Kilaru Venkata Satish Vs DCIT (ITAT Hyderabad)
Summary: The assessee challenged the reassessment for Assessment Year 2018-19 principally on the jurisdictional ground that the notice under section 148 dated 11.04.2022 was issued after more than three years from the end of the relevant assessment year but with approval only from the Principal Commissioner of Income Tax, Hyderabad-1, rather than from an authority specified under clause (ii) of section 151.
The reassessment originated from information flagged under the CBDT’s Risk Management Strategy through the Insight Portal under the High Risk CRIU/VRU category, concerning an unsecured loan of Rs.50,00,000 advanced by the assessee to Sri Pridhvi Raj Khambhampati on 05.12.2017. The Assessing Officer treated the amount as unexplained cash credit under section 68 and determined the income at Rs.66,96,810 under section 147 read with section 144B; the CIT(A) sustained the assessment.
The Tribunal admitted the additional legal ground because its adjudication required no further investigation of facts, relying on National Thermal Power Company Ltd. Vs. CIT (1998) 229 ITR 383 (SC). On the jurisdictional issue, the Tribunal examined the substituted reassessment framework under Sections 147, 148, 148A, 149 and 151 introduced by the Finance Act, 2021 with effect from 01.04.2021. It noted that where more than three years had elapsed from the end of the relevant assessment year, clause (ii) of section 151 required prior approval from the Principal Chief Commissioner, Principal Director General, or, where applicable, Chief Commissioner or Director General.
