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ITAT Delhi: Re-Assessment Without Consent of Designated Authority is Without Jurisdiction

Author: Ankita Karn (REVA University, Bangalore)

Income Tax Appellate Tribunal (ITAT) Delhi has observed that an assessment cannot be re-opened without the approval of the designated authority under the Income Tax Act, 1961.

The Delhi bench of the Income Tax Appellate Tribunal 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 had initiated the re-assessment proceedings against the assessee by recording reason and satisfaction in the year 2014 which contend that income has escaped assessment within the meaning of Section 147 of Income Tax Act on the basis of the evidence that contains in the Investigating Wing report and also after taking all the necessary assent from the competent party. The Assessing Officer on the basis of the same has made the addition under section 68 in respect of share capital amounting to Rs. 70,00,000.

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The first appellate authority allowed the claim of the assessee and order in favour of them only. The Commissioner of the Income Tax uphold the order and 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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