Avon Containners Pvt. Ltd Vs ACIT (ITAT Delhi)
Assessee filed return declaring income of ₹46,06,870 which was originally assessed u/s 143(3) at ₹50,42,370. Subsequently, AO reopened the case by issuing notice u/s 148 on 29.03.2019, & reassessment was completed on 14.11.2019 determining income at ₹1,05,42,370 with an addition of ₹55 lakh u/s 68 towards alleged accommodation entries from M/s Rising Portfolio India Pvt. Ltd. (₹30 lakh) & M/s Secure Portfolios India Pvt. Ltd. (₹25 lakh). CIT(A) upheld reassessment, holding that approval of reopening was validly granted by PCIT through ITBA portal.
Before Tribunal, Assessee challenged validity of reopening on the grounds that (i) two contradictory sets of reasons were recorded by AO on 22.03.2019 (manual) & 23.03.2019 (electronic), citing different figures (₹80 lakh vs ₹60 lakh), references to different clauses of Explanation 2 to s.147, & varying facts, (ii) approval u/s 151 was mechanical, containing wrong references such as unrelated cash deposits, & (iii) subsequent manual approval was granted only on 30.03.2019 i.e. after issuance of notice on 29.03.2019. Reliance was placed on Delhi HC in Tia Enterprises Pvt. Ltd. (SLP dismissed by SC on 13.09.2024) & Bombay HC in Aroni Commercials.
Tribunal noted that indeed two different reasons were recorded & separately approved, which cannot co-exist. The initial online approval was digitally unsigned & factually flawed, while the subsequent manual approval dated 30.03.2019 was after issuance of notice u/s 148. It held that in such circumstances the notice itself was ab-initio void as approval of competent authority was not in existence before its issuance. Consequently, assumption of jurisdiction by AO failed.
