Rising Star Investment Vs ITO (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, in the case of Rising Star Investment Vs. ITO, has set aside reassessment proceedings and deleted an income addition for Assessment Year (AY) 2017-18. The appeal challenged an assessment order passed under Section 143(3) read with Section 147 of the Income Tax Act, 1961, which had added Rs. 1,10,39,000/- under Section 56(2)(viia) of the Act. The assessee primarily contested the jurisdictional validity of the reassessment and, secondarily, the merits of the addition.
The reassessment proceedings were initiated with a Section 148 notice dated April 15, 2021, under the old regime, seeking to verify a property transaction. Following the Supreme Court’s decision in Union of India vs. Ashish Agarwal [(2022) 444 ITR 1 (SC)], which mandated the application of the new reassessment regime for notices issued after April 1, 2021, a second notice under Section 148 was issued on July 31, 2022. This second notice, which stated it was issued in consequence of the Ashish Agarwal judgment, was approved by the Principal Commissioner of Income Tax (PCIT)-17, Mumbai. The assessee raised concerns regarding the approval authority, the absence of a Document Identification Number (DIN) for the second notice, and non-compliance with Section 148A procedures.
