ITAT Delhi Quashes Reassessment Over Mechanical Approval and Lack of Jurisdiction Under Section 151

Key Facts and Tribunal Findings

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, allowed the appeal of Vipul Agrawal for Assessment Year 2012–13 and quashed reassessment proceedings initiated under Sections 147/148 of the Income Tax Act.

The assessee had filed a return declaring income of ₹21.05 lakh. The Assessing Officer reopened the case based on alleged cash deposits of ₹51.60 lakh and capital gains of ₹33.51 lakh, issuing notice under Section 148 on 30 March 2019.

The Tribunal examined the approval granted under Section 151 by the Principal Commissioner of Income Tax and found that it merely stated that the case was “fit for reopening,” without recording any reasons. Relying on judicial precedents including S. Goyenka Lime & Chemicals Ltd., NC Cables Ltd., and SBC Minerals Pvt. Ltd., the Tribunal held that such approval was mechanical and lacked application of mind, rendering it invalid in law.

Additionally, the Tribunal noted a jurisdictional defect. The notice under Section 148 was issued by an Income Tax Officer (ITO), whereas jurisdiction lay with the Assistant Commissioner of Income Tax (ACIT), as the returned income exceeded ₹15 lakh in terms of CBDT Instruction No. 1/2011. This improper assumption of jurisdiction further vitiated the proceedings.

On these grounds, the Tribunal held that the reassessment proceedings were invalid and liable to be quashed. Consequently, all other grounds on merits were rendered academic and not adjudicated.

The appeal of the assessee was allowed.