2019 (12) TMI 214 - HC - Income Tax

Reopening of assessment u/s 147 - necessary sanction/approval had not been obtained in terms of section 151 - HELD THAT - In view of the decision of this Court in Ghanshyam K. Khabrani v. Asst. CIT 2012 (3) TMI 266 - BOMBAY HIGH COURT wherein, in identical circumstances, this Court held that where the Act provides for sanction by the Joint Commissioner of Income Tax in terms of section 151, then the sanction by the Commissioner of Income Tax would not meet the requirement of the Act and the reopening notice will be without jurisdiction. Question as proposed does not give rise to any substantial question of law as the said issue has already been concluded against the Revenue

Summary

Issues:
Challenge to order of Income Tax Appellate Tribunal regarding assessment year 2008-09; Validity of reopening proceedings under section 148 without proper sanction/approval as per section 151 of the Income Tax Act.

Analysis:
The appeal under section 260-A of the Income Tax Act, 1961 challenges the order of the Income Tax Appellate Tribunal dated 19 October 2016 concerning the assessment year 2008-09. The Revenue has raised a question regarding the correctness of upholding the order of the Commissioner of Income Tax (Appeals) in quashing the assessment order passed under sections 147 and 143(3) of the Act. The Tribunal's impugned order found that the reopening proceedings under section 148 were flawed as the necessary sanction/approval under section 151 was not obtained. It was noted that although sanction was obtained from the Commissioner of Income Tax, the Act mandates sanction from the Joint Commissioner of Income Tax. Consequently, the Tribunal held that the reopening notice lacked jurisdiction due to the absence of proper sanction.

The counsel for the appellant pointed out that the Revenue's argument regarding the Commissioner of Income Tax being a higher authority and thus fulfilling the requirement of obtaining sanction from the Joint Commissioner of Income Tax was not valid. Reference was made to a previous decision of the Court in Ghanshyam K. Khabrani v. Asst. CIT, where it was held that when the Act specifies sanction by the Joint Commissioner of Income Tax under section 151, sanction by the Commissioner of Income Tax does not suffice, rendering the reopening notice jurisdictionally flawed. Therefore, the question raised by the Revenue was deemed to have been conclusively settled against them by the Court's previous decision in Ghanshyam K. Khabrani v. Asst. CIT. Consequently, the appeal was dismissed as it did not present any substantial question of law in light of the prior judicial pronouncement.