ITO Vs Kolahai Infotech Private Limited (ITAT Delhi)
PCIT Approval Not Enough After 3 Years—Tribunal Applies Rajeev Bansal- Jurisdictional Defect Fatal: Wrong Approval Under s.151(ii) Invalidates Entire 147 Proceedings
Revenue appealed against order of CIT(A), while Assessee filed cross objections challenging reopening u/s 147 on the ground that notice u/s 148 was issued without obtaining mandatory sanction from the specified authority prescribed u/s 151 of the new regime. For AY 2016-17, notice u/s 148 was issued on 27.07.2022—more than 3 years from end of relevant AY. Under s.151(ii), approval must be obtained from PCCIT/PDGIT, or in their absence from CCIT/DGIT. Instead, AO obtained approval only from the PCIT, which is not the competent authority once 3 years have elapsed.
AR relied on Supreme Court judgment in Union of India & Others Vs Rajeev Bansal (2024 SCC OnLine SC 2693), which clarified that sanction must strictly match the authority defined in s.151, & the level of sanction correlates to elapsed time from end of AY. Tribunal examined the notice, sanction sheet & statutory framework and held that approval by PCIT was illegal & without jurisdiction for AY 2016-17.
Tribunal also relied on Delhi HC in CPI (Marxist) (174 taxmann.com 925), Bhagwan Sahai Sharma (174 taxmann.com 916) & Delhi ITAT rulings in Genpact India Holdings and Rudra Buildwell Homes, all holding that failure to obtain proper sanction vitiates entire reassessment proceedings. Accordingly, notice u/s 148 & reassessment order were quashed for AY 2016-17. Since facts for AY 2017-18 were identical, findings were applied mutatis mutandis. With Assessee’s cross objections allowed, Revenue’s appeals became infructuous & were dismissed.
