ACIT retains jurisdiction under section 148 despite transfer when income exceeds limits with proper approvals

The ITAT Mumbai upheld the reopening of assessment under section 148, ruling that ACIT had proper jurisdiction despite subsequent transfer to ITO, as the return showed income above prescribed limits and necessary approvals were obtained. The tribunal confirmed the CIT(A)'s decision to sustain 12.5% addition on disputed purchases after rejecting unreliable books of accounts, reducing the AO's original 30% addition. The reasons to believe were validly recorded based on credible information from the Investigation Wing showing income escapement. The assessee's appeal was dismissed.

---

---

Issues Involved:
The judgment involves challenges to the validity of the order based on jurisdiction, notice issuance, reasons for reopening, approval process, lack of inquiry, and procedural compliance.

Challenge to Jurisdiction:
The appellant contested the validity of the order due to the notice being issued by an officer not holding jurisdiction over the case. The reasons for reopening were hastily recorded without proper inquiry, and the approval process was criticized for lacking detailed consideration.

Reasons for Reopening and Approval Process:
The ACIT received information from the Investigation Wing regarding bogus purchases by the appellant, leading to the notice under section 148. Despite objections, the approval by the PCIT was deemed valid as the satisfaction was recorded within the prescribed time limit.

Procedural Compliance and Notice Issuance:
The appellant raised objections to the order being passed by the ITO beyond the monetary limits set by CBDT instructions. The timing of the notice issuance was also disputed, but the acknowledgment of receipt by postal authorities on time was considered valid.

Validity of Disputed Purchases and Assessment:
The appellant failed to produce evidence to prove the genuineness of a transaction, resulting in the treating of purchases as bogus. The AO's addition of 30% of disputed purchases was reduced to 12.5% by the CIT(A), which was upheld as reasonable.

Conclusion:
After careful consideration, the Tribunal rejected the grounds challenging the reopening of assessment and the procedure followed. The addition to the income based on disputed purchases was upheld as reasonable, leading to the dismissal of the appeal.

---