Wudstay Travels Private Limited Vs ACIT (ITAT Delhi)
Delhi ITAT quashed reassessment u/s 147/148, holding that approval beyond 3 years must come from Principal Chief Commissioner or Principal Director General, not from a mere Principal Commissioner.
Assessee had not filed return for A.Y. 2017-18. Based on information about time deposits & interest income, AO issued notice u/s 148A(b) on 01-06-2022 and framed assessment adding ₹3.10 crore u/s 69 along with minor additions. ITAT noted that the sanction for reopening was obtained only from the Principal Commissioner, though notice was issued after 3 years from the end of A.Y. 2017-18.
Following Delhi HC in CPI (Marxist) v. CIT(Exemptions) & Dalpat Baraiya v. ITO, ITAT held that such sanction by an incompetent authority vitiates jurisdiction. Since mandatory approval u/s 151 was not taken from the proper authority, the entire reassessment was void ab initio.
Accordingly, the Tribunal quashed the assessment, allowed the appeal on legal grounds & kept other issues open.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [hereinafter referred to as “NFAC”] vide order dated 02.04.2025 pertaining to A.Y. 2017-18 arising out the assessment order dated 25.05.2023 u/s.147 r.w.s 144 of the Income-tax Act, 1961, (in short ‘the Act’).
