Vasantha Narayan Poojari Vs ITO (ITAT Mumbai)
Summary: ITAT Mumbai allowed the appeal of the assessee and quashed reassessment proceedings for Assessment Year 2017-18 because the Assessing Officer had obtained approval from the Principal Commissioner of Income Tax instead of the authority specified under Section 151(ii). The appeal arose from the order dated 12.12.2025 passed by the National Faceless Appeal Centre, Delhi. The assessee had challenged both the jurisdiction assumed under Section 147 and an addition of Rs.1,93,46,420/- under Section 56(2)(vii)(b). The Tribunal also examined the addition independently on merits and held that it could not be sustained.
The assessee had filed his return declaring income of Rs.6,16,450/-. Based on information concerning the difference between the declared consideration and stamp duty value of a property received upon redevelopment, the Assessing Officer initiated reassessment. A show cause notice under Section 148A(b) was issued on 21.05.2022, followed by an order under Section 148A(d) and notice under Section 148 on 25.07.2022. Since more than three years had elapsed from the end of AY 2017-18, the assessee argued that approval was required from the Principal Chief Commissioner or Chief Commissioner under Section 151(ii), whereas approval had been obtained from the Principal Commissioner.
The Tribunal accepted the jurisdictional challenge. It noted that three years from the end of AY 2017-18 expired on 31.03.2021 and that the Section 148A(d) order and Section 148 notice were issued on 25.07.2022. Following Ramesh Bachulal Mehta vs. Income Tax Officer, W.P. No.271 of 2023, which in turn considered Union of India vs. Rajeev Bansal, the Tribunal held that approval by the competent specified authority is a jurisdictional precondition. Since approval had been obtained from the PCIT rather than the authority contemplated by Section 151(ii), the order under Section 148A(d) and notice under Section 148 were void ab initio. Consequently, the assessment order could not survive.
