The Tribunal directed fresh verification of the assessee’s claim that the ₹70 lakh property purchase was funded through a gift from her husband, sourced from matured fixed deposits.
4 July 2026 4:54 PM
The Income Tax Appellate Tribunal, Mumbai Bench “D”, has remanded a reassessment case to the Assessing Officer after noting that both the assessment and appellate orders were passed ex parte due to the assessee’s non‑response to statutory notices, and observed that the ₹70 lakh property purchase was funded through a gift from the assessee’s husband sourced from matured fixed deposits.
The case involved the assessee, Devyani Pravin Solanki, an individual who had not filed her return of income for AY 2020‑21. Information received through the Insight Portal indicated that she had purchased an immovable property worth ₹70 lakh and earned bank interest of ₹69,750.
The Assessing Officer initiated proceedings under Section 147 of the Income Tax Act, 1961, issuing notice under Section 148 on 19 March 2024. Despite repeated notices under Section 142(1), the assessee did not respond, leading to an assessment under Sections 147 r.w.s. 144 and 144B, determining total income at ₹71.11 lakh and initiating penalty proceedings under Sections 271AAC, 270A, and 234F.
Before the CIT(A), NFAC, Delhi, the assessee again failed to appear, resulting in an ex parte confirmation of the additions. On further appeal, her authorised representative explained that she had lost access to the registered email ID linked to the Income Tax portal, causing inadvertent non‑compliance.
It was argued that the ₹70 lakh investment represented a gift from her husband, sourced from the maturity proceeds of fixed deposits, and that supporting documents, bank statements, FD closure details, and property purchase agreement were now available.
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The Departmental Representative did not object to a remand, acknowledging that the new evidence had not been examined earlier.
After hearing both sides, the bench comprising Amit Shukla (Judicial Member) and Makarand Vasant Mahadeokar (Accountant Member) observed that the assessment and appellate orders were passed without the assessee’s participation and that the newly produced documents “go to the root of the issue relating to the addition under Section 69.”
The Tribunal set aside the CIT(A)’s order and restored the matter to the Assessing Officer for fresh verification of the source of investment and interest income, directing that the assessee be given an adequate opportunity to present her case.
The appeal was allowed for statistical purposes.
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Devyani Pravin Solanki vs CIT (Appeals)
CITATION : 2026 TAXSCAN (ITAT) 968Case Number : ITA No. 9438/Mum/2025Date of Judgement : 13.05.2026Coram : AMIT SHUKLA, JUDICIAL MEMBER& SHRI MAKARAND VASANT MAHADEOKARCounsel of Appellant : Ms. Nisha Patel, Ld. ARCounsel Of Respondent : Shri AnnavaramKosuri,Sr. AR
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Invalid Sanction by PCIT for Reopening Assessment Vitiates Notice u/s 148 of Income Tax Act: ITAT [Read Order]
Reassessment proceedings for A.Y. 2016–17 initiated after three years are invalid where approval under Section 151(1) was obtained from the PCIT instead of the PCCIT, and accordingly quashed the notice under Section 148 and the consequential assessment.
4 July 2026 4:53 PM
The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) held that reassessment done after three years requires approval from the Principal Chief Commissioner of Income Tax (PCCIT), hence the approval by the Principal Commissioner of Income Tax (PCIT) was held invalid, and the reassessment was quashed.
The assessee, M/s. Vrinda Ispat Pvt. Ltd, challenged the reassessment proceedings on multiple grounds. However, during the course of hearing, the assessee confined its arguments to the legal issue that relates to questioning the validity of the approval obtained under Section 151(1) of the Income Tax Act for issuance of notice under Section 148 of the Income Tax Act.
It was contended that the approval had been granted by the Principal Commissioner of Income Tax (PCIT) whereas, in terms of the statutory scheme governing reassessment proceedings, the competent authority for granting such approval in the present case was the PCCIT.
Section 151(1) of the Income Tax Act, prescribes the specified authority whose prior approval is mandatory before issuing a notice under Section 148.
For cases where three years have elapsed from the end of the relevant assessment year, Section 151(1) provides that the specified authority is the: Principal Chief Commissioner of Income Tax (PCCIT) or Principal Director General of Income Tax (PDGIT), or, where there is no PCCIT or PDGIT, the Chief Commissioner of Income Tax (CCIT) or Director General of Income Tax (DGIT).
After considering the rival submissions and examining the material available on record, the Tribunal accepted the assessee’s contention. The bench of Rajesh Kumar, Accountant Member and Pradip Kumar Choubey, Judicial Member observed that the reassessment pertained to A.Y. 2016–17 and had been initiated beyond the prescribed period of three years. In such circumstances, the law mandates that prior approval for issuance of notice under Section 148 must be accorded by the Principal Chief Commissioner of Income Tax. Since the approval had instead been granted by the Principal Commissioner of Income Tax, the mandatory requirement of Section 151 stood violated.
As a consequence of the invalid approval, the Tribunal quashed the notice issued under Section 148 as well as the consequential reassessment order. The assessee’s appeal was, therefore, allowed, reaffirming that reassessment proceedings must strictly comply with the statutory safeguards prescribed under the Income-tax Act and that any deviation from the prescribed approval mechanism vitiates the entire proceedings.
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M/S. VRINDA ISPAT PVT. LTD. vs I.T.O., WARD – 5(1)
CITATION : 2026 TAXSCAN (ITAT) 986Case Number : ITA Nos.6 to 10/KOL/2025Date of Judgement : 25 June 2026Coram : RAJESH KUMARCounsel of Appellant : Siddarth JhajhariaCounsel Of Respondent : Dheeraj
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