Mumbai ITAT Cancels Assessment Order Until Higher Income Tax Authority Approves It Under Section 151

 

DCIT-42 Vs. Sunil Harischandra Keni (ITA No.4374/Mum/2024)

Facts:

1.  The taxpayer Sunil Harischandra Keni, filed a return claiming an income of Rs. 16,42,210 for the Assessment Year 2017-18. The taxpayer during the year, purchased a property worth Rs. 70 lakhs. However, Rs. 1,69,12,500 was the stamp duty value of the property.

2.  The income tax department has regarded the taxable u/s 56(2)(vii)(b) of the Income Tax Act, categorizing it as income from other sources. The department reopened the assessment u/s 148 of the Income Tax Act, 1961 based on the assumption that the income did not undergo the assessment due to the undervaluation.

3.  U/s 148 a notice was been issued before the taxpayer. The assessment order was passed adding the difference of Rs 92,12,500 to the total income of the taxpayer as income from other sources.

4.  The taxpayer challenged this addition to the Commissioner of Income Tax (Appeals) claiming that the sanction for reopening was received u/s 151(i) of the Income Tax Act but since more than 3 years had passed, it must have been accomplished u/s 151(ii).

ITAT Mumbai held as below:

In the absence of higher authority approval u/s 151(iii) of the Income Tax Act, 1961 for the reopening beyond three years, the assessment order must be quashed.

 

The copy of the order is as under: