KAMLESH KUKREJA, RAIPUR,RAIPUR V. ITO, WARD-1(1), RAIPUR, RAIPUR

ITA 119/RPR/2025

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The case involves Kamlesh Kukreja, the proprietor of Anmol Industries, who appealed against the order of the CIT(A)/NFAC, Delhi, concerning the assessment year 2016-17. The primary contention was the validity of the re-assessment proceedings initiated under section 148 of the Income Tax Act, 1961, which were challenged on the grounds of improper approval authority and procedural lapses. The tribunal examined the legal framework surrounding the issuance of notices and approvals for re-assessment, particularly focusing on the requirements under section 151 of the Act. The tribunal's decision was influenced by precedents from the Supreme Court and various High Courts, which emphasized the necessity of adhering to statutory provisions regarding the authority and procedure for re-assessment.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 824707 (ITAT-RAIPUR)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Appeal Filed On: 05-03-2025
• Other Referred Cases: Collector, Land Acquisition vs. Mst. Katiji & Ors., Inder Singh Vs. The State of Madhya Pradesh, Core Logistic Company vs. ACIT, Ramesh Bachulal Mehta vs. ITO, Ashish Agarwal (SC), Rajeev Bansal (2024) (SC), Surya Ferrous Alloys P Ltd (2024) (Mum-Trib), Varda Energy & Engg P Ltd (2024) (Raipur-Trib), Ashok Kumar Rungta (2024) (Bom HC), Nitin Ramdeoji Lohia (2022) (Bom HC), NK Proteins (2017) (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: SUNIL KUMAR AGRAWAL
• Keywords: Reassessment proceedings; Bogus purchase; Accommodation entries; Competent authority; Bogus
• Section: 147; 148; 144; 69C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA No.119/RPR/2025 Assessment year : 2016-17 Kamlesh Kukreja Prop. Anmol Industries, Surajpura Road, Bhatapara, Raipur – 493118 Vs. ITO, Ward-1(1), Raipur AHVPK6618C (Appellant) (Respondent) Assessee by : Shri Sunil Kumar Agrawal Department by : Dr. Priyanka Patel, Sr. DR Date of hearing : 14-11-2025 Date of pronouncement : 01-01-2026 O R D E R PER R.K. PANDA, VP: This appeal filed by the assessee is directed against the order dated 05.07.2024 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2016-17. 2. There is a delay of 156 days in filing of this appeal before the Tribunal for which the assessee has filed a condonation application along with an affidavit explaining the reasons for such delay. The Ld. Counsel for the assessee submitted that the office e-mail ID was not updated in the assessee’s profile in the income tax e-filing portal for which the assessee was not aware of the dismissal of the order passed. Subsequently when the assessee in the month of February, 2025 logged into the income tax portal, he came to know that the appeal for assessment year 2016-17 has been dismissed. Thereafter the assessee took necessary steps for Printed from counselvise.com 2 ITA No.119/RPR/2025 filing of the appeal. Relying on various decisions the Ld. Counsel for the assessee submitted that the delay in filing of the appeal was neither intentional nor deliberate and therefore, should be condoned. 3. The Ld. DR on the other hand strongly opposed the condonation application filed by the assessee. 4. We have heard the rival arguments made by both the sides on the issue of delay in filing of the appeal and considered the contents of the condonation application filed along with the affidavit of the assessee. 5. We find the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC) has held that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. 6. We find recently the Hon’ble Supreme Court in the case of Inder Singh Vs. The State of Madhya Pradesh reported in 2025 LiveLaw (SC) 339 has held as under: Printed from counselvise.com 3 ITA No.119/RPR/2025 “14. There can be no quarrel on the settled principle of law that delay cannot be condoned without sufficient cause, but a major aspect which has to be kept in mind is that, if in a particular case, the merits have to be examined, it should not be scuttled merely on the basis of limitation.” 7. Considering the totality of the facts of the case and in the light of the decisions of Hon’ble Supreme Court cited (supra), the delay in filing of the appeal is condoned and the appeal is admitted for adjudication. 8. Facts of the case, in brief, are that the assessee is an individual and filed his original return of income for the impugned assessment year on 06.09.2016 declaring total income of Rs.5,97,440/-. The case of the assessee was reopened on the ground that the assessee has received accommodation entries in the guise of bogus purchases of Rs.1,87,90,375/- during the financial year 2015-16 relevant to assessment year 2016-17 from Shri Deepak Nanjyani. Accordingly notice u/s 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 29.07.2022 was issued and served on the assessee. 9. During the course of assessment proceedings the Assessing Officer asked the assessee to furnish the computation of income, financial statements, nature of business, relationship with Deepak Nanjyani and the details of transactions made with documentary evidence etc. In absence of any details furnished by the assessee, the Assessing Officer issued a notice u/s 144 of the Act asking the assessee to explain as to why the addition should not be made. Thereafter, the assessee filed the requisite details. The Assessing Officer observed from the list of Printed from counselvise.com 4 ITA No.119/RPR/2025 parties from whom the assessee has made purchases along with copy of bank statement and other information that the assessee has made the transactions amounting to Rs.2,59,23,992/- from 10 concerns of Deepak Nanjyani. He, therefore, asked the assessee to explain as to why the total amount of transactions amounting to Rs.2,59,23,992/- should not be added u/s 69C of the Act. Rejecting the various explanations given by the assessee and observing that the genuineness of the transactions of purchases from the various concerns of Deepak Nanjyani remained unexplained and unverifiable, the Assessing Officer, invoking the provisions of section 69C of the Act made addition of Rs.2,59,23,992/-. The Assessing Officer further made addition of Rs.2,59,240/- being the commission incurred by the assessee for the accommodation entries being @ 1% of the total accommodation entries. The Assessing Officer accordingly determined the total income of the assessee at Rs.2,67,80,672/-. 10. Before the Ld. CIT(A) / NFAC, apart from challenging the addition on merit, challenged the validity of re-assessment proceedings. However, the Ld. CIT(A) / NFAC was not satisfied with the arguments advanced by the assessee and dismissed the appeal filed by the assessee. 11. Aggrieved with such order of the Ld. CIT(A) / NFAC the assessee is in appeal before the Tribunal by raising the following grounds: Printed from counselvise.com 5 ITA No.119/RPR/2025 Gr.No.1: \"On the facts and circumstances of the case and in law, notice u/s 148 dt.30-6-21 for AY 16-17 under old regime is barred by limitation as it is digitally signed by ITO on 5-7-21 i.e. beyond the time allowed up to 30-6- 21, by applying Ashish Agarwal (SC) dt.4-5-22; all further action thereafter, ie, SCN u/s 148A(b) dt 20-5-22, order u/s 148A(d) dt.27-7-22 & notice u/s 148 dt.29-7-22 under new regime would also be invalid and therefore, further assessment made u/s 147 dt.10-5-23 would also be invalid and is thus, liable to be quashed. Gr.No.2: \"On the facts and circumstances of the case and in law, approval granted u/s 151 by Pr.CIT dt 6-7-22 is invalid as he was not the specified authority to grant sanction 151(ii) for AY 16-17 under new regime i.e., more than 3 years from the end of the relevant AY; in absence of a valid approval granted by the specified authority i.e Pr.Chief CIT u/s 151(ii), order u/s 148A(d) dt.27-7-22 & notice u/s 148 dt.29-7-22 under new regime would be invalid, and therefore, assessment made u/s 147 dt. 10-5-23 would also be invalid and is thus, liable to be quashed, relied on Rajeev Bansal (2024) (SC); Ashish Agarwal (2022)(SC), Surya Ferrous Alloys P Ltd (2024) (Mum-Trib); Varda Energy & Engg P Ltd (2024) (Raipur-Trib).\" Gr.No.3: \"On the facts and circumstances of the case and in law, CIT(A) has erred in sustaining the addition of Rs.2,59,23,992 on account of bogus purchases of 'Chana' (i.e. raw material); while corresponding sales of 'Chana Dall' (ie, finished), \"Chana Bhusa' & 'Chana Chuni' has not been disputed by the AO/ CIT(A), there is no suppression of yield in production of 'Chana Dall' (ie, finished product), \"Chana Bhusa' & 'Chana Chuni (ie, by product) was found by the AO/CIT(A); books of account has not been rejected, sec 145(3) not been applied and assessment made u/s 143(3), addition of Rs.2,59,23,992 made u/s 69C is unjustified & is liable to be deleted; Ashok Kumar Rungta (2024) (Bom HC); Nitin Ramdeoji Lohia (2022) (Bom HC).\" Gr.No.4: \"On the facts and circumstances of the case and in law, CIT(A) has erred in sustaining the addition of Rs.2,59,23,992 by applying NK Proteins (2017) (SC) wherein suppression in production of 'bye-product' was established in search proceedings & it was covered-up by showing 'bogus purchases' of such 'bye-product' itself, while, there is no suppression of yield in production of 'finished product' (ie, 'Chana Dall') and/or 'bye product' ('Chana Bhusa' & 'Chana Chuni\") was found by the AO/CIT(A) more so, purchase of 'raw material' (ie., \"Chana) has been treated as bogus by the AO/CIT(A) which is, in fact, consumed for production of finished & bye products (ie, 'Chana Dall', 'Chana Bhusa' & 'Chana Chuni') and such Printed from counselvise.com 6 ITA No.119/RPR/2025 production & sales of finished & bye products are not disputed by the AO/CIT(A); impugned addition is baseless, arbitrary & unjustified and is liable to be deleted.\" Gr.No.5: \"On the facts and circumstances of the case and in law, CIT(A) has erred in sustaining the addition of Rs.2,59,240 on the count of 1% commission expenses on alleged bogus purchases of Rs.2,59,23,992 of ‘Chana' (i.e., raw material); addition is merely on presumption & surmises is not sustainable in the eyes of law, is liable to be deleted.\" Gr.No.6: \"The appellant craves leave, to add, urge, after, modify or withdraw any grounds before or at the time of hearing.\" 12. The Ld. Counsel for the assessee at the outset submitted that the assessment year involved is assessment year 2016-17 and the order u/s 148A(d) of the Act as well as notice u/s 148 of the Act are dated 27.07.2022. Referring to the provisions of section 151(ii) of the Act, he submitted that the proper sanctioning authority is Chief Commissioner of Income Tax or Pr.Chief Commissioner of Income Tax. However, in the instant case the Assessing Officer has obtained the approval from the PCIT, therefore, such approval granted u/s 151 of the Act by the PCIT dated 06.07.2022 being not in accordance with law would be invalid and therefore, the assessment made u/s 147 dated 10.05.2023 would also be invalid. 13. Referring to the decision of Hon’ble Madras High Court in the case of Core Logistic Company vs. ACIT reported in (2025) 175 taxmann.com 453 (Mad), he submitted that the Hon’ble High Court in the said decision has held that where the assessee's case was reopened under section 148 and approval had been obtained in Printed from counselvise.com 7 ITA No.119/RPR/2025 terms of section 151(i) from Principal Commissioner, since amount involved was more than Rs.50 lakhs, approval had to be obtained from Principal Chief Commissioner as per section 151(ii) and, thus, initiation of proceedings itself was without any jurisdiction. 14. Referring to the decision of Hon’ble Bombay High Court in the case of Ramesh Bachulal Mehta vs. ITO reported in (2025) 177 taxmann.com 606 (Bom), he submitted that the Hon’ble High Court in the said decision has held that where reassessment proceedings for assessment year 2016-17 were initiated after expiry of three years from end of relevant year, approval under section 151(ii) was mandatorily required from higher authority i.e. Principal Chief Commissioner/Chief Commissioner, and sanction by Principal Commissioner was not valid. Relying on various decisions, he submitted that since the approval was granted u/s 151 of the Act by the PCIT on 06.07.2022 instead of CCIT or Pr.CCIT as more than 3 years from the end of the relevant assessment year has passed, therefore, such approval being invalid, the entire re-assessment proceedings are to be quashed. 15. The Ld. DR on the other hand submitted that the due approval has been taken by the Assessing Officer and merely because the approval has been granted by the PCIT, the re-assessment proceedings should not be treated as invalid. Printed from counselvise.com 8 ITA No.119/RPR/2025 16. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. It is an admitted fact that the assessment year involved in the instant case is assessment year 2016-17 and notice u/s 148 of the Act was issued on 06.07.2022 after obtaining prior approval of the PCIT. A perusal of the order u/s 148A(d) of the Act shows that the same has been issued after obtaining prior approval of the PCIT. The relevant part of the order u/s 148A(d) reads as under: …… …… Printed from counselvise.com 9 ITA No.119/RPR/2025 17. Similarly, notice u/s 148 of the Act dated 29.07.2022 shows that the same has been issued after obtaining the prior approval of the PCIT. The relevant notice issued u/s 148 of the Act, copy of which is placed at pages 8 and 9 of the paper book reads as under: Printed from counselvise.com 10 ITA No.119/RPR/2025 18. Since the assessment year involved in the instant case is assessment year 2016-17 and the notice has been issued on 29.07.2022, therefore, the competent authority who should have given the approval as per provisions of section 151 is the Principal Chief Commissioner or Principal Director General or Chief Commissioner or the Director General of Income Tax. However, in the instant case the approval has been given by the PCIT. 19. We find the Hon’ble Bombay High Court in the case of Ramesh Bachulal Mehta vs. ITO (supra), has held that where reassessment proceedings for assessment year 2016-17 were initiated after expiry of three years from end of Printed from counselvise.com 11 ITA No.119/RPR/2025 relevant year, approval under section 151(ii) was mandatorily required from higher authority i.e. Principal Chief Commissioner/Chief Commissioner, and sanction by Principal Commissioner was not valid. The relevant observations of the Hon’ble High Court read as under: Printed from counselvise.com 12 ITA No.119/RPR/2025 Printed from counselvise.com 13 ITA No.119/RPR/2025 20. Similarly, the Hon’ble Madras High Court in the case of Core Logistic Company vs. ACIT (supra) has held that where the assessee's case was reopened under section 148 and approval had been obtained in terms of section 151(i) from Principal Commissioner, since amount involved was more than Rs.50 lakhs, approval had to be obtained from Principal Chief Commissioner as per section 151(ii) and, thus, initiation of proceedings itself was without any jurisdiction. The relevant observations of the Hon’ble High Court read as under: Printed from counselvise.com 14 ITA No.119/RPR/2025 21. Since in the instant case notice u/s 148 of the Act has been issued on 29.07.2022 which is beyond the period of 3 years from the end of the relevant assessment year i.e. assessment year 2016-17, therefore, the competent authority who should have given the approval as per provisions of section 151 is the Principal Chief Commissioner or Principal Director General or Chief Commissioner or the Director General of Income Tax. However, in the instant case the same has been approved by the PCIT-1, Raipur. Therefore, such approval being not in accordance with law is invalid and consequently the entire re- assessment proceedings are vitiated. We, therefore, quash the re-assessment proceedings. Since the assessee succeeds on this legal ground, the grounds raised on merit by the assessee are not adjudicated being academic in nature. 22. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 1st January, 2026. Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 1st January, 2026 GCVSR Printed from counselvise.com 15 ITA No.119/RPR/2025 आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. 4. The concerned Pr.CIT, Raipur DR, ITAT, Raipur Bench 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune S.No. Details Date Initials Designation 1 Draft dictated on 09.12.2025 Sr. PS/PS 2 Draft placed before author 10.12.2025 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order Printed from counselvise.com "