PINKY HIMANSHU ACHARYA,MUMBAI V. INCOME TAX OFFICER-34(3)(2), MUMBAI, MUMBAI

CO 303/MUM/2025

AI Insights

The case involves an appeal by the Income Tax Officer against the order of the National Faceless Appeal Centre (NFAC), which had quashed the assessment order made against Pinky Himanshu Acharya for the Assessment Year 2017-18. The original assessment added Rs. 27,29,789 as income from accommodation entries, which was later deleted by the Ld. Commissioner on legal grounds, including the improper issuance of notices after the statutory period without the necessary higher-level sanction as required by section 151 of the Income Tax Act. The Tribunal's decision focused on the procedural compliance in the issuance of notices and the legal threshold for reopening assessments.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 825175 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 23 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 29-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Appeal Filed On: 06-11-2025
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIRABHADRA MAHAJAN; LD.
• Assessee Lawyers: SHAH; LD; FILING CROSS
• Keywords: Accommodation entries
• Section: 147; 148

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “C” BENCH : MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No. 6537/MUM/2025 A.Y. : 2017-18 Income Tax Officer- 34(3)(2), Mumbai Room No. 125, 1st Floor, BKC, Mumbai-400051. Vs. Pinky Himanshu Acharya, 702, Heritage,Lajpatrai Road, Vile Parle (W), Mumbai-400056. PAN : ADBPA0620Q (Appellant) ( Respondent ) a n d C.O. No. 303/MUM/2025 (Arising out of ITA No. 6537/M/25) A.Y. : 2017-18 Pinky Himanshu Acharya, 702, Heritage, Lajpatrai Road, Vile Parle (W), Mumbai-400056. PAN : ADBPA0620Q Vs. Income Tax Officer- 34(3)(2), Mumbai Room No. 125, 1st Floor, BKC, Mumbai-400051. (Appellant) {Cross Objector} (Respondent) For Assessee : Shri D.R. Shah, Ld. AR For Revenue : Shri Virabhadra Mahajan, Ld. Sr.DR Date of Hearing : 10-12-2025 Date of Pronouncement : 29-12-2025 Printed from counselvise.com 2 ITA No. 6537/MUM/2025 & C.O. No. 303/MUM/2025 O R D E R Per: Narender Kumar Choudhry, JM: Instant appealand cross objection have been preferred by the Revenueagainst the order dated 28-08-2025 impugned herein, passed by National Faceless Appeal Centre (NFAC), Delhi (in short „NFAC‟)/Ld. Commissioner of Income Tax (in short „Ld. Commissioner‟) u/s. 250 of the Income Tax Act 1961 (in short „the Act‟) for the AY. 2017-18. 2. In the instant case, the AO vide assessment order dt. 26-05-2023 u/s. 147 r.w.s. 144B of the Act, has made an addition of Rs. 27,29,789/-being accommodation entries, which on appeal deleted by the Ld. Commissioner on various aspects, including legal, such as escaped income was of Rs. 27,29,789/- only, on the basis of which, the assessment of the Assessee was reopened u/s. 147 of the Act, after 03 years from the end of the relevant assessment year and, therefore, the Ld. Commissioner by considering peculiar facts and circumstances and the statutory threshold monetary limit and the provisions of the Act u/s. 149(1)(b) of the Act, ultimately held that since three years period from the end of 31-03-2018 had already been elapsed and therefore notice u/s. 148 of the Act could only have been validly issued, if the escaped income was Rs. 50 lakhs or more, as per the provisions of section 149(1)(b) of the Act. 3. The Revenue somehow is in appeal before this court, on various aspects mentioned above, whereas the assessee by filing Cross Objection has also challenged the decision of the Ld. Commissioner Printed from counselvise.com 3 ITA No. 6537/MUM/2025 & C.O. No. 303/MUM/2025 more or less on the ground that AO erred in taking sanction/approval for issuance of notice dt. 27-05-2022 u/s. 148A(b) of the Act and notices dt. 28-07-2022u/s. 148A(d) and 148 of the Act, after elapsing of 03 years from the end of the relevant assessment year i.e., AY. 2017-18, from the Pr.CIT but not from Ld. Pr. CCIT, and thus violated the provisions of section 151 of the Act and therefore notices along with assessment order would be nullity. 4. We have heard the parities and perused the material available on record and specifically the determinations made by the authorities below. As observed above, the escaped income, on the basis of which the case of the Assessee was reopened u/s. 147 of the Act, was not more than the threshold limit of Rs. 50 lakhs and, therefore, in view of the relevant provisions of section 149 of the Act, the Ld. Commissioner has rightly quashed the assessment order. 5. Even otherwise, as claimed by the Assessee in the Cross Objection, the case was reopened after three years from the end of the relevant assessment year and, therefore, sanction of the Ld. Pr.CCIT was required to be taken u/s. 151 of the Act, as prescribed, however, admittedly, sanction for issuing the notices/orders u/s. 148, 148A(b) and 148A(d) of the Act has been taken from Ld. Pr.CIT, but not from the Ld. Pr.CCITand thus, we are agreement with the claim of the Assessee that sanction from Ld. Pr. CIT, was not in consonance with the relevant provisions of law, as enshrined in section 151 of the Act. Printed from counselvise.com 4 ITA No. 6537/MUM/2025 & C.O. No. 303/MUM/2025 6. Thus, on the aforesaid reasons, the Revenue‟s appeal is dismissed, whereas the Cross Objection filed by the Assessee is allowed. Order pronounced in the open court on 29-12-2025 Sd/- Sd/- [BIJAYANANDA PRUSETH] [NARENDER KUMAR CHOUDHRY] ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 29-12-2025 TNMM Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order Dy./Asst. Registrar I.T.A.T, Mumbai Printed from counselvise.com "