Premlata Bisht Bhandari Vs ITO (ITAT Pune)
Reassessment Quashed for Wrong Approval Under Section 151 – ITAT Holds Sanction by PCIT Instead of PCCIT is Fatal
The Pune ITAT quashed the entire reassessment proceedings, holding that a notice issued under section 148 beyond three years from the end of the relevant assessment year is invalid if the mandatory approval is obtained from the wrong authority under section 151.
The assessee had not filed a return for AY 2016-17. Based on information allegedly emerging from material seized during a search in the case of Bhagvati Developers, the Assessing Officer initiated reassessment proceedings and issued notice under section 148 on 14.07.2022. The notice was issued after obtaining approval from the Principal Commissioner of Income Tax (PCIT)-3, Pune.
Before the Tribunal, the assessee contended that since the notice was issued beyond three years from the end of the relevant assessment year, approval ought to have been obtained from the Principal Chief Commissioner of Income Tax (PCCIT) as mandated by section 151, and not from the PCIT. Reliance was placed on recent Pune Tribunal decisions and the Bombay High Court ruling in Alag Property Construction Pvt. Ltd..
The Tribunal noted that the issue was squarely covered by the Bombay High Court’s decision, which held that obtaining approval from an authority lower than the one prescribed under section 151 renders the reassessment proceedings without jurisdiction. Following the binding precedent and its own earlier decisions, the ITAT held that approval from the PCIT could not substitute the statutory approval required from the PCCIT.
Accordingly, the Tribunal declared the notice issued under section 148 to be invalid, quashed the reassessment proceedings in their entirety and allowed the appeal. Since the assessee succeeded on the legal ground, the Tribunal did not examine the merits of the additions, treating those grounds as infructuous.
FULL TEXT OF THE ORDER OF ITAT PUNE
