Upneet Singh Arneja Vs ITO (ITAT Delhi)
ITAT Delhi Quashes Reassessment – Approval Taken from Wrong Authority Renders 148 Notice Invalid
Delhi allowed the appeal of Upneet Singh Arneja by holding that reassessment initiated beyond three years from end of AY 2016-17 was invalid as approval was obtained from Pr. CIT instead of Pr. Chief Commissioner/Director General as mandated u/s 151.
Assessee, proprietor of M/s Kanika Herbals, originally filed return on 17.10.2016 declaring income of ₹4,43,800/-. Return was held invalid by CPC. Later, a belated return was filed on 16.04.2018 declaring same income with turnover of ₹2.95 crore, but without audit report u/s 44AB.
During search on Atul Tyagi, who admitted to being an entry operator, it was found that his bank accounts & that of certain persons including Assessee were used for accommodation entries. Based on this, AO issued notice u/s 148 on 18.05.2021. Pursuant to SC ruling in Union of India vs. Ashish Agarwal (444 ITR 1), fresh notice u/s 148A(b) was issued on 18.05.2022 & order u/s 148A(d) passed on 28.07.2022. AO thereafter made addition of ₹94,85,865/- u/s 68. CIT(A)/NFAC confirmed the addition on 12.02.2025.
Assessee argued that Notice dated 28.07.2022 was issued beyond 3 years from AY 2016-17. As per amended s.151(ii), sanction should have been obtained from Pr. Chief Commissioner/Director General, not Pr. CIT. Reliance placed on Delhi HC ruling in Communist Party of India (Marxist) vs. CIT (Exemptions) (W.P.(C) 9031/2023, 28.04.2025) & ITAT Delhi ruling in Sampark Management Consultancy LLP vs. DCIT (ITA 6025 & 6026/Del/2024, 25.06.2025).
