Prakash Misrimal Sanghvi Vs DCIT (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT), Ahmedabad, considered cross-appeals filed by the assessee and the Revenue for Assessment Years 2013-14 to 2021-22 arising from a common order of the Commissioner of Income Tax (Appeals). The dispute originated from a search conducted on 23 November 2021 in the Ratnamani Group, during which handwritten diaries and other documents containing cash transactions were seized from the assessee’s premises. During the search, the assessee admitted that the diaries recorded cash transactions not reflected in the regular books of account. Based on the seized material, the Assessing Officer (AO) reopened assessments for earlier years and made various additions relating to interest income, land trading, share trading, trading activities reflected in “Maal Khaate,” peak credits, and other transactions.
The assessee challenged the reopening of assessments on multiple grounds, including the validity of approval under Section 151, limitation under Section 149, and the jurisdiction of the Jurisdictional Assessing Officer. The Tribunal rejected all objections. It held that the approval under Section 151 was validly granted by the Director General of Income Tax (Investigation), who had jurisdiction over the Central Charge cases. The Tribunal also held that the reopening for Assessment Years 2013-14 to 2015-16 was not barred by limitation because the seized diaries reflected unaccounted cash receipts exceeding ₹50 lakh, satisfying the statutory requirements relating to escaped income represented in the form of assets. The objection regarding initiation of proceedings by the Jurisdictional Assessing Officer instead of a Faceless Assessing Officer was also rejected.
