Deven Jitendra Mehta Vs ITO (ITAT Mumbai)
The Mumbai ITAT quashed reassessment proceedings holding that approval obtained from an incorrect authority renders the entire reopening invalid.
In this case, the notice under Section 148 was issued beyond three years from the end of the relevant assessment year. As per Section 151(ii), approval was required from the Principal Chief Commissioner (PCCIT). However, the sanction was obtained only from the Principal Commissioner (PCIT), which is not the competent authority under law.
The Tribunal, relying on the Bombay High Court judgment, held that such defect is not procedural but goes to the root of jurisdiction, thereby invalidating the notice under Section 148, order under Section 148A(d), and the consequent assessment order.
Accordingly, the ITAT quashed the entire reassessment proceedings, without going into the merits of the addition.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal has been preferred by the Assessee against the order dated 10.11.2025, impugned herein, passed by the National Faceless Appeal Centre (NFAC)/Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2017-18.
2. In the instant case, the case of the Assessee was reopened beyond a period of three years from the end of the relevant assessment year by issuing a notice dated 29.07.2022 u/s. 148 of the Act and in pursuance to the order dated 29.07.2022 under section 148A(d) of the Act by taking sanction from the Ld. PCIT-5, Mumbai, but not from the competent sanctioning authority, i.e., Ld. PCCIT as provided/specified in section 151(ii) of the Act, and thus the notice and orders even dated 29.07.2022 under section 148 and section 148A(d) of the Act respectively, along with assessment order dated 29.05.2023 under section 147 r.w.s. 144 and 144B of the Act, whereby the addition of Rs. 3,65,00,000/- under section 69 of the Act has been made by the Assessee as unexplained money, is liable to be quashed in view of the said provisions of section 151(ii) of the Act, as well as the judgment of the Hon’ble Jurisdictional High Court in the case of Alag Property Construction Private Limited v. ACIT, Circle 15(1)(1), Mumbai & Ors., Writ Petition No. 3938 of 2022, decided on 08.09.2025 [2025 (9) TMI 1203 – Bombay High Court] wherein the Hon’ble High Court has also considered the identical issue and ultimately quashed the order and notice under section 148A(d) and 148 of the Act respectively.
