ITAT Delhi Invalidates Reassessment Notice Issued Without Appropriate Sanction Under Amended Section 151 Post-Rajeev Bansal Ruling

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has delivered a pivotal ruling concerning the validity of reassessment proceedings initiated under the amended provisions of the Income Tax Act, 1961. In the case of ACIT Vs Munjal Holdings, the Tribunal dismissed the Revenue's appeal, reinforcing that a notice issued under Section 148 without the approval of the correct "Specified Authority" as mandated by Section 151 is jurisdictionally defective and void ab initio.

The ruling is particularly significant as it clarifies the application of the Supreme Court's recent judgment in Union of India Vs Rajeev Bansal, establishing that the Apex Court’s decision does not relax the statutory requirement for obtaining valid sanctions from the designated high-ranking authorities.

Factual Background of the Dispute

The dispute pertains to the Assessment Year (AY) 2016-17. The assessee, a partnership firm, had filed its return of income declaring approximately Rs. 15.89 crore, which was initially accepted via a scrutiny assessment under Section 143(3) on December 18, 2018.

Subsequently, the Revenue received information through the "Insights" portal alleging that the assessee had engaged in non-genuine transactions. Specifically, the allegations involved:

• Receipt of sham dividend income amounting to Rs. 165,57,48,917/-.
• Claiming bogus short-term capital losses totaling Rs. 170,84,24,858/- from equity/derivative trading.