Samunder Saree Centre Vs DCIT (ITAT Delhi)
Summary: ITAT Delhi allowed the appeal of Samunder Saree Centre for AY 2017-18 and quashed the reassessment proceedings on the jurisdictional ground that the approval required under Section 151 of the Income-tax Act, 1961 had been obtained from the wrong authority. The appeal arose from the NFAC order dated 22.12.2025 against an assessment dated 26.05.2023 passed under Section 147 read with Section 144B. The assessee raised several grounds challenging the validity of the reassessment, including the specific legal contention that the Assessing Officer could not validly assume jurisdiction under Section 147 when sanction had been obtained from the Principal Commissioner of Income Tax (PCIT) instead of the Principal Chief Commissioner of Income Tax (PCCIT). The Tribunal noted from the order under Section 148A(d) dated 23.07.2022 that approval had in fact been obtained from the PCIT. Since the reopening for AY 2017-18 was undertaken after more than three years had elapsed from the end of the relevant assessment year, the Tribunal held that the specified sanctioning authority for purposes of Section 148 was the PCCIT.
Approval by the PCIT was therefore approval from the wrong statutory authority and vitiated the entire reassessment proceedings. The Tribunal relied upon the jurisdictional Delhi High Court judgment in Appeal Kids Dream International Private Limited v. ACIT, W.P.(C) 2814/2023, dated 24.02.2025, which had held that TOLA did not alter the identity of the competent authority prescribed under Section 151 and that reassessment beyond three years could not survive where sanction was granted only by the PCIT. ([TaxGuru][1]) The Tribunal also noted the Delhi High Court ruling in H And M Hennes And Mauritz Retail Private Limited v. ACIT, reported in 174 taxmann.com 1113 (Delhi), dated 14.05.2025, where the requirement of approval from the authority specified under Section 151(ii) for a notice beyond three years was similarly treated as mandatory. ([TaxGuru][2]) Following these binding jurisdictional precedents, the Tribunal quashed the reassessment itself. Consequently, the remaining grounds raised by the assessee on law and facts were not adjudicated and were left open. The assessee’s appeal was accordingly allowed.
