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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 ..... ment of facts forming part of Appeal Memo (Form No.35) filed before him, hence also the impugned order is contrary to the facts on record, principles of natural justice and equity. 3. That the Ex-parte dismissal of appeal by the Ld. C.I.T.(A)-II without considering and appreciating the facts on record is wholly unjustified insupportable in law and on facts and liable to be quashed. 4. That the authorities below, while completing the assessment and also the appeal ex-parte, have completely ignored the statement of income attached with and forming part of the Return Of Income for the assessment year 2003-2004, hence also the consequent order(s) are illegal and unsustainable. 5. That the authority(ies) below have also erred in law and on facts in treating the alleged addition of Rs. 3,33,795/- as Short Term Capital Gain despite the fact that the capital gain was shown in the return of income as long term capital gain and also the same was subjected to special rate of tax applicable to Long Term Capital Gain. 6. That without prejudice to the above Grounds of Appeal the addition made in the income of the appellant amounts to double addition and is wholly arbitrary, unjustified and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 151 of the Act, the Assessing Officer was required to obtain sanction/approval from the JCIT and if the approval/sanction was obtained from the ld. Commissioner of Income-tax, it is not in accordance with law and in such a situation, the sanction is not valid, therefore, the Assessing Officer could not assume jurisdiction to issue notice under section 148 of the Act. If the notice is issued without obtaining proper approval from the competent authority, the assessment framed under section 147 of the Act is invalid and deserves to be quashed. Copy of the order of the Tribunal is placed on record. 5. The ld. D.R. has placed reliance upon the order of the Assessing Officer. 6. Having carefully examined the orders of the lower authorities in the light of the rival submissions, we find that undisputedly the relevant assessment year involved is 2003-04 and the notice under section 148 of the Act was issued on 30.3.2010. Copy of notice issued under section 148 of the Act is available at page 6 of the compilation of the assessee. As per provisions of section 151(2) of the Act, the Assessing Officer was required to obtain approval from the JCIT before issuance of notice under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unless the Chief Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer aforesaid, that it is a fit case for the issue of such notice. (2) In a case other than a case falling under sub-section (1), no notice shall be issued under section 148 by an Assessing officer, who is below the rank of Joint Commissioner, after the expiry of four years from the end of the relevant assessment year, 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." 8. Under section 151 of the Act, the authorities are identified who can issue notice for reopening of assessment under section 148 of the Act after forming a belief that income chargeable to tax has escaped assessment. As per sub-section (1) of section 151 of the Act where an assessment is framed under sub-section (3) of section 143 or 147 of the Act, no notice shall be issued under section 148 of the Act by an Assessing Officer who is below the rank of Asstt. Commissioner of Income-tax/Dy. Commissioner of Income-tax unless Jt. Commissioner of Income-tax is satisfied on the reasons recorded by the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase when the Assessing Officer has issued notice under section 148 of the Act without assuming valid jurisdiction, notice issued under section 148 of the Act is illegal and void ab initio. 12. We have carefully examined the provisions of section 292BB of the Act as referred to by the Revenue and we find that section 292BB of the Act is presumptive section and on the basis of it, it can be presumed that notice required to be served was served upon the assessee if the assessee joins the assessment proceedings. For the sake of reference, we extract the provisions of section 292BB of the Act as under:- "292BB. Notice deemed to be valid in certain circumstances. Where an assessee has appeared in any proceeding or cooperated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was (a) not served upon him ; or (b) not served upon him in time ; or (c) served upon h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also defines the Income-tax authorities as different and distinct Authorities. Such different and distinct authorities have to exercise their powers in accordance with law as per the powers given to them in the specified circumstances. If powers conferred on a particular authority are arrogated by other authority without mandate of law, it will create chaos in the administration of law and hierarchy of administration will mean nothing. Satisfaction of one authority cannot be substituted by the satisfaction of the other authority. It is trite that when a statute requires, a thing to be done in a certain manner, it shall be done in that manner alone and the Court would not expect its being done in some Either manner. [Para 7] Thus, if authority is given expressly by affirmative words upon a defined condition, the expression of that condition excludes the doing of the Act authorised under other circumstances than those as defined. It is also established principle of law that if a particular authority has been designated to record his/her satisfaction on any particular issue, then it is that authority alone who should apply his/her independent mind to record his/her satisfaction and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment; that the letter of the Additional DIT dated 11-3-2010 was available when the order of assessment for assessment year 2003-04 was passed and, hence, there was absolutely no fresh or tangible material on the basis of which the assessment was sought to be reopened , for assessment year 2004-05; and that under section 151(2) the approval was required to be issued by the Additional Commissioner but in the instant case, the Additional Commissioner had not granted approval, he having forwarded the proposal submitted by the Assessing Officer to the Commissioner. HELD On admitted facts no reasonable person duly informed in law could have formed a reason to believe that there was an escapement of income in assessment year 2004-05. The case of the revenue is that an amount of Rs. 10 crores was received by the assessee during the financial year corresponding to assessment year 2003-04 but has not been brought to tax. That being the position, it is impossible to comprehend as to how the assessment for assessment year 2004-05 can be reopened. The proceedings for assessment year 2003-04 are pending in appeal. The revenue is at liberty to seek recourse to its legitimate powers availa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the satisfaction has to be of the Joint Commissioner. That expression has a distinct meaning by virtue of the definition in section 2(28C). The Commissioner is not a Joint Commissioner within the meaning of section 2(28C). In the instant case, the Additional Commissioner forwarded the proposal submitted by the Assessing Officer to the Commissioner. The approval which has been granted is not by the Additional Commissioner but by the Commissioner. There is no statutory provision under which a power to be exercised by an officer can be exercised by a superior officer. When the statute mandates the satisfaction of a particular functionary for the exercise of a power, the satisfaction must be of that authority. Where a statute requires something to be done in a particular manner, it has to be done in that manner. [Para 6] Once the Court has come to the conclusion that there was no compliance of the mandatory requirements of sections 147 and 151(2), the notice reopening the assessment cannot be sustained in law. [Para 7]." 16. Following the aforesaid judgments of the Hon'ble Delhi and Bombay High Court, the ITAT Delhi Bench in the case of Income Tax Officer vs. Tirupati Cylind ..... X X X X Extracts X X X X X X X X Extracts X X X X
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