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2015 (5) TMI 217 - HC - Income TaxReopening of assessment - Commissioner quashed the notice under section 148 also upheld by ITAT AS action for sanction by JCIT was without application of mind and as this was done in a mechanical manner - Held that - While according sanction the Joint Commissioner Income Tax has only recorded so Yes I am satisfied . If the case in hand is analysed on the basis of the principle laid down in case of Arjun Singh 1998 (11) TMI 26 - MADHYA PRADESH High Court the mechanical way of recording satisfaction by the Joint Commissioner which accords sanction for issuing notice under section 148 is clearly unsustainable and we find that on such consideration both the appellate authorities have interfered into the matter. In doing so no error has been committed warranting reconsideration. As far as explanation to Section 151 brought into force by Finance Act 2008 is concerned the same only pertains to issuance of notice and not with regard to the manner of recording satisfaction. That being so the said amended provision does not help the revenue - Decided against revenue.
Issues:
Challenge to concurrent orders quashing notices under section 148 of the Income Tax Act. Analysis: The appeals before the Madhya Pradesh High Court involved challenging concurrent orders passed by the Commissioner (Appeals) and the Income Tax Appellate Tribunal regarding the quashing of notices issued under section 148 of the Income Tax Act. The case stemmed from a search conducted at the assessee's premises, leading to a block assessment notice for the period 1.4.1998 to 12.12.2002. Despite returns being filed and processed under section 143(1), a notice under section 148 was issued in 2004 based on recorded reasons. The assessee objected, but the assessment was completed under section 143(3) read with section 147. The Commissioner quashed the notice under section 148 due to the sanction being granted without proper application of mind, citing the Arjun Singh case precedent. The appellant's counsel argued that the Explanation added to section 151 by the Finance Act, 2008, and a circular issued by the department in 2009 clarified that the Joint Commissioner only needs to be satisfied with the reasons recorded by the Assessing Officer, without the requirement to issue the notice personally. Citing judgments from the Gujarat High Court and the Supreme Court, the appellant sought interference in the matter. However, the respondent's counsel relied on a different Gujarat High Court judgment, asserting that for block assessments and reassessments, reopening through a notice under section 148 is not permissible, rendering the entire procedure unsustainable. The High Court considered the contentions of both parties and referred to the Arjun Singh case, emphasizing the necessity of objective satisfaction by the Joint Commissioner for granting sanction under section 148. It was noted that the mechanical recording of satisfaction was unsustainable, as it did not reflect a proper application of mind. The court upheld the decisions of the appellate authorities, finding no error warranting reconsideration. The court clarified that the amended provision in Section 151, introduced by the Finance Act, 2008, solely pertains to the issuance of notice and not the manner of recording satisfaction, thus not aiding the revenue. Ultimately, based on the concurrent findings and legal precedent, the court dismissed the appeals.
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