Arnab Kumar Goswami Vs ITO (ITAT Kolkata)
Conclusion: AO failed to obtain requisite approval from PCCIT under section 151 for issuance of reassessment notice under section 148 beyond 3 years, the proceedings were deemed to be non-compliance to the statutory requirement under the law and the consequent additions made by AO were also not justified.
Held: Assessee, declared an income of Rs. 3,52,310/- for the assessment year. He purchased a property at Rajarhat for Rs. 25,00,000/-, while the stamp duty value was Rs. 35,36,655/-. The difference of Rs. 10,36,655/- was shared between the assessee and his spouse, with each receiving Rs. 5,18,327/-. AO added Rs. 5,18,327/- to the assessee’s income under section 56(2)(vii). Later, AO issued a notice for reassessment. Assessee responded by reaffirming his earlier income declaration and submitting relevant documents, including bank statements and details of the property purchase. Assessee, aggrieved by the decision, appealed to the CIT (Appeals), who dismissed the appeal and upheld the decision of AO. Assessee dissatisfied with the order of CIT(A) appealed before Tribunal. It was held that the income alleged to have escaped assessment was Rs.5,18,327/- which was below the threshold limit of Rs.50 lakh, hence, prior approval should require to obtain from PCCIT as per section 151 for the cases which exceeds 3 years but within 10 years. However, in the present case, AO obtained approval only from PCIT which was contrary to the statutory requirement. In the case Subhra Basu vs. Union of India in WPA 18828 of 2022, wherein, the Hon’ble High Court held that reassessment notice issued without prior approval as mandated u/s 151 was invalid and liable to be quashed. Since in the present case AO failed to obtain requisite approval from PCCIT for issuance of reassessment notice beyond 3 years, the proceedings were deemed to be non-compliance to the statutory requirement under the law and the consequent additions made by AO were also not justified. Therefore, the additions made by AO were quashed.
