ACIT Vs Nilkamal Crates & Containers (ITAT Mumbai)
The dispute involved reassessment initiated for AY 2016-17 alleging bogus donation entries claimed u/s 35(1)(ii). While CIT(A) had deleted addition on merits, the assessee raised legal ground before ITAT challenging validity of reopening based on improper sanction under sec.151.
ITAT observed that reopening proceedings were initiated after three years from end of relevant AY, hence approval was required from the “specified authority” as per sec.151(ii), i.e., Principal Chief Commissioner/Chief Commissioner/Director General. However, approval was granted by Principal Commissioner, which was not the competent authority under amended law post Finance Act 2021.
Relying on Supreme Court ruling in Union of India vs. Rajeev Bansal, Ashish Agarwal, and Bombay HC decision in Siemens Financial Services Pvt. Ltd., Tribunal held that sanction by wrong authority is not a curable defect u/s 292B and goes to jurisdiction itself. Since valid sanction is a mandatory pre-condition for issuance of notice u/s 148A(d) and 148, entire reassessment proceedings were held void ab initio.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The aforesaid appeal of revenue and the Cross Objection (CO) by the assessee are directed against the order of Commissioner of Income Tax (Appeals) / NFAC, Delhi (for short “The Ld. CIT(A)”), dated 31.03.2025, for the Assessment Year (AY) 2016-17, which in turn arises from the order under section 147 r.w.s. 144B of the Income Tax Act, 1961 (the Act) passed by Assessment Unit, Income Tax Department on 14.05.2023 ( for short “the ld. AO”).
