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TMI Blog2015 (3) TMI 795X X X X Extracts X X X X X X X X Extracts X X X X ..... ut obtaining approval from the competent authority, notice issued under section 148 of the Act is invalid and, therefore, the assessment framed consequent thereto is not a valid assessment and void ab-initio. We accordingly set aside the order of the ld. CIT(A) and annul the assessment. Provisions of section 292BB of the Act is not applicable in the present facts of the case, as the issue in dispute is with regard to the validity of jurisdiction assumed by the Assessing Officer for issuing notice under section 148 of the Act.- Decided in favour of assessee. - ITA No.880/LKW/2014 - - - Dated:- 13-3-2015 - SHRI SUNIL KUMAR YADAV And SHRI. A. K. GARODIA JJ. For the Appellant : Shri. Swarn Singh, C.A. For the Respondent : Shri. O. N. Pathak, D.R. ORDER Per Sunil Kumar Yadav: 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)-II has erred in law and on facts in not considering and appreciating that the appellant, while filing the return of income, had taken into account the deemed sale consideration as required under section 50C of the Income Tax Act, 1961 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and liable to be annulled. 2. That the notice issued under section 148 of the Income Tax Act, 1961 by the Ld. AO was without assuming proper jurisdiction, since the sanction was accorded by the Ld. CIT-1, Kanpur instead of JCIT, Kanpur and therefore the impugned notice under section 148 of the Income Tax Act, 1961 itself was illegal and void-ab-initio and hence, the consequent assessment framed u/s 144/148 of the Income Tax Act, 1961 is without jurisdiction, invalid, void ab initio and liable to be annulled. 3. Since the additional grounds raised by the assessee are legal in nature and go to the root of the case, we admit the same. 4. On these additional grounds, the ld. counsel for the assessee has contended that the Assessing Officer has obtained sanction for issuance of notice under section 148 of the Income-tax Act, 1961 (hereinafter called in short the Act ) for reopening of assessment from the ld. Commissioner of Income-tax instead of Joint Commissioner of Income-tax (JCIT). Since the approval was not obtained from the competent authority, notice issued under section 148 of the Act is void ab-initio and the assessment framed consequent thereto is not a valid assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment under section 143(3) read with section 147 of the Act. The relevant observations of the Tribunal are extracted hereunder for the sake of reference:- 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 reassessment 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recorded by the Assessing 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and further mandatory 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgments including 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 vs. ACIT-1 (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 addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be opened. [Para 5] The second 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 Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ench of the Tribunal in the case of Rahul constructions vs. Dy. CIT (supra). 18. Keeping in view the totality of the facts and circumstances of the case and the judgments referred to above, we are of the considered opinion that sanction accorded by the ld. Commissioner of Income-tax to the Assessing Officer for issuance of notice under section 148 of the Act was not proper, therefore, the Assessing Officer did not assume proper jurisdiction to issue notice under section 148 of the Act. Thus, notice issued under section 148 of the Act is invalid and, therefore, assessment framed consequent thereto is invalid and void ab initio. We accordingly quash the assessment framed consequent to illegal/invalid notice. 7. In the light of the aforesaid legal position, we are of the view that in the instant case, since notice under section 148 of the Act was issued without obtaining approval from the competent authority, notice issued under section 148 of the Act is invalid and, therefore, the assessment framed consequent thereto is not a valid assessment and void ab-initio. We accordingly set aside the order of the ld. CIT(A) and annul the assessment. 8. Since the assessment is annulle ..... X X X X Extracts X X X X X X X X Extracts X X X X
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