Manishaben Dilip Vankar Vs DCIT (ITAT Ahmedabad)
Reassessment Beyond 3 Years Below ₹50 Lakh Escapement Quashed: Wrong Sanction, Wrong Jurisdiction—148 Notice Held Invalid Post-2021 Regime
The Ahmedabad SMC Bench of the ITAT, in Manishaben Dilip Vankar vs DCIT (ITA No. 691/Ahd/2025, AY 2016-17), quashed the reassessment proceedings in entirety by holding that the reopening u/s 147 was barred by limitation and suffered from invalid sanction under the post-2021 reassessment regime.
The Assessee’s original return was processed u/s 143(1) and later reopened based on INSIGHT Portal information alleging penny-stock transactions amounting to about ₹30.34 lakh. Notice u/s 148A(d) and u/s 148 were issued on 30.07.2022, i.e., beyond three years from the end of AY 2016-17, and reassessment was completed by making additions u/s 68 and 69C.
The Tribunal held that, after amendment of section 149 w.e.f. 01.04.2021, reopening beyond three years is permissible only where escapement exceeds ₹50 lakh and is represented in the form of an asset—a condition admittedly not satisfied in the present case. Further, since the notice was issued beyond three years, mandatory approval ought to have been obtained from PCCIT/CCIT u/s 151(ii); however, sanction was wrongly taken from the PCIT, rendering the proceedings jurisdictionally defective.
Relying on the Bombay High Court ruling in Siemens Financial Services (P.) Ltd. and the Supreme Court’s exposition in Ashish Agarwal / Rajeev Bansal, the ITAT held that TOLA cannot dilute amended sections 149 & 151. Consequently, the initiation itself being void ab initio, the reassessment order was quashed without going into merits. The appeal was accordingly allowed in full.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal is filed by the Assessee as against the appellate order dated 31.01.2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the reassessment order passed under section 147 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2016-17.
