2012 (3) TMI 266 - BOMBAY HIGH COURT

Validity of notice issued u/s 148 for re-opening of assessment beyond 4 years – A.Y. 2004-05 purport to be reopened on ground of escapement of income received in A.Y. 2003-04, assessment of which was framed after scrutiny – belief formed on basis of letter of Additional DIT (Investigation) - approval u/s 151 for issue of notice u/s 148 granted by CIT – Held that:- It is impossible to comprehend as to how the Assessment for A.Y. 2004-05 can be reopened on the ground that income escaped assessment in A.Y. 2003-04. Moreover, exfacie the reasons disclosed cannot form the basis of a reason to believe escapement of income for A.Y. 2004 05. Also, letter dated 11.03.2010 of Additional DIT (Investigation) was much prior to the finalization of the Assessment for A.Y. 2003-04 on 27.12.2010. Thus, no new tangible material is on record as required u/s 147.

Further, requirement of Section 151(2) could have only been fulfilled by the satisfaction of the Joint Commissioner that this is a fit case for the issuance of a notice u/s 148. In instant case, approval was granted by CIT. There is no statutory provision here under which a power to be exercised by an officer can be exercised by a superior officer. When the statute mandates the satisfaction of a particular functionary for the exercise of a power, the satisfaction must be of that authority. Therefore in view of non-compliance of the mandatory requirements of Section 147 and 151(2), the notice reopening the assessment cannot be sustained in law - Decided in favor of assessee.