9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (6) TMI 385 - AT - Income TaxReopening of assessment u/s 147 - non obtaining valid approval u/s. 151 - HELD THAT - As approving authority JCIT Range-36 while granting approval merely wrote a single word i.e. approved . Respectfully following the case of M/s NC Cable Ltd. 2017 (1) TMI 1036 - DELHI HIGH COURT have no hesitation to hold that in the present case also the exercise of approving powers u/s. 151 of the Act appears to have been only ritualistic and formal rather than based on application of mind to the material placed by the Assessing Officer before the approving authority which could lead to a valid and meaning full approval. Therefore notice u/s. 148 of the Act without obtaining valid approval u/s. 151 of the Act and all consequent reassessment and first appellate order are not validly sustainable and deserve to be quashed and thus hold so. Decided in favour of assessee.
Issues involved:
The issues involved in the judgment are the validity of the order passed by the Commissioner of Income Tax (Appeals), the jurisdiction under section 147 of the Income Tax Act, 1961, the reopening of assessment based on general information from the Investigation Wing, addition of income under section 69C of the Income Tax Act, 1961, reliance on unsigned statements of third parties, and the approval process for issuing notice under section 148 of the Act. Validity of Order and Jurisdiction under Section 147: The appeal was filed against the order of CIT(A)-37 New Delhi for AY 2007-08. The grounds raised by the assessee challenged the validity of the order passed by the Commissioner of Income Tax (Appeals) as wrong and bad in law. The assessee contended that the Assessing Officer's order under section 143(3) r.w.s. 147 was without jurisdiction, and the notice issued under section 148 was invalid due to a lack of proper approval. The argument was supported by references to judicial precedents, emphasizing the need for a valid and meaningful approval process under section 151 of the Act. Reopening of Assessment and Addition of Income: The assessee further argued that the reopening of the assessment based on general information from the Investigation Wing was unjustified. Additionally, the action of adding back Rs. 20,00,500 to the income of the appellant under section 69C of the Income Tax Act, 1961 was contested. It was highlighted that the wife of the appellant, an independent assessee, had paid the course fees, not the appellant. The reliance on unsigned and unauthenticated statements of third parties without providing an opportunity for cross-examination was also criticized. Approval Process for Notice under Section 148: The debate centered on the approval process for issuing the notice under section 148 of the Act. The assessee argued that the approval obtained was merely formal and ritualistic, lacking a meaningful application of mind by the approving authority. Citing judicial precedents, it was contended that the approval process under section 151 of the Act required the competent authority to form an opinion based on a brief but valid assessment of the case. The judgment followed the precedent set by the Hon'ble Jurisdictional High Court, leading to the quashing of the notice under section 148 and subsequent reassessment orders. Conclusion: The Tribunal found in favor of the assessee, holding that the notice under section 148 of the Act was not validly sustainable due to the lack of a valid approval process under section 151. The appeal was partly allowed based on these grounds, and no arguments on the merits of the case were addressed. The judgment emphasized the importance of a meaningful and valid approval process for initiating reassessment proceedings under the Income Tax Act, 1961.
|
