Mumbai ITAT Invalidates Reassessment for AY 2017-18 Due to Defective Section 151 Sanction

Background and Appeal Context

The case of Ravi Vikram Shah Vs ITO (ITAT Mumbai) arose from an order passed by the Commissioner of Income Tax (Appeals)-NFAC, Delhi dated 23.03.2026 for Assessment Year 2017-18. The assessee challenged the reassessment proceedings initiated under Section 147 and the consequent addition made under Section 69A.

A crucial additional ground was raised before the Mumbai ITAT, questioning the very jurisdiction of the reassessment on the basis that the approval required under Section 151 for issuance of notice under Section 148 was obtained from an incorrect authority.

Additional Grounds of Appeal – Jurisdictional Challenge

The assessee placed an additional legal ground before the Tribunal, contending that the reassessment proceedings were void because of defective sanction under Section 151. The additional grounds broadly alleged the following:

  • The reassessment for AY 2017-18 had been upheld despite incorrect sanction under Section 151.
  • The reopening was based on invalid or incorrect information.
  • There was no fresh tangible material justifying the reopening.
  • The assessee was not furnished with the information relied upon by the Assessing Officer, nor with a copy of the statement recorded on 20.02.2017.
  • The addition of Rs. 600,000/- under Section 69A was wrongly confirmed.
  • The authorities violated principles of natural justice by relying on the assessee’s statement recorded by the DDIT (Inv.), Unit-7(1) on 20.02.2017 without providing a copy.

The Tribunal admitted the additional jurisdictional ground, noting that it involved a pure question of law going to the root of the validity of the assessment order.

Time Bar and Applicable “Specified Authority”

The reassessment was initiated through a notice issued under Section 148 dated 30.06.2022, seeking to reopen the assessment for AY 2017-18. This notice was issued after the expiry of three years from the end of the relevant assessment year.

The assessee’s counsel emphasized:

  • Under the new reassessment regime, where reopening is initiated after three years from the end of the relevant assessment year, Section 151(ii) mandates that the prior approval must be obtained from one of the following:

    • Principal Chief Commissioner of Income Tax
    • Principal Director General
    • Chief Commissioner
    • Director General

  • In the present matter, however, the approval was obtained from the Principal Commissioner of Income Tax, i.e., an authority falling under Section 151(i) and not Section 151(ii).

On this basis, it was argued that:

  1. The Section 148 notice itself was issued without jurisdiction.
  2. Consequently, the reassessment framed under Section 147 read with Section 144 was also void ab initio.

Case Law Relied Upon by the Assessee

Counsel for the assessee referred to and relied upon several judicial precedents, including:

  • ITO v. Mangla Gupta, [2026] 183 taxmann.com 121 (SC)
  • Arvindbhai Khatri Sons Designs (P.) Ltd. v. ACIT, [2026] 183 taxmann.com 118 (Mumbai – Trib.)
  • Joana Diago Dsouza v. ITO, [2026] 186 taxmann.com 771 (Mumbai – Trib.)
  • ITO v. Neelesh Hasmukh Doshi HUF, [2026] 187 taxmann.com 843 (Mumbai – Trib.)
  • Prem Antony Sequeira vs. NFAC in ITA No.3250/Mum/2026 dated 23.06.2026