Vaibhav Kishanlal Jajoo Vs DCIT (ITAT Ahmedabad)
Reassessment Beyond 3 Years Invalid Due to Wrong Sanctioning Authority — PCIT Cannot Approve u/s 151(ii); Entire 148 Proceedings & 80GGC Addition of ₹8.11 Lakh Quashed
In this appeal, Vaibhav Kishanlal Jajoo challenged the reassessment order passed u/s 147 r.w.s. 143(3) whereby the AO disallowed his deduction of ₹8,11,000/- u/s 80GGC claimed as donation to Manvadhikar National Party. The AO reopened assessment citing an Investigation Wing report alleging that several Registered Unrecognized Political Parties, including Manvadhikar National Party, were engaged in providing bogus political-donation entries in exchange for cash refunds after deducting commission. Based on this, notice u/s 148A(b) was issued, an order u/s 148A(d) was passed, and reassessment was completed.
Before NFAC, the Assessee raised several jurisdictional objections including lack of valid sanction u/s 151, non-speaking order, violation of natural justice, absence of cross-examination & denial of video-conference hearing. NFAC rejected all contentions & sustained the disallowance, holding the donation non-genuine based on the Investigation Wing report.
Before Tribunal, the Assessee argued that the reassessment was time-barred & jurisdictionally defective because reopening was beyond 3 years from the end of AY 2019-20, i.e., beyond 31.03.2023. Therefore, under Section 151(ii), approval for issuance of notice u/s 148 must come from the Principal Chief Commissioner or Chief Commissioner (PCCIT/CCIT). However, in the present case, approval was taken only from the PCIT, which is not the sanctioning authority when more than three years have elapsed. This, according to the Assessee, rendered the entire reopening void ab initio.
The Assessee relied heavily on the Ahmedabad ITAT decision in Dalpat Baraiya Vs ITO, ITA No. 1692/Ahd/2024, where reopening after 3 years approved by the PCIT was held invalid & the reassessment was quashed. Tribunal reproduced the key finding from Dalpat Baraiya:
“Sanction obtained from a wrong Specified Authority is not sustainable in law. The entire reopening is bad in law.”
Tribunal also relied on the Supreme Court in Union of India vs. Rajeev Bansal, which held that sanction by the correct specified authority is a precondition for jurisdiction under section 148.
Applying the same law, Tribunal held that:
— reopening in the present case was initiated beyond 3 years,
— sanction was taken from PCIT instead of PCCIT/CCIT,
— hence, the notice u/s 148 was without jurisdiction.
Once jurisdiction failed, the reassessment order & the addition of ₹8.11 lakh u/s 80GGC automatically collapsed. Tribunal therefore quashed the entire reassessment proceedings without examining merits of the donation.
Accordingly, the appeal of the Assessee was allowed in full.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
