Sudheer Kumar Katta Vs ITO (ITAT Hyderabad)
Wrong Authority, Failed Reopening: ₹73 Lakh Addition Falls
Approval Must Come from the Right Authority
The Hyderabad Tribunal has quashed a reassessment involving an addition of ₹73.01 lakh, holding that the Assessing Officer had obtained approval from an authority who was not competent under Section 151. Since the notice under Section 148 was issued after more than three years from the end of the relevant assessment year, approval from the Principal Commissioner of Income-tax was insufficient under the provision applicable at that time.
The decision emphasises that obtaining approval is only part of the statutory requirement. The approval must come from the authority prescribed for the relevant period. Sanction from the wrong authority cannot provide a valid foundation for reassessment.
Bank Transactions Triggered the Proceedings
The assessee had not originally filed his return for AY 2018-19. Information available with the Assessing Officer indicated substantial cash withdrawals, including withdrawals through bearer cheques, aggregating to ₹1,55,70,000 from a current account maintained with HDFC Bank.
A notice under Section 148A(b) was issued on 25 March 2022, requiring a response by 31 March 2022. As no reply was furnished within the prescribed time, the Assessing Officer passed an order under Section 148A(d) on 8 April 2022, after obtaining approval from the Principal Commissioner, Vijayawada. The notice under Section 148 followed on 9 April 2022.
