2025 (7) TMI 1566 - AT - Income Tax

Validity of reopening of assessment - Validity of sanction u/s 151(i) - notice after three years from the end of relevant assessment year - taking sanction from the Principal Commissioner as empowered u/s 151(i) but not from the Pr. Chief Commissioner or Pr. Director General or Chief Commissioner or Director General HELD THAT - As sanction is not accorded by authorities authorized to grant such sanction as required in this case and therefore there is violation of the provisions of section 151(ii) of the Act. Thus the notice along with the assessment order u/s 147 r.w.s. 144B of the Act is liable to be quashed consequently the same is quashed. Appeal filed by the Assessee is allowed.

Summary

The Appellate Tribunal (ITAT Mumbai) allowed the Assessee's appeal against the order dated 28.10.2024 passed by the National Faceless Appeal Center/Ld. Commissioner of Income Tax (Appeals) under section 250 of the Income Tax Act, 1961 for AY 2017-18. The Tribunal held that the reopening of the assessment after three years was invalid because the sanction was granted by the Ld. Principal Commissioner under section 151(i), whereas the law mandates sanction from the Ld. Pr. Chief Commissioner, Pr. Director General, Chief Commissioner, or Director General as per section 151(ii). This constituted a violation of the provisions of section 151(ii). Consequently, the notice dated 26.07.2022 and the assessment order dated 09.05.2023 under section 147 read with section 144B were quashed. The Tribunal concluded: "the notice dated 26.07.2022 along with the assessment order dated 09.05.2023 u/s 147 r.w.s. 144B of the Act is liable to be quashed." The appeal was allowed accordingly.