Dhwaja Commodity Services Private Limited Vs DCIT (ITAT Mumbai)
Wrong Section 151 Approval Renders Reassessment Void: Mumbai ITAT Quashes ₹25.02 Lakh Section 69C Addition
The assessee’s appeal was filed with a delay of 33 days because the accountant responsible for tax matters had travelled to Rajasthan due to his mother’s medical emergency. Accepting the explanation and supporting affidavit as constituting sufficient cause, the Mumbai ITAT condoned the delay.
For AY 2018-19, the reassessment notice was issued beyond three years from the end of the relevant assessment year. However, approval was obtained from the Principal Commissioner of Income Tax.
The Tribunal held that under Section 151(ii), reopening beyond three years requires approval from the Principal Chief Commissioner, Principal Director General, Chief Commissioner or Director General. Approval by the PCIT, an authority contemplated under Section 151(i), was jurisdictionally invalid.
Relying on the Bombay High Court ruling in Alag Property Construction (P.) Ltd. v. ACIT, the Supreme Court’s decision in Union of India v. Rajeev Bansal and dismissal of the Revenue’s SLP in ITO v. Mangla Gupta, the Tribunal held that sanction from the correct specified authority is a mandatory jurisdictional requirement.
Consequently, the reassessment framed under Sections 147 read with 144B was quashed as void ab initio. Therefore, the merits of the ₹25.02 lakh addition under Section 69C, including the alleged double addition in the computation, did not require adjudication.
