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TMI Blog2025 (2) TMI 1179X X X X Extracts X X X X X X X X Extracts X X X X ..... 9/- during the assessment year 2018-19, the Assessing Officer reopened the case within the meaning of section 147 read with the provisions of Explanation to said section of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). Accordingly, a notice u/s 148 of the Act was issued and served on the assessee. The assessee in response to the same filed his return of income on 26.04.2022 declaring total income of Rs.28,13,270/-. During the course of assessment proceedings the Assessing Officer asked the assessee to justify the long term capital gain claim as exempt u/s 10(38) of the Act in respect of the transaction of shares of Kushal Tradelinks Ltd. He further noted that a search and seizure action u/s 132 of the Act was conducted in the Kushal group of Ahmedabad on 05.02.2019 wherein it was established that the said company was used for price rigging and providing bogus accommodation entries in the form of bogus long term capital gain. Rejecting the various explanations given by the assessee and relying on various decisions, the Assessing Officer added the entire sale proceeds of Rs.28,39,899/- u/s 69A r.w.s. 115BBE of the Act and accordingly, rejected the claim of exemptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oth the legal and factual grounds of appeal of the assessee should be allowed. 9. The Ld. DR on the other hand referring to the decision of the Hon'ble Delhi High Court in the case of Pr.CIT vs. Naveen Kumar Gupta vide ITA No.401/2022, judgment dated 20.11.2024, submitted that the Assessing Officer can reopen the assessment u/s 147 of the Act on the basis of information received from the Investigation Wing on the basis of search conducted on a third party. So far as the approval u/s 151 of the Act is concerned, he submitted that the Assessing Officer has correctly taken the approval from the competent authority. 10. So far as the merit of the addition is concerned, he submitted that the Ld. CIT(A) / NFAC has elaborately discussed the issue and has held that the assessee did not offer proper explanation / supporting evidences in support of his claim regarding the exemption u/s 10(38) of the Act. He accordingly submitted that the grounds raised by the assessee should be dismissed. 11. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the present case, if approved. JAGDISH SHANKAR JAGTAP CIRCLE 1, KOLHAPUR" 12. A perusal of the above shows that the order under clause (d) of section 148A of the Act was passed on 13.04.2022 after obtaining the approval of the PCIT, Pune. Since the assessment year involved is assessment year 2018-19 and the notice u/s 148 was issued on 13.04.2022 it has to be seen as to who is the competent authority from whom the approval has to be obtained. 13. We find the provisions of section 151 of the Act read as under: "151. Specified authority for the purposes of section 148 and section 148A shall be,- (i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year; (ii) Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year: Provided......" 14. A perusal of the above provisions clearly shows that w.e.f. 01.04.2021 the Principal Chief Commissioner or the Principal Director General is the competent authority for giving sanction if m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affidavit in reply, the Department is refusing to give the sanction which makes us wonder what is the national secret involved in that, that Assessee is being refused what he is rightfully entitled to receive from the Department. In the affidavit in reply, the stand taken by the Revenue is it will be made available during the re- assessment proceeding. 3. The impugned order and the impugned notice both dated 7th April 2022 state that the Authority that has accorded the sanction is the PCIT, Mumbai 5. The matter pertains to Assessment Year ("AY") 2018-19 and since the impugned order as well as the notice are issued on 7th April 2022, both have been issued beyond a period of three years. Therefore, the sanctioning authority has to be the PCCIT as provided under Section 151 (ii) of the Act. The proviso to Section 151 has been inserted only with effect from 1" April 2023 and, therefore, shall not be applicable to the matter at hand. 4. In this circumstances, as held by this Court in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors., the sanction is invalid and consequently, the impugned order and impugned notice both dated 7th April 2022 und ..... 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