Mukesh Kumar Agarwal Vs ITO (ITAT Jaipur)
The Income Tax Appellate Tribunal (ITAT) Jaipur ruled in fa-vor of Mukesh Kumar Agarwal in two connected appeals concerning reassessment and penalty proceedings for Assessment Year 2010–11. The assessee challenged the validi-ty of an addition of ₹4,07,000 and ₹36,662 made under Sections 144/147, along with a penalty of ₹2,60,000 under Section 271E of the Income-tax Act. A key argument raised was that the reassessment notice under Section 148 was issued by an Assessing Officer lacking jurisdiction over the case. Additionally, the requisite sanction under Section 151 for initiating reassessment was not validly obtained. These jurisdictional lapses formed the core of the appeal, with the assessee also contesting the factual findings related to the sale of an immovable property where he acted as a power of attorney holder.
The Tribunal found that the reassessment proceedings were invalid due to the lack of ju-risdiction and appropriate approval. The findings of the Assessing Officer, including the classification of cash deposits as unexplained income under Section 69A and the assumption that the property sale was done in the assessee’s personal capacity, were not adequately substantiated. Given that the reassessment itself was invalid, the Tribunal held that the penalty under Section 271E could not stand, rendering the penalty order infructuous. Consequently, both the quantum addition and the penalty were quashed, and the assessee’s appeals were allowed. The decision was pronounced in open court on July 27, 2022.
