Case summary, Income Tax

Reassessment proceedings without approval is illegal

In the case of DCIT vs Bhaijee Portfolio Pvt. Ltd. the Income Tax Appellate Tribunal’s Delhi bench has held that the re-opening of an assessment without the approval of designated authority is not allowable under Income Tax Act.

Revenue’s Arguments:

The re-assessment proceeding was initiated by the Assessing Officer against the Assessee by recording reasons and satisfaction that income had escaped assessment within the meaning of Section 147, based on evidence contained in the report of the Investigation Wing. The revenue also contended that the reassessment was done after taking necessary approval from the competent authority.

Tribunal’s Holding:

The Tribunal held that reopening u/s 148 was without the approval of the designated authority, as the notice had been issued prior to obtaining the approval, which made such reassessment bad in law and without any jurisdiction. It also held that the mandatory conditions of Section 148 were not followed by Revenue and hence the re-opening would be void ab initio and the proceedings would not survive.

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Also Read: Revisional Jurisdiction cannot be exercised on issues which have not been covered in Reassessment

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