Ramachandran Meenakshi Vs ITO (ITAT Chennai)
Reopening Notice Invalid Without Proper Section u/s 151 – ITAT Quashes Reassessment
The assessee challenged the validity of reopening notice u/s 148 for AY 2018-19 on the ground that the mandatory sanction from the specified authority u/s 151 was not obtained. The AO had issued notice u/s 148A(b) on 23.03.2022 and notice u/s 148 on 05.04.2022, after obtaining approval only from the Principal Commissioner of Income Tax (PCIT).
The assessee contended that since more than three years had elapsed from the end of the relevant assessment year (31.03.2022), the approval required under the new regime of section 151(ii) should have been obtained from the Principal Chief Commissioner / Chief Commissioner / Principal Director General / Director General, and not from the PCIT. Reliance was placed on the Supreme Court decision in UoI v. Rajeev Bansal.
The Tribunal observed that:
- Up to 31.03.2022, approval from PCIT was sufficient.
- However, the notice u/s 148 was issued on 05.04.2022, i.e., after the expiry of three years from the end of the assessment year.
- Therefore, sanction should have been taken from the specified higher authority under section 151(ii).
Since the AO obtained approval only from the PCIT instead of the prescribed authority, the Tribunal held that the reopening notice lacked valid sanction and the assumption of jurisdiction was invalid.
Relying on the Madras High Court decision in Core Logistic Company v. ACIT, the ITAT quashed the notice issued u/s 148 and the consequent reassessment proceedings.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
