2013 (7) TMI 58 - AT - Income Tax

Reopening of assessment Commissioner of Income Tax ordered reopening of assessment without approval of Joint Commissioner Held that - as per proviso to Section 151(2), approval of Joint Commissioner required Approval not granted by Joint Commissioner, instead taken from Commissioner of Income- tax Reopening of assessment invalid therefore quashed Following decision of CIT Vs. SPL s Siddhartha Ltd 2011 (9) TMI 640 - DELHI HIGH COURT Decided in favor of assessee.

Summary

Issues:
1. Validity of initiation of proceedings under section 147 of the Income-tax Act.
2. Requirement of approval from Joint Commissioner for reopening assessment.
3. Impact of approval by Commissioner of Income Tax instead of Joint Commissioner on the validity of assessment.

Analysis:
1. The first issue raised by the assessee was the validity of the initiation of proceedings under section 147 of the Income-tax Act. The counsel argued that the Assessing Officer did not have valid reasons to believe that income had escaped assessment. It was contended that the approval by the Commissioner of Income Tax, instead of the required Joint Commissioner, rendered the reopening of assessment invalid. The counsel relied on a decision by the Hon'ble Jurisdictional High Court in a similar case to support the argument.

2. The second issue pertained to the requirement of approval from the Joint Commissioner for reopening assessment under Section 151(2) of the Income-tax Act. The counsel highlighted that the statute mandated approval from the Joint Commissioner, and the approval by the Commissioner of Income Tax was not in accordance with the law. The counsel referenced a specific case where it was held that the notice issued without the approval of the Joint Commissioner was not valid.

3. The final issue addressed the impact of the approval by the Commissioner of Income Tax, instead of the Joint Commissioner, on the validity of the assessment. The Tribunal observed that the approval process did not comply with the statutory requirement of approval from the Joint Commissioner. Citing the decision of the Hon'ble Jurisdictional High Court, the Tribunal held that the assessment reopened with the approval of the Commissioner of Income Tax was not valid. Consequently, the Tribunal quashed the reopening of assessment for the relevant years, leading to the consequential assessment orders being annulled as well.

In conclusion, the Tribunal allowed the appeals of the assessee based on the invalidity of the reopening of assessment due to the lack of approval from the Joint Commissioner as required by law. The decision was pronounced on 28th June 2013.