Somil Exim LLP Vs ITO (ITAT Mumbai)
WRONG SANCTION, WRONG JURISDICTION—APPROVAL OF PCIT CANNOT SUBSTITUTE HIGHER AUTHORITY MANDATED U/S 151(ii)
Facts
The assessee, Somil Exim LLP, challenged an appellate order dated 11 March 2026 passed by the NFAC, Delhi, for AY 2017-18. The appeal raised several grounds questioning both the validity of the reassessment proceedings & the addition made by the AO.
The reassessment proceedings had been initiated after the statutory changes introduced by the Finance Act, 2021 & the Supreme Court’s decision in Union of India v. Ashish Agarwal. The AO passed an order u/s 148A(d) on 29 July 2022 & issued the consequential notice u/s 148 on the very same date.
Before passing the order u/s 148A(d), the AO obtained approval from the Principal Commissioner of Income Tax. The reassessment was thereafter completed u/s 147 r.w.s. 144B, making an addition of ₹1,68,63,300. The CIT(A) upheld the action of the AO.
Before the Tribunal, the assessee requested that Ground No. 5, challenging the validity of the sanction obtained u/s 151, be taken up first since it went to the very root of the AO’s jurisdiction.
Assessee’s Contention
The assessee argued that the relevant assessment year was AY 2017-18, while the order u/s 148A(d) & notice u/s 148 were issued on 29 July 2022. Thus, more than three years had elapsed from the end of the relevant assessment year when the reassessment proceedings were initiated.
