Kanumolu Pacs Ltd. Vs ITO (ITAT Visakhapatnam)
The assessee society appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, dated 01/10/2025, arising from the Assessing Officer’s reassessment order under Section 147 read with Section 144B of the Income Tax Act, 1961, dated 06/12/2023. The reassessment was initiated after the AO received information regarding substantial financial transactions during the relevant year, including cash withdrawals of Rs.1,75,14,500/-, cash deposits of Rs.2,96,500/-, time deposits of Rs.15,00,000/-, further cash deposits of Rs.1,90,41,342/- and commission or brokerage income of Rs.26,73,180/-. The AO passed an order under Section 148A(d) and issued notice under Section 148 on 07/04/2022. The assessee filed its return on 05/05/2022 declaring NIL income after claiming deduction under Chapter VIA. The AO subsequently declined the assessee’s claim for deduction under Section 80P and determined income at Rs.33,51,754/-. The CIT(A) dismissed the assessee’s appeal.
Before the ITAT, the assessee raised additional grounds challenging the validity of the reassessment proceedings, including the sanction required under Section 151, the minimum period prescribed for responding to the notice under Section 148A(b), and issuance of the Section 148 notice by the Jurisdictional Assessing Officer. The Tribunal admitted these grounds as purely legal issues, referring to National Thermal Power Corporation Company Limited vs. CIT (1998) 229 ITR 383 (SC). The assessee specifically contended that the Section 148 notice dated 07/04/2022 was issued more than three years after the end of AY 2018-19 and therefore required approval from the authority specified under Section 151(ii), namely the Principal Chief Commissioner, Principal Director General, Chief Commissioner or Director General. The record showed that approval had instead been obtained from the Principal Commissioner of Income Tax, Visakhapatnam-1.
