Dattatray Vithoba Sawant Vs ITO (ITAT Mumbai)
Reassessment U/s 148 Quashed Where Escaped Income ₹2.58 Lakh & Notice Issued Beyond 3 Years – Wrong Sanction under Sec.151 – ITAT Mumbai
The assessee challenged reassessment proceedings initiated under the new regime where notice u/s 148 dated 06.07.2022 was issued alleging escaped income of ₹2.58 lakh relating to deduction claims and allowance exemptions. The Tribunal first examined the legal grounds since they went to the root of jurisdiction.
Relying on the Supreme Court ruling in Union of India v. Rajeev Bansal, ITAT analysed the sanction hierarchy reproduced in the comparative table on page 5 and held that under the amended provisions of section 151, reopening beyond three years requires approval from higher authorities such as Principal Chief Commissioner/Chief Commissioner. Further, where alleged escaped income is below ₹50 lakh, reopening itself is barred after three years. In the present case, approval was granted only by the Principal Commissioner and escaped income was merely ₹2.58 lakh, rendering the notice jurisdictionally defective.
Accordingly, the Tribunal quashed the notice u/s 148 and the entire reassessment proceedings as void ab initio. Since jurisdiction failed, disallowances relating to deductions u/s 80C, 80GG and exemption claims became academic. The assessee’s appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
