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1Clear out junk files and repair common Windows errors2Scan for outdated or missing drivers - takes under a minute3Repair Windows errors before they cause bigger problemsThe Mumbai Income Tax Appellate Tribunal (ITAT) quashed a reassessment concerning a property transaction recorded at ₹2,31,20,000—not because it ruled the purchase tax-free, but because it found the required approval for issuing the reassessment notice after three years had come from the wrong authority. The ruling turned on the dates and the version of section 151 applicable to this case.
What happened in the property reassessment case?
In Vandana Vijay Kumar Chudamasa v. Income Tax Officer, Thane (ITA No. 5433/M/2026, AY 2018-19), the department relied on information about a property transaction valued at ₹2,31,20,000. The ITAT Mumbai Bench F heard the appeal on 21 September 2026 and pronounced its decision on 22 September 2026. The case order is available at IndiaKanoon.
The tribunal’s decision was about whether the reassessment had been validly initiated. It did not decide whether the taxpayer’s explanation for the source of the investment was acceptable.
Why did the dates matter?
For the relevant assessment year, the three-year threshold had passed before the department issued its section 148A(d) order and section 148 notice.
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| Event | Date recorded in the ITAT order |
|---|---|
| End of AY 2018-19 | 31 March 2019 |
| Three-year point | 31 March 2022 |
| Principal Commissioner’s approval | 1 April 2022 |
| Section 148A(d) order and section 148 notice | 2 April 2022 |
| Assessment order under sections 147/144 | 5 February 2024 |
| First appellate order | 11 September 2025 |
The tribunal treated the 2 April 2022 notice and order as having been issued after more than three years had elapsed from the end of the assessment year.
Who had to approve the notice?
As the ITAT described the section 151 provisions applicable to these dates, the approving authority depended on whether three years or less had elapsed or whether more than three years had elapsed. For the latter category, the tribunal held that approval under section 151(ii) was required. The approval in this case had come from the Principal Commissioner of Income-tax, Bengaluru-3, an authority the tribunal associated with section 151(i), and it found that insufficient for the more-than-three-years category.
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The tribunal rejected the argument that information about the high-value property transaction could cure that approval defect. It said: “Information regarding escapement cannot cure approval granted by an authority not empowered by section 151(ii).” It characterized the flaw as jurisdictional, stating: “The defect goes to the root of the assumption of jurisdiction and is not a mere procedural irregularity.”
The order said the matter was directly covered by the Bombay High Court decision Skypak Travels (P.) Ltd. v. ITO, reported as [2026] 185 taxmann.com 963 (Bombay). That is the ITAT’s account of the precedent; the High Court decision itself is not summarized here.
What did the ITAT quash—and what did it leave undecided?
Having held the section 148 notice invalid, the tribunal quashed the reassessment and the consequential appellate order. It left the taxpayer’s other grounds open after deciding the jurisdictional issue.
This was not a ruling that the property purchase was legitimate on its merits, that the source of funds had been accepted, or that a person may skip an income-tax return without consequences. The order records that the taxpayer did not participate in the assessment proceedings or provide the relevant explanation to the lower authorities.
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Why was the appeal heard despite being late?
The appeal to the ITAT was filed 148 days late. The tribunal condoned the delay after considering the taxpayer’s Dubai residence, her reliance on her earlier adviser, the later discovery of the omission through connected proceedings involving her spouse, and her affidavit.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What this ruling means for other taxpayers
The decision illustrates why the timing and approval requirements for reassessment must be checked separately from the information that prompted the tax department to act. In this case, the ITAT considered the relevant dates, applied its reading of section 151 to the more-than-three-years category, and found the approval authority inadequate.
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- Check the assessment year and the date on which the reassessment notice and related order were issued.
- Identify the version of sections 148A and 151 that applies to those facts and dates.
- Verify whether the approval came from the authority specified for the applicable timing category.
- Keep the jurisdictional question distinct from the factual question of whether income escaped assessment or the investment was properly explained.
The applicable statutory text and procedural requirements can depend on the relevant dates and legal changes. This case should not be read as establishing that every notice issued after three years is invalid, or that every property buyer can rely on the same outcome.
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