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Bitcoin sale triggered ₹1.24 crore tax addition, but ITAT quashed the reassessment. Here’s why
A Mumbai ITAT has quashed a reassessment involving ₹1.24 crore of bitcoin sale proceeds after finding that approval to reopen the AY 2018-19 assessment came from the wrong authority under Section 151.
A Mumbai taxpayer faced reassessment proceedings for assessment year 2018-19 after the tax department treated ₹1,24,55,654 from bitcoin sales as unexplained investment under Section 69 of the Income-tax Act. The Income Tax Appellate Tribunal, Mumbai Bench, has now quashed the reassessment after finding that the approval obtained for reopening the assessment was not from the authority prescribed under Section 151(ii).
The case concerns Mohammed Hasseb Mohammed Hanif Khan vs Income Tax Officer, Ward 34(2)(1), Mumbai, ITA No. 4713/Mum/2026. The tribunal pronounced its order on 11 September 2026.
The taxpayer's assessment for AY 2018-19 was reopened through a notice issued under Section 148 on 13 April 2022. The taxpayer challenged the reopening and the addition relating to bitcoin sales. He also raised an additional legal ground that the required approval under Section 151 had not been obtained from the competent authority.
