ITAT Mumbai quashed reassessments for AYs 2015-16 and 2016-17 due to time limitation and lack of valid sanction under Section 151.
ITAT Mumbai Quashes Reassessment for Time Bar and Invalid Sanction
The ITAT, Mumbai, quashed reassessment proceedings initiated against Manish Financial for assessment years 2015-16 and 2016-17. The tribunal held that the notices under Section 148 were time-barred and that the sanction under Section 151 was invalidly issued by an officer without proper authority.
The AO had invoked extended limitation under Section 149(1), claiming unexplained cash deposits. However, the tribunal found that the deposits did not meet the ₹50 lakh threshold, making the extended limit inapplicable. Additionally, the sanction was issued by an Additional Commissioner not empowered under Section 151.
Implication: This decision underscores the need for strict compliance with both limitation and sanction requirements. Taxpayers may challenge reassessments based on hierarchical and procedural defects in sanctioning authority.
