Suman Jagannath Sankhe Vs CIT (Appeals) (ITAT Mumbai)
In Suman Jagannath Sankhe vs CIT(A) (A.Y. 2016-17), reassessment was initiated based on alleged cash deposits of ₹15 lakh. The assessee challenged jurisdiction on multiple legal grounds including limitation, absence of proper sanction u/s 151 and defects in procedure under the new reassessment regime.
The ITAT examined whether the notice u/s 148 issued on 19.07.2022 under the new law complied with section 151. It observed that income alleged to have escaped assessment was only ₹15 lakh, i.e., below ₹50 lakh, and the notice was issued beyond three years from the end of the relevant A.Y. As per the amended provisions, no reassessment notice can be issued after three years where escaped income is below ₹50 lakh. Further, sanction was granted by the Principal Commissioner instead of the higher specified authority, rendering the notice invalid.
Accordingly, the Tribunal held that non-compliance with section 151 made the notice u/s 148 and entire reassessment proceedings void ab initio. Since reassessment itself was quashed, issues on merits such as addition u/s 68 and taxation u/s 115BBE became academic. The assessee’s appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
Present appeal filed by assessee arises out of order dated 14/10/2025 passed by NFAC, Delhi [hereinafter “the Ld.CIT(A)”], for Assessment Year 2016-17 on following grounds of appeal:-
“ON NATURAL JUSTICE:
1.1 In the facts and circumstances of the case and in law, the order passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) [“the Ld. CIT(A)”] deserves to be quashed since the same is passed in gross violation of the principles of Natural Justice and also based on totally extraneous considerations while ignoring the relevant, material considerations and submissions made by the Appellant.
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ON VALIDITY OF REASSESSMENT:
2.1 In the facts and circumstances of the case and in law, re-assessment proceedings and the consequential assessment order passed by the Assessing Authority, National Faceless Assessment Centre [the Ld. AO], is bad in law and void for want of jurisdiction and the Ld. CIT(A) erred in affirming the same.
2.2 While passing the said order, the Ld. CIT(A) failed to appreciate that:
a. None of the necessary pre-conditions for initiation as well as completion of re-assessment under the Act are fulfilled / complied with in the present case;
b. The impugned re-assessment is initiated without first passing an order under section 148A(d) and serving the same on the Assessee and, in fact, the said order is not even uploaded on the portal and therefore the entire proceeding is bad in law;
c. The impugned re-assessment is barred by limitation since the same is initiated beyond a period of three years from the end of the relevant assessment year (A.Y. 2016-17) despite the fact that the alleged income escaping assessment is only Rs. 15,00,000/- and even the assessed income is only Rs. 20,25,144/-, which is well below Rs. 50 lakhs, and therefore the impugned re-assessment is barred by limitation;
d. The provisions pertaining to sanction under section 151 of the Act are not complied with in the present case since, as admitted by the Ld. AO himself, the sanction is obtained from the Principal Commissioner of Income Tax instead of the Chief Commissioner / Principal Chief Commissioner of Income Tax and therefore the entire proceeding is invalid and void ab initio;
e. The impugned Notice under section 148 is bad in law since the same is issued without providing the Appellant with the necessary information and material relied on by the AO;
f. The impugned re-assessment proceedings as well as the Notice under section 148 and the proceedings prior thereto including the Notice under section 148A(b) are bad in law since the same are issued in violation of section 151A read with Notification No. 18 of 2022;
g. The Notice under section 148 is void also because the same is issued without any Document Identification Number (DIN) as mandated by CBDT Circular No. 19 of 2019;
h. In any case, there is no income escaping assessment in the present case and therefore the entire exercise is bad in law even on this count.
2.3 In the facts and circumstances of the case and in law, the impugned re-assessment order deserves to be quashed and it is prayed accordingly.
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ON JURISDICTION:
3.1 In the facts and circumstances of the case and in law, the assessment order passed by the Ld. AO is bad in law and void, being in violation of section 144B of the Act and therefore the same deserves to be quashed.
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ON MERITS:
4.1 In the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the Ld. AO in making an addition of Rs. 15,00,000/- in the hands of the Appellant under section 68 in respect of cash deposits, in gross violation of the provisions of the Act.
4.2 While doing so, the Ld. CIT(A) failed to appreciate that:
a. The Ld. AO wrongly applied the provisions of section 68 of the Act, whereas the same are not at all applicable in the present case;
b. The Appellant and her husband are both agriculturists and this fact is accepted by the Ld. AO himself;
c. The cash deposited was from past savings out of the agricultural income earned by the Appellant and her husband and could therefore not be treated as undisclosed;
d. In any case, the addition has been made by the Ld. AO simply on the basis of surmises and without any evidence refuting the claim of the Assessee and is therefore unsustainable.
4.3 In the facts and circumstances of the case and in law, the additions made by the Ld. AO deserve to be deleted in toto.
4.4 In the facts and circumstances of the case and in law, the Ld. AO erred in computing the income of the Appellant as Rs. 35,25,144/- instead of Rs. 20,25,144/-, as assessed by him in his order under section 143(3) of the Act.
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5.1 In the facts and circumstances of the case and in law, the Ld. AO erred in taxing the additions made by him of Rs. 15,00,000/- under section 115BBE of the Act, in gross violation of the provisions of the Act and on a complete misreading of the said section 115BBE.
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6. The Appellant craves leave to add, amend, alter, delete or modify any or all of the above grounds of Appeal.”
2. Brief facts of the case are as under:-
