VAIBHAV KISHANLAL JAJOO,AHMEDABAD V. THE DY.CIT, CIRCLE-3(1)(1), AHMEDABAD

ITA 1541/AHD/2025

AI Insights

The case involves Vaibhav Kishanlal Jajoo, who appealed against the order of the Commissioner of Income Tax (Appeals) upholding the reassessment and disallowance of a deduction claimed under section 80GGC for donations to a political party. The reassessment was based on findings from the Investigation Wing that certain political parties were involved in providing bogus deductions. The Tribunal found procedural lapses in the reassessment process, particularly the incorrect authority granting approval for reopening the assessment, leading to the quashing of the reassessment and the related addition to the assessee's income.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 790403 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 05-08-2025
• Other Referred Cases: Dalpat Baraiya vs. ITO
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVINDRA
• Assessee Lawyers: CHHAJED
• Keywords: Reassessment proceedings; Reopening of assessment; Search and seizure; Opportunity of cross examination; Bogus
• Section: 147; 148; 143(3); 132

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, VICE PRESIDENT & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. No.1541/Ahd/2025 (Assessment Year: 2019-20) Vaibhav Kishanlal Jajoo, B/803, Dev Aurum Residency, Anandnagar Cross Roads, Prahladnagar, Ahmedabad-380015 Vs. Deputy Commissioner of Income Tax, Circle-3(1)(1), Ahmedabad [PAN No.AEZPJ4356D] (Appellant) .. (Respondent) Appellant by : Shri M S Chhajed, AR Respondent by: Shri Ravindra, Sr. DR Date of Hearing 04.11.2025 Date of Pronouncement 25.11.2025 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 19.06.2025 passed for A.Y. 2019-20. 2. The assessee has raised the following grounds of appeal: “1. The order passed by the Ld. CIT (A) is against law, equity and justice. 2. The Ld. CIT (A) has erred in law and o facts in upholding the assessment order passed by the Ld. A.O. as the notices and order u/s 148A(b)/148A(d)/148 issued by the Ld. A.O. are void, illegal ad without jurisdiction. 3. The Ld. CIT (A) has erred in law and on facts in upholding the assessment order passed by the Ld. A.O. as the order passed u/s 148 of the Act is non-speaking order. 4. The Ld. CIT (A) has erred in law and on facts in upholding the assessment order passed by the Ld. A.O. as the reopening assessment is bad and illegal and I contravention to Section 149 of the Act. Printed from counselvise.com ITA No. 1541/Ahd/2025 Vaibhav Kishanlal Jajoo vs. DCIT Asst.Year –2019-20 - 2– 5. The Ld. CIT (A) has erred in law and on facts I upholding the assessment order passed by the Ld. A.O. as approval u/s 151 of the Act was granted by PCIT instead of CCIT after 3 years in contravention of Section 151 of the Act. 6. The Ld. CIT (A) has erred I law and on facts in upholding the assessment order passed by Ld. A.O. in contravention of law and instruction of CBDT. 7. The Ld. CIT (A) has erred in law and on facts in upholding the assessment order passed by Ld. A.O. as the Ld. A.O. has not provided an opportunity of cross examination of statements of persons relied upon by him. 8. The Ld. CIT (A) has erred in law and on facts in upholding the assessment order passed by the Ld. A.O. as the Ld. A.O. has not provided an opportunity of personal hearing. 9. The ld. CIT (A) has erred in law and on facts not allowing VD hearing in spite of specific request. 10. The Ld. CIT (A) has erred in law and on facts in upholding the addition of Rs. 8,11,000/- as disallowing the donation u/s 80GCC of the Act. 11. The appellant Craves liberty to add, amend, alter or modify all or any grounds of appeal before final appeal.” 3. The brief facts of the case are that the assessee, an individual, filed his return of income on 13.07.2019 for A.Y. 2019-20 declaring a total income of Rs. 19,61,790/-. During assessment proceedings, the AO noticed that the assessee had claimed a deduction of Rs. 8,11,000/- under section 80GGC of the Act towards donation to a political party namely Manvadhikar National Party. Based on a search and seizure action conducted by the Investigation Wing under section 132 of the Act, it was found that several Registered Unrecognized Political Parties, including Manvadhikar National Party, were engaged in providing bogus deductions under section 80GGC in lieu of cash after deducting commission. Relying on the findings received from the Investigation Wing, the AO formed a belief that income had escaped assessment and reopened the assessment by issuing notice under section 148 of the Act on 02.05.2023 after obtaining the necessary approval and passing an order under section 148A(d). In response, the assessee filed his return. The Printed from counselvise.com ITA No. 1541/Ahd/2025 Vaibhav Kishanlal Jajoo vs. DCIT Asst.Year –2019-20 - 3– AO issued a show cause notice seeking an explanation for the deduction claimed, and although the assessee submitted a reply, the AO held that the explanation was not satisfactory. The AO therefore disallowed the deduction of Rs. 8,11,000/- claimed under section 80GGC and added the same to the total income, completing the reassessment under section 147 r.w.s. 143(3) of the Act. 4. Aggrieved, the assessee filed an appeal before the Ld. CIT(A) challenging the reassessment proceedings and the disallowance of deduction, raising various grounds including that the reopening was illegal, approval was defective, no opportunity for cross-examination or personal hearing was provided, and that the donation was genuine. The Ld. CIT(A), after considering the assessment order and submissions, noted that the Investigation Wing had identified 23 Registered Unrecognized Political Parties involved in providing bogus donation entries and that Manvadhikar National Party was one such entity. The report indicated that donations were routed through banking channels but cash was returned to donors after deducting commission, thereby making the transactions non-genuine. The Ld. CIT(A) held that mere payment through banking channels does not establish genuineness of the donation and concluded that the assessee was a beneficiary of the bogus donation scheme. The Ld. CIT(A) also held that the AO had followed due procedure in reopening the case, including obtaining proper approval and issuing notices under section 148A. In view of these findings, the Ld. CIT(A) upheld the disallowance of the deduction claimed under section 80GGC and dismissed all grounds raised by the assessee. Consequently, the appeal was dismissed. Printed from counselvise.com ITA No. 1541/Ahd/2025 Vaibhav Kishanlal Jajoo vs. DCIT Asst.Year –2019-20 - 4– 5. The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee. 6. During the course of appellate proceedings before us, the learned counsel for the assessee challenged both the validity of the reassessment proceedings and the disallowance of deduction under section 80GGC of the Act. The counsel argued that the order of the Ld. CIT(A) was against law, equity and justice, as the reassessment proceedings initiated by the AO were without jurisdiction. It was contended that the notices issued under sections 148A(b), 148A(d) and 148 were void and illegal since the reopening was carried out beyond three years from the end of the relevant assessment year, and therefore approval for reopening ought to have been obtained from the Principal Chief Commissioner or Chief Commissioner of Income Tax in terms of section 151(ii) of the Act. However, in the present case, the approval was granted only by the PCIT, which rendered the entire reassessment proceedings invalid and void ab initio. The assessee also submitted that the donation made to the political party was genuine and duly supported by banking transactions, and the AO failed to bring any substantive evidence to prove that the assessee received cash back. The counsel relied upon the decision of the Ahmedabad Bench of the Tribunal in the case of Dalpat Baraiya vs. ITO, ITA No. 1692/Ahd/2024, wherein the Tribunal held that reopening beyond three years with approval granted by the PCIT instead of the PCCIT/CCIT was invalid and the reassessment proceedings were quashed. The counsel submitted that the facts and legal issue in the present case were identical and therefore the reassessment proceedings deserved to be quashed following the said decision. Printed from counselvise.com ITA No. 1541/Ahd/2025 Vaibhav Kishanlal Jajoo vs. DCIT Asst.Year –2019-20 - 5– 7. In response, the Ld. DR placed reliance on the observations made by the Assessing Officer and Ld. CIT(Appeals) in their respective orders. 8. We have heard the rival contentions and perused the material on record. It would be useful to reproduce the relevant extracts from the decision in Dalpat Baraiya vs. ITO (supra) for ready reference: “Since the Sanctioning Authority for reopening of assessment was obtained from a wrong Specified Authority, the entire reopening itself is bad in law and liable to be quashed.” 9. The Tribunal further observed: “Clause (ii) of Section 151 describes the Specified Authority namely Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year. It is undisputed fact, the reopening of assessment in the present case is done beyond three years period. Whereas in this case, approval was obtained from the PCIT. The sanction obtained from a wrong Specified Authority is not sustainable in law.” 10. The Tribunal also relied upon the judgment of the Hon’ble Supreme Court in Union of India vs. Rajeev Bansal and held: “Grant of sanction by the appropriate authority is a precondition for the assessing officer to assume jurisdiction under Section 148. Non-compliance with the strict requirement of Section 151 affects jurisdiction to issue notice under Section 148.” 11. Following these findings, the Tribunal in Dalpat Baraiya quashed the entire reassessment proceedings. 12. We find that the reopening of the assessment in the present case was initiated beyond a period of three years from the end of the relevant assessment year, and therefore, as per section 151(ii) of the Act, the approval for issuance of notice under section 148 must be granted by the Principal Chief Commissioner or Chief Commissioner of Income Tax. It is an admitted Printed from counselvise.com ITA No. 1541/Ahd/2025 Vaibhav Kishanlal Jajoo vs. DCIT Asst.Year –2019-20 - 6– position that in the present case the approval was granted only by the PCIT. This issue has been directly considered by this Tribunal in the case of Dalpat Baraiya vs. ITO, ITA No. 1692/Ahd/2024, where under identical circumstances the Tribunal held that approval granted by the PCIT instead of the PCCIT/CCIT was invalid and consequently quashed the reassessment proceedings. 13. Respectfully following the above decision, and in view of the binding legal position laid down therein that sanction obtained from a wrong specified authority renders the reassessment proceedings void, we hold that the notice issued under section 148 and the subsequent reassessment proceedings in the present case are without jurisdiction and liable to be quashed. Once the reassessment itself is invalid, the addition made by the AO disallowing the deduction of Rs. 8,11,000/- under section 80GGC does not survive. 14. In the result, the appeal of the assessee is allowed. This Order pronounced in Open Court on 25/11/2025 Sd/- Sd/- (DR. BRR KUMAR) (SIDDHARTHA NAUTIYAL) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 25/11/2025 TANMAY, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "