Ravi Vikram Shah Vs ITO (ITAT Mumbai)
Reassessment Beyond Three Years Invalid Without Approval of Higher Specified Authority: Mumbai ITAT Quashes Section 69A Addition
The assessment for AY 2017-18 was reopened through a notice under Section 148 dated 30 June 2022, after more than three years from the end of the relevant assessment year. However, approval for reopening had been obtained from the Principal Commissioner of Income Tax.
The Mumbai ITAT held that where reopening is initiated beyond three years, Section 151(ii) mandatorily requires approval from the Principal Chief Commissioner, Principal Director General, Chief Commissioner or Director General. Approval by the PCIT, who is the authority specified under Section 151(i), was therefore without jurisdiction.
Relying upon the Bombay High Court’s decision in Alag Property Construction (P.) Ltd. v. ACIT, the Supreme Court ruling in Union of India v. Rajeev Bansal and dismissal of the Revenue’s SLP in ITO v. Mangla Gupta, the Tribunal held that sanction by the correct specified authority is a jurisdictional precondition for issuing a valid reassessment notice.
Consequently, the notice under Section 148 and the reassessment framed under Sections 147 read with 144 were held void ab initio and quashed. The Tribunal therefore did not examine the merits of the ₹6 lakh addition under Section 69A.
