that the lower authority must adhere to the High Court’s interpretation of the law. This led to the dismissal of the Revenue’s appeal, reinforcing the legal requirement for strict compliance with procedural norms in tax assessments, particularly concerning higher authority approvals in cases of reassessment.
