Govindan Gnanavel Vs ITO (ITAT Chennai)
ITAT Chennai Quashes Reassessment – Notice u/s 148 Invalid for Want of Approval from Correct Authority u/s 15
The assessee had not filed a return of income and the AO noticed cash deposits of ₹6.64 crore in the bank account. Based on this information, reassessment proceedings were initiated by issuing notice u/s 148A(b) followed by an order u/s 148A(d) and notice u/s 148. The AO completed reassessment u/s 147 r.w.s. 144B and made an addition of ₹6.64 crore u/s 69A as unexplained money. The CIT(A) confirmed the addition.
Before the ITAT, the assessee raised a legal ground that the notice u/s 148 dated 06.04.2022 was issued after expiry of three years from the end of AY 2018-19, and therefore as per Section 151(ii) the sanction should have been obtained from the Principal Chief Commissioner (PCCIT). However, the AO had obtained approval only from the Principal Commissioner (PCIT), which was not the competent authority.
The Tribunal noted that although the show-cause notice u/s 148A(b) was issued within three years, the actual notice u/s 148 was issued beyond three years, and therefore approval from PCCIT was mandatory. Relying on judicial precedents including the decision of the Madras High Court in Core Logistic Company and the Bombay High Court in Vodafone Idea Ltd., the Tribunal held that approval from the wrong authority vitiates the reassessment proceedings.
Accordingly, the ITAT held that the notice u/s 148 issued with approval of PCIT instead of PCCIT was invalid, and therefore the entire reassessment proceedings were without jurisdiction. The reassessment order was quashed without examining the merits of the addition.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
