Assessee challenges the assumption of jurisdiction by AO u/s 147 of the Income Tax Act

The Income Tax Appellate Tribunal heard an appeal where the assessee challenged the Assessing Officer's (AO) jurisdiction under Section 147. The primary ground for the challenge was that the notice for reassessment, issued beyond four years, lacked the necessary approval from the competent authority as required by Section 151 of the Income Tax Act. The tribunal noted that approval was obtained from an unauthorised officer, potentially invalidating the notice and subsequent assessment.

IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR

BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SINGH YADAV, AM

ITA. No. 808/JP/2018

Assessment Years : 2008-09

Shri Shyam Gidwani
3-N, A-16, Jawahar Nagar,
Jaipur.

vs

The ITO,
Ward-6(1),
Jaipur.

Assessee by : Shri Mahendra Gargieya (Adv.) &
Shri Devang Gargieya (Adv.)

Revenue by : Shri A.S. Nehra (Add.CIT)

Date of Hearing : 04/10/2021

Date of Pronouncement : 21/10/2021

ORDER

This is an appeal filed by the assessee against the order of ld. CIT(A)-2, Jaipur dated 15.03.2018 for the assessment year 2008-09.

2. Briefly the facts of the case are that based on review of the AIR information, the Assessing Officer observed that the assessee has made cash deposit of Rs. 22,97,600/- in his bank account maintained with ICICI Bank. Given that the assessee has not filed any return of income, the AO believed that income to the extent of Rs. 22,97,600/- has escaped assessment and reasons were recorded and notice U/s 148 was issued on 18.03.2015. In response, the assessee filed his return of income declaring total income of Rs. 79,950/- and thereafter, after calling for information/explanation from the assessee, the assessment was completed U/s 147 r.w.s. 143(3) vide order dated 23.10.2015 at an assessed income of Rs. 15,77,550/- by making addition of Rs. 14,97,600/- U/s 69A of the IT Act.

3.  It was submitted that in the instant case, notice u/s 148 (which is w.r.t A.Y. 2008-09) was issued on 18.03.2015 i.e. beyond the period of 4 years, hence as per Section 151, approval of Pr. CIT/CCIT/CIT should have been obtained. However, a bare perusal of reasons recorded (received with AO's letter dated 12.04.2021) shows that such an approval has been taken from ld. JCIT, Range - 6, who is not the authorized & competent authority u/s 151 to accord such a sanction. Hence, the impugned notice u/s 148 and the consequently, impugned assessment order passed u/s 147 must be quashed on this ground itself in absence of requisite approval from the competent authority U/s 151 of the Act.\

4. Regarding alternate plea of working out the peak credit, it has been claimed that there are deposits which have been made out of earlier withdrawals during the year and the same has been ignored by the Assessing officer. In absence of any findings recorded by the AO, we set-aside the matter to the file of the AO to examine the said claim of the assessee and decide as per law after providing reasonable opportunity to the assessee. In the result, the appeal of the assessee is partly allowed for statistical purposes.
Order pronounced in the open Court on 21/10/2021.

Please find attached the enclosed file for the full judgement.