A ₹13.73 lakh credit card bill put him on the tax radar. Then ITAT found the taxman had relied on a provision deleted 37 years ago 

The approval for the reassessment notice cited section 147(b), a provision deleted from the statute 37 years back in 1989. The Income Tax Appellate Tribunal (ITAT), Delhi, quashed the entire proceedings as a result, without the payments themselves ever being examined.

Case history

The tribunal pronounced the order on June 24, 2026. The case concerned Akhil Bansal, a resident of Shamli in Uttar Pradesh with income from salary, rent from house property, business income and income from other sources.

During the period relevant to AY2012-13, Bansal paid credit card bills of ₹13,73,640. His assessment for that year was completed on March 29, 2015. Years later, the assessing officer AO reopened the assessment over credit card payment.

The 37-year-old slip

The tribunal found that the approval form for the reassessment showed the AO seeking approval under section 147(b) of the Income-tax Act, 1961. However, Clause (b) of section 147 was omitted from the statute with effect from April 7, 1989.

Bansal's counsel argued that the approving authority, the Principal Commissioner of Income Tax (PCIT), had granted approval "in a mechanical manner without looking at the reasons and the section under which the Assessing Officer sought approval".

The department's representative, however, insisted the citing of section 147(b) was a clerical error, telling the tribunal that it had been "inadvertently mentioned" and that what was really meant was clause (b) of Explanation 2 to section 147. However, the tribunal was not impressed.

"A bare reading of approval shows that there is specific mention to the provisions of section 147(b) of the Act and not clause (b) to explanation 2 to section 147 as argued by learned Departmental Representative," the order noted. It also recorded that the clause had ceased to be in the statute since 1989.

"Neither the Range Head nor the PCIT has bothered to examine the contents of approval received from the Assessing Officer. This clearly shows complete non-application of mind by the approving authority. The approval for initiating proceedings under section 148 of the Act is mechanical and perfunctory, hence, unsustainable," the ITAT added.

The result

Holding that "the reopening of assessment fails to pass the test of judicial scrutiny since the mandatory approval is without application of mind," the bench held the consequent proceedings vitiated and liable to be quashed.