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Issues Involved:
The judgment involves the issue of the validity of re-assessment proceedings u/s 147 of the Income-tax Act, 1961 based on the approval obtained for issuing notice u/s 148 from the Commissioner of Income-tax instead of the Joint Commissioner as required u/s 151 of the Act. Issue 1: Compliance with Section 151 of the Act The assessee contended that the Assessing Officer (AO) erred in initiating re-assessment proceedings u/s 147 without complying with the mandatory conditions of Section 147 to 151 of the Act. The AO issued notice u/s 148 after obtaining approval from the CIT, Delhi-III, New Delhi, instead of the Joint Commissioner of Income-tax as required u/s 151. The assessee relied on a decision of the Delhi High Court emphasizing the necessity of obtaining approval from the designated authority, the Joint Commissioner of Income-tax, as statutorily provided under Section 151. The AO argued that approval from the Commissioner of Income-tax, with the knowledge of the Additional CIT, satisfied the conditions of Section 151. Decision: The Tribunal noted that the notice u/s 148 was issued after the expiry of four years from the end of the relevant assessment year, 2001-02, by an AO below the rank of Joint Commissioner. As per Section 151(2) of the Act, in such cases, the notice should be issued only if the Joint Commissioner is satisfied that it is a fit case. The approval from the CIT did not meet the statutory requirement of Section 151(2) as per the Delhi High Court's judgment. Therefore, the assessment made by the AO u/s 147 was canceled due to the lack of statutory approval from the designated authority specified u/s 151(2) of the Act. Consequently, the appeal challenging the validity of re-assessment and the addition made by the AO became redundant and were not decided upon. Result: The appeal filed by the assessee was allowed, and the assessment made by the AO u/s 147 was canceled for non-compliance with the statutory conditions of Section 151(2) of the Act.
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