Niraj Sarju Mandal Vs DCIT (ITAT Mumbai)
In the case of Niraj Sarju Mandal vs. DCIT, the Income Tax Appellate Tribunal (ITAT) of Mumbai quashed a reassessment proceeding for the Assessment Year (AY) 2016-17, ruling that the notice was invalid because it lacked proper sanction from the correct authority.
The core issue before the ITAT was the validity of a notice issued under Section 148 of the Income Tax Act, 1961, which was used to reopen the petitioner’s case. This notice was issued on June 30, 2022, well beyond the standard three-year period from the end of the relevant assessment year. The petitioner’s counsel, Mr. R. S. Mishra, argued that according to the amended provisions of Section 147/148 inserted by the Finance Act, 2021, a reopening of a case beyond three years requires approval from a senior authority, specifically a Principal Chief Commissioner, Principal Director General, Chief Commissioner, or Director General, as stipulated in Section 151(ii).
The petitioner contended that the assessing officer had obtained sanction only from a Principal Commissioner of Income Tax (Pr. CIT), which is not the designated authority for reassessments initiated after the three-year mark. Therefore, the notice was issued without a legally valid sanction, rendering it and all subsequent actions void from the beginning. The petitioner’s counsel relied on an earlier Mumbai Tribunal decision in ACIT Vs Manish Financial to support this claim.
