9911796707
TMI Blog2007 (7) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... ndividual capacity as proprietor of M/s Sri Ram Vijai Kumar, under Section 143(3) of the Act. Subsequently it appears that the petitioner had purchased three bank drafts against cash payment drawn on the State Bank of India, Rail Road, Farrukhabad. The Deputy Director of Income Tax (Investigation) passed on the said information to the Assessing Officer revealing therein that the said three bank drafts, two for ₹ 1,35,000/- (being draft nos. 131050, 131047) and one draft for ₹ 3,00,000/- (being draft No. 131440) were got prepared by M/s Dharam Chandra Suresh Kumar, which were encashed by the assessee. Upon receipt of the said information the Income Tax Officer issued notice dated 25.07.1997 requiring the petitioner to explain the purchase of the drafts, source of investment and the genuineness of the respective parties. The petitioner submitted a detailed reply and explained that all the three drafts were purchased out of cash balance of the sale proceeds and the transactions were recorded in the books of account. No further correspondence took place with regard to the said notice dated 25.07.1997. After about two years the petitioner received a notice dated 08.03.199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued by an Officer below the rank of Assistant Commissioner, the notice and the proceedings pursuant thereto are liable to be quashed being without authority of law. In support of his contention Sri Agrawal has relied upon a decision of this Court in the case of Dr. Shashi Kant Garg Versus Commissioner of Income Tax Others reported in (2006) 285 ITR 158 (All). On the other hand Sri Ashok Kumar, learned counsel for the Revenue has submitted firstly that as the proceedings under section 148 of the Act were initiated upon a report made by the Deputy Director of Income Tax (Investigation), Agra who is an Officer higher in rank than the Joint Commissioner, therefore, it was not necessary for the Income Tax Officer to obtain sanction of the Joint Commissioner before issuing the notice under section 148 of the Act. The second submission on behalf of the revenue is that taking into consideration the provisions of section 292-B of the Act the notice under section 148 of the Act could not be held to be invalid merely for the reason of any mistake, defect or omission. He further submitted that as the Assessing Officer had issued notice dated 25.7.1997 with regard to the purchase of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act. Sub-section (1) of section 151 of the Act in very specific words provides that where assessment has been made under sub-section (3) of section 143 or section 147 of the Act the notice will not be issued under section 148 by the Assessing Officer who is below the rank of Assistant Commissioner or the Deputy Commissioner without the satisfaction of the Joint Commissioner that it was a fit case for issuing of such notice on the reasons recorded by such Assessing Officer. We find from the said provision that the ingredients for invoking said provisions are not existing in the present case. In the case of the petitioner even though the assessment order has been made under sub section (3) of section 143 of the Act, but the Assessing Officer who has issued the notice is below the rank of the Assistant Commissioner as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of four years have expired and the assessment order has been made under sub-section (3) of section 143 or Section 147 of the Act, the notice is to be issued only after the satisfaction has been recorded by either the Chief Commissioner or the Commissioner on the reasons recorded by the Assessing Officer that it is a fit case for issue of such notice. Thus, the Assessing Officer below the rank of the Assistant Commissioner can issue a notice but before issuing the notice, the satisfaction of the Commissioner or the Chief Commissioner of Income Tax is necessarily to be obtained. This would be the position after 1.4.1988 in view of the omission of the words Additional Commissioner in Section 2(16) of the Act by the Direct Tax Laws (Amendment) Act, 1987; and (iii) Where an assessment has not been made under sub-section (3) of Section 143 or Section 147 of the Act and the period of four years from the end of the relevant assessment year had expired, notice under Section 148 of the Act can be issued only by an Officer of the rank of the Joint Commissioner after being satisfied on the reasons recorded by the Assessing Officer that it is a fit case for issue of such notice. Here, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allenge the reasons also for issuing notice. The petitioner could have challenged the notice on two grounds. Firstly on the ground of lack of jurisdiction and secondly on the ground that the reasons of belief were not relevant. In the present case the petitioner after receiving the reasons, as stated above challenged the notice on the ground of jurisdiction / lack of jurisdiction and, therefore, this contention of the Standing Counsel for the Revenue also cannot be accepted. The last contention of the respondent is with regard to the applicability of section 292-B of the Act for seeking validity of the notice. We find that section 292-B of the Act only refers to the notice being not invalid on account of some mistake, defect or omission. In the present case there was neither any mistake or defect or omission but it lacked a positive application of mind by a superior officer i.e. of the level of Joint Commissioner as required under law, which was not obtained. It cannot be said that non application of mind by a superior officer was a defect or mistake or an omission. The Assessing Officer would not have had the jurisdiction to issue notice under section 148 of the Act without the ..... 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