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TMI Blog2014 (11) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the ld. Commissioner of Income-tax, then the same was not an irregularity curable under section 292B of the Act and notice under section 148 of the Act would be invalid and void ab initio - sanction accorded by the CIT to the AO for issuance of notice u/s 148 of the Act was not proper, therefore, the AO did not assume proper jurisdiction to issue notice u/s 148 of the Act - notice issued u/s 148 of the Act is invalid and assessment framed consequent thereto is invalid and void ab initio – Decided in favour of assessee. - IT APPEAL NO. 341 (LKW) OF 2014 - - - Dated:- 27-6-2014 - SUNIL KUMAR YADAV AND A.K. GARODIA, JJ. Swaran Singh for the Appellant. R.K. Ram for the Respondent. ORDER Sunil Kumar Yadav, Judicial Member - This appeal is preferred by the assessee against the order of the ld. CIT(A), inter alia, on the following grounds: 1. That the Ld. C.I.T.(A), Dehradun holding concurrent charge of C.I.T.(A)-II, Kanpur has erred in law and on facts in sustaining the action of the Ld. A.O. with regard to the validity of initiation of proceedings under section 147 of the Income Tax Act, 1961. 2. That while sustaining the initiation of proceedings und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. Commissioner of Income-tax, whereas as per section 151(2) of the Act, sanction is required from the Jt. Commissioner of Income-tax and not from the ld. Commissioner of Income-tax. Since the sanction for reopening of assessment was not accorded by the competent authority, the Assessing Officer did not assume jurisdiction for issuing notice under section 148 of the Act for reopening of assessment. Though the assessee has raised a specific ground before the ld. CIT(A), but the ld. CIT(A) did not comment on it and has confirmed the order of the Assessing Officer sustaining the additions made by him. 3. The ld. counsel for the assessee has invited our attention to the provisions of section 151(2) of the Act, with the submission that in this case assessment was not framed under section 143(3) of the Act, therefore, sub-section (2) of section 151 of the Act will apply to the present case and as per sub-section (2) of section 151 of the Act, no notice shall be issued under section 148 of the Act by an Assessing Officer who is below the rank of Jt. Commissioner of Income-tax after expiry of four years from the end of the relevant assessment year, unless the Jt. Commissioner of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer was required to obtain sanction from the Jt. Commissioner of Income-tax and not from the ld. Commissioner of Income-tax. 7. Having given a thoughtful consideration to the rival submissions and from a careful perusal of the orders of the authorities below, material available on record and the judgments referred to by the assessee, it is evident from the reply given by the Department to the assessee in response to the information sought under R.T.I. Act, 2005 that no assessment under section 143(3) of the Act was done for assessment year 2003-04 prior to the re-assessment under section 147 of the Act. It is also an admitted fact that assessment was reopened after four years from the end of the relevant assessment year. Therefore, before issuing notice under section 148 of the Act, the Assessing Officer was required to obtain sanction/approval from the competent authority prescribed under section 151 of the Act. For the sake of reference, provisions of section 151 of the Act is extracted hereunder: 151. Sanction for issue of notice. (1) In a case where an assessment under sub-section (3) of section 143 or section 147 has been made for the relevant assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer that it is a fit case for issuance of such notice. It has been categorically mentioned in sub-section (2) of section 151 of the Act that sanction was required by the Assessing Officer from the Jt. Commissioner of Income-tax. 10. In the instant case, undisputedly no assessment was framed under section 143(3) of the Act or 147 of the Act as admitted by the Department in reply to the information sought under the R.T.I. Act. It is also an undisputed fact that the assessment was sought to be reopened after four years from the end of the relevant assessment year i.e. 2003-04, as notice under section 148 of the Act was issued on 31.3.2010. It is also an undisputed fact that sanction/approval was accorded by the ld. Commissioner of Income-tax and not by the Jt. Commissioner of Income-tax as mentioned in the assessment order by the Assessing Officer. 11. Therefore, it is abundantly clear that provisions of sub-section (2) of section 151 of the Act is to be applied for issuing notice under section 148 of the Act and as per sub-section (2) of section 151 of the Act, the Assessing Officer was required to obtain sanction/approval from the Jt. Commissioner of Income-tax and in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y condition is that the satisfaction recorded should be independent and not borrowed or dictated satisfaction. The relevant observations of the Hon'ble High Court are extracted hereunder: A notice seeking to reopen assessment under section 148 was issued after the expiry of four years from the end of the relevant assessment year. Since four years had elapsed, the Assessing Officer was required to take approval of the competent authority under section 151(1). The Assessing Officer thus issued notice after taking approval of the Commissioner. The objection of the assessee before the Tribunal was that the Assessing Officer had not taken the approval from the Joint Commissioner, instead, approval was taken from the Commissioner who was not competent to approve even when he was a higher Authority inasmuch as section 151 specifically mentions Joint Commissioner as the Competent Authority. This contention of the assessee was accepted by the Tribunal thereby quashing the assessment proceedings. It was apparent from records that the Assessing Officer had specifically sought the approval of the Commissioner only. Therefore, it could not be said that the Joint Commissioner/A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that of the Supreme Court. [Para 10] 15. Similar view was also reiterated by the Hon'ble Bombay High Court in the case of Ghanshyam K. Khabrani (supra) by holding that when section 151(2) of the Act mandates satisfaction of Jt. Commissioner of Income-tax for issuance of notice under section 148 of the Act, the reopening of assessment with the approval of the ld. Commissioner of Income-tax is not sustainable. The relevant observations of the Hon'ble Bombay High Court are also extracted hereunder for the sake of reference: The assessment of the assessee for assessment year 2004-05 was sought to be reopened by issuing a notice dated 30-3-2011 beyond a period of 4 years from the end of the relevant assessment year. The reasons on the basis of which the assessment for assessment year 2004-05 was sought to be reopened were founded on a letter dated 11-3-2010 received from the Additional Director of Income-tax (Investigation) to the effect that an amount approximately of ₹ 10 crores was received by the assessee during the financial year 2002-03 corresponding to assessment year 2003-04 but for the assessment year 2003-04, only an addition of ₹ 4.9 crores was ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cond ground upon which the reopening is sought to be challenged is that the mandatory requirement of section 151(2) has not been fulfilled. Section 151 requires a sanction to be taken for the issuance of a notice under section 148 in certain cases. In the instant case, an assessment had not been made under section 143(3) or section 147 for assessment year 2004-05. Hence, under sub-section (2) of section 151, no notice can be issued under section 148 by an Assessing Officer who is below the rank of Joint Commissioner after the expiry of 4 years from the end of the relevant assessment year I unless the Joint Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice. The expression 'Joint Commissioner' is defined in section 2(28C) to mean a person appointed to be a Joint Commissioner of Income-tax or an Additional Commissioner of Income-tax under section 117(1). In the instant case, the record before the Court indicates that the Assessing Officer submitted a proposal on 28-3-2011 to the Commissioner (Appeals) through the Additional Commissioner. On 28-3-2011, the Additional Commissioner forwarded the propos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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