2007 (7) TMI 640 - HC - Income Tax

Summary

Issues Involved:
1. Validity of the notice issued u/s 148 of the Income Tax Act, 1961.
2. Requirement of prior sanction from the Joint Commissioner u/s 151 of the Act.
3. Applicability of Section 292-B of the Act.
4. Timeliness of the writ petition.

Summary:

1. Validity of the Notice Issued u/s 148 of the Income Tax Act, 1961:
The petitioner challenged the notice dated 08.03.1999 issued u/s 148 of the Income Tax Act, 1961, for the assessment year 1996-97. The petitioner argued that the notice was issued without obtaining the necessary prior sanction from the Joint Commissioner, as required by Section 151 of the Act, making it illegal and without authority of law.

2. Requirement of Prior Sanction from the Joint Commissioner u/s 151 of the Act:
The court examined Section 151 of the Act, which mandates that no notice shall be issued u/s 148 by an Assessing Officer below the rank of Assistant Commissioner without the satisfaction of the Joint Commissioner. The court found that the notice was issued by an Income Tax Officer, Hathras, who is below the rank of Assistant Commissioner, and there was no sanction from the Joint Commissioner. This lack of sanction rendered the notice without authority of law. The court referred to the case of Dr. Shashi Kant Garg Versus Commissioner of Income Tax, which supported the requirement of prior sanction from the Joint Commissioner.

3. Applicability of Section 292-B of the Act:
The Revenue argued that the notice should be considered valid under Section 292-B of the Act, which states that a notice shall not be invalid merely due to any mistake, defect, or omission. However, the court held that Section 292-B does not apply in this case as the issue was not a mere defect or omission but a lack of jurisdiction due to the absence of the required sanction from the Joint Commissioner. The court cited the case of Sri Nath Suresh Chand Ram Naresh versus Commissioner of Income Tax, which held that such defects could not be cured by Section 292-B.

4. Timeliness of the Writ Petition:
The Revenue contended that the writ petition was filed after a delay of more than one year. The court noted that the reasons for reopening the assessment were supplied on 28.04.2000, and the writ petition was filed within 90 days of this communication. The court held that the petitioner was entitled to challenge the notice on the ground of lack of jurisdiction after receiving the reasons, and thus, the writ petition was not barred by delay.

Conclusion:
The court concluded that the notice issued u/s 148 of the Act was without jurisdiction due to the lack of sanction from the Joint Commissioner as required by Section 151 of the Act. Consequently, the notice dated 08.03.1999 and the proceedings pursuant thereto were quashed. The writ petition was allowed, and no order as to costs was made.