The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that an assessment cannot be re-opened without the approval of the designated authority under the Income Tax Act, 1961.
The Assessing Officer initiated re-assessment proceedings against the assessee in the year 2014 by recording reasons and satisfaction that income has escaped assessment within the meaning of Section 147 of the Income Tax Act based on the evidence contained in the report of Investigation Wing and after taking necessary approval from the competent authority. The Assessing Officer on the basis of the same made the addition under section 68 in respect of share capital amounting to Rs. 70,00,000/-.
On appeal, the first appellate authority allowed the assessee’s claim and ordered in favour of the assessee.
Upholding the order of the Commissioner of Income Tax (Appeals), the Tribunal held that “it can be clearly seen that the notice has been issued prior to the approval. Thus, reopening u/s 148 is without the approval of the designated authority and as such reassessment itself is bad and without any jurisdiction. The mandatory conditions of Section 148 have not at all followed by Revenue. Therefore, the re-opening itself is void ab initio and does not survive. Thus, the Cross objection filed by the assessee is allowed. Since the inception of the challenge of the order of CIT(A) in Revenue’s appeal itself is void ab initio, the Revenue’s appeal is dismissed.”
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