Abdul Salam Mohamed Yasin Vs DCIT (ITAT Mumbai)
Reassessment Time-Barred Under Rajeev Bansal; Sanction by PCIT Invalid: ITAT Mumbai Quashes Notice u/s 148 for AY 2017-18
The Mumbai ITAT (“A” Bench) allowed the appeal of the assessee for AY 2017-18 and annulled the reassessment proceedings on purely jurisdictional grounds, holding that the notice issued under section 148 was barred by limitation and further vitiated by invalid sanction under section 151(ii).
The Tribunal examined the complete chronology in light of the Supreme Court decisions in Ashish Agarwal and Union of India v. Rajeev Bansal (2024). It noted that the original notice under the old regime was issued on 30.06.2021, the last permissible day under TOLA, leaving no surviving limitation. Applying Rajeev Bansal, the ITAT held that after excluding the statutorily permitted periods (supply of material and two-week reply window under section 148A(b)), the outer limit to issue a fresh notice u/s 148 stood frozen at 14.06.2022. Since the impugned notice was actually issued on 28.07.2022, it was clearly beyond the permissible time and therefore without jurisdiction.
The Tribunal further held that the legal fiction in Ashish Agarwal merely arrests limitation for a finite interregnum and cannot revive or extend a jurisdiction already extinguished by efflux of time. Once the limitation under section 149 stood exhausted, the Assessing Officer was divested of authority to reopen the assessment, rendering all subsequent actions legally sterile.
Independently, the ITAT found a fatal sanctional defect. As the notice was issued beyond three years from the end of the relevant assessment year, mandatory approval under section 151(ii) was required from the Principal Chief Commissioner / Chief Commissioner, whereas approval in the present case was granted only by the Principal Commissioner, an incompetent authority. Relying on Pradeep Himatlal Shah and Ramesh Bachulal Mehta (Bom. HC), the Tribunal held that such defective sanction itself renders the notice void ab initio.
Holding that limitation and sanction are twin jurisdictional conditions, failure of either being fatal, the ITAT quashed the notice under section 148 and annulled the entire reassessment proceedings. The appeal was allowed on legal grounds alone, without going into merits
FULL TEXT OF THE ORDER OF ITAT MUMBAI
