2018 (8) TMI 520 - HC - Income Tax

Reopening of assessment - invalid notice - contention of assessee is that the notice was not issued with the prior sanction of the Joint Commissioner, but sanction was accorded by the Additional Commissioner therefore, notice u/s 148 issued by the A.O. was without jurisdiction - Held that - Section 2 of the Act is Definitions Section. Clause (28C) of Section 2 of the Act defines the word Joint Commissioner and explains it means a person appointed to be a Joint Commissioner of Income Tax or an Additional Commissioner of Income Tax under sub-section (1) of Section 117. Thus, the Joint Commissioner includes an Additional Commissioner as well. See Dharam Pal Singh Rao Vs. Income-Tax Officer and another, 2004 (8) TMI 88 - ALLAHABAD HIGH COURT - decided against assessee

Issues:
1. Appeal filed against common order by different assessees.
2. Assessment Year 2008-09.
3. Sale of land by appellant-assessee and treatment of income.
4. Validity of notice issued under Section 148 of the Income Tax Act.
5. Jurisdiction of notice issuance based on sanction authority.
6. Interpretation of the term "Joint Commissioner" under Section 2 of the Act.
7. Precedents supporting the inclusion of Additional Commissioner as Joint Commissioner.
8. Dismissal of appeals based on lack of merit.

Analysis:
1. The appeals were filed under Section 260A of the Income Tax Act against a common order passed by the Income Tax Appellate Tribunal, Delhi Bench. The issue pertained to the assessment year 2008-09, involving the sale of land by the appellant-assessee along with co-owners, leading to a total consideration received. The appellant-assessee claimed exemption on the ground that the income from the sale of agricultural land was not covered by the Act.

2. The Assessing Officer treated a portion of the sale consideration as Long Term Capital Gain, adding it to the appellant's income. The appellant-assessee, aggrieved by the assessment order, appealed to the Commissioner of Income Tax (Appeals) who dismissed the appeal. Subsequently, the appellant-assessees approached the Tribunal challenging the order.

3. The Tribunal dismissed the appeals, rejecting an additional ground raised by the appellant-assessee regarding the jurisdiction of the notice issued under Section 148 of the Act. The appellant argued that the notice was not issued with prior sanction from the Joint Commissioner, thus lacking jurisdiction. However, the Tribunal held that the notice was validly issued with the sanction of the Additional Commissioner.

4. The High Court analyzed the term "Joint Commissioner" as defined in Section 2 of the Act, which includes an Additional Commissioner. Citing precedents from various High Courts, the Court upheld the validity of the notice issued with the sanction of the Additional Commissioner. The Court found no merit in the appeals and dismissed them, ruling in favor of the Revenue and against the assessee based on the established interpretations and legal precedents.

5. In conclusion, the High Court's judgment clarified the jurisdictional aspect of notice issuance under the Income Tax Act, emphasizing the inclusion of an Additional Commissioner within the definition of "Joint Commissioner." The dismissal of the appeals underscored the importance of complying with procedural requirements and established legal interpretations in tax matters.

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