Ajit Pal Singh Choudhary Vs ACIT (ITAT Delhi)
ITAT Quashes Reassessment for Invalid Sanction Beyond 3 Years- Reopening Beyond Three Years with Wrong Approval—ITAT Quashes Bogus LTCG Reassessment
Assessee declared ₹10.56 lakh income and claimed exempt LTCG of ₹1.10 crore. AO reopened the case alleging bogus LTCG from penny stock and added ₹1,09,89,382 u/s 69A. CIT(A) upheld the addition.
Before ITAT, Assessee argued that the notice u/s 148 was issued on 19.07.2022, i.e., beyond 3 years from AY 2016-17, so Section 151(ii) required approval of Principal Chief Commissioner / Principal DG, but only Pr. CIT approval was taken, which is invalid. Reliance was placed on Delhi HC in Communist Party of India (Marxist) and ITAT Delhi in Sampark Management Consultancy LLP, which held that Pr. CIT is not competent beyond 3 years.
Tribunal held that despite Ashish Agarwal directions, statutory sanction u/s 151 cannot be bypassed. Since the approval was taken from the wrong authority, the notice and entire reassessment were void.
Reassessment order was quashed on legal ground, and other issues were left open. Appeal allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] vide order dated 28.03.2025 pertaining to A.Y. 2016-17 arising out the assessment order dated 29.05.2023 u/s.147 of the Income-tax Act, 1961, (in short ‘the Act’).
