AMITA JONEJA,NABHA V. WEALTH TAX OFFICER, ITO WARD, NABHA

WTA 3/CHANDI/2024

AI Insights

The case involves three Wealth Tax Appeals filed by Smt. Amita Joneja against the common orders of the Commissioner of Wealth Tax (Appeals) for the assessment years 2013-14 to 2015-16. The primary contention was the re-opening of the Wealth Tax Assessments by the issuance of notices under section 17 of the Wealth Tax Act, 1957. The assessee argued that the re-opening was procedurally improper as the necessary approval was not obtained from the Joint Commissioner of Income Tax (JCIT) but from the Principal Commissioner of Wealth Tax, which was not in accordance with the statutory requirements. Additionally, it was contended that the notices for the assessment years 2013-14 and 2014-15 were issued beyond the permissible time limit, rendering them time-barred.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772391 (ITAT-CHANDIGARH)
• Appeal Type: Wealth Tax Appeal
• Pronouncement Date: 26-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2015-2016
• Other Referred Cases: CIT Vs SPL's Siddhartha Ltd. (2012) 345 ITR 223, Commissioner of Income Tax Vs Soyuz Industrial Resources Ltd. ITA No.158/2015
• Laws Referred To: Wealth Tax Act, 1957
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK VARDHAN
• Assessee Lawyers: T.N. SINGLA
• Keywords: Competent authority
• Section: 147; 148

Judgement Text

"आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘A’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ WTA Nos. 1, 2 & 3/CHD/2024 Ǔनधा[रण वष[ / A.Ys: 2013-14, 2014-15 & 2015-16 Smt. Amita Joneja, C/o Kansal Singla & Associates, 3rd Floor, SCO 80-81, Sector 17C, Chandigarh. Vs The WTO, ITO Ward, Nabha. èथायी लेखा सं./PAN NO: AALPJ7438E अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent Assessee by : Shri T.N.Singla, CA Revenue by : Shri Vivek Vardhan, Addl. CIT Sr.DR Date of Hearing : 21.08.2025 Date of Pronouncement : 26.08.2025 PHYSICAL HEARING O R D E R PER RAJPAL YADAV, VP The present three Wealth Tax Appeals are directed at the instance of the assessee against the common orders of ld. Commissioner of Wealth Tax (Appeals) [in short ‘the CWT(A)’] dated 08.10.2024 passed for assessment year 2013-14 to 2015-16. 2. These appeals were listed for hearing on 05.06.2025 and the Bench has passed the following order : Printed from counselvise.com WTA Nos.1,2 & 3/CHD/2024 A.Y.2013-14, 2014-15 & 2015-16 2 “The present three appeals are directed at the instance of the assessee against the order of ld.CWT(A) dated 08.10.2024 passed for assessment year 2013-14 to 2015-16. 2. The ld. counsel for the assessee, at the very out submitted that assessee is challenging re-opening of Wealth Tax Assessment by issuing of a notice u/s 17 of the Wealth Tax Act. In his first fold of proposition, he submitted that approval for re-opening the assessment has been taken from Pr. Commissioner of Wealth Tax, Patiala whereas as per the provisions, it ought to have been taken from JCIT. Thus, this re-opening has been without following due procedure contemplated in the Act and not sustainable. 3. In the second fold of submission, he pointed out that if paragraph 6 of the reasons for re-opening is being perused, then it would reveal that AO has observed that approval has been taken from the Pr. CWT, Patiala separately, whereas before issuance of notice and while recording the reasons, approval ought to have been taken. In other words, the reasons supplied to the assessee ought to have been contained the approval granted by the Competent Authority. He also submitted that the reasons do not contain a date when it was recorded and when approval was taken. 4. In his third fold of submission, he pointed out that the time limit to re-open the income tax assessment was enhanced upto 30.06.2021, but no such enhancement was granted under the Wealth Tax Act, therefore, the notice issued by the AO is time barred in assessment year 2013-14 and 2014-15. 5. The ld. Sr.DR is not possessing complete details qua all these propositions, therefore, he seeks time to collect the details from the AO. 6. Hearing is adjourned to 18.08.2025. Meanwhile, ld. Sr.DR will call for record/report from the AO on these propositions. Copy of this order-sheet be supplied to both the parties.” 3. In compliance to the above, the Department has filed a Paper Book submitting requisite details running into 54 pages. Printed from counselvise.com WTA Nos.1,2 & 3/CHD/2024 A.Y.2013-14, 2014-15 & 2015-16 3 4. The ld. counsel for the assessee, at the very outset submitted that assessment orders for the purpose of assessing net wealth of the assessee were reopened by issuance of a notice u/s 17 of the Wealth Tax Act, 1957. He submitted that as per Section 17(1)(B)(b), if no scrutiny assessment u/s 16(3) has been made and four years have been expired, then if the AO intends to reopen the assessments and he is below the rank of Joint Commissioner, then he would have to take prior approval from the JCIT. He submitted that in this year, four years have expired and the ITO ought to have taken the approval from the JCIT, which was not taken, rather he took the approval from Pr. Commissioner of Wealth Tax, Patiala which is not in consonance with the scheme of Wealth Tax Act. He further contended that as far as assessment year 2013-14 and 2014-15 are concerned, the notices issued u/s 147 are time barred. He submitted that the time limit to issue notice was enhanced by the Ministry of Finance vide Notification dated 27.04.2021. The contents of the Notification read as under : MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) NOTIFICATION New Delhi, the 27th April, 2021 Printed from counselvise.com WTA Nos.1,2 & 3/CHD/2024 A.Y.2013-14, 2014-15 & 2015-16 4 S.O. 1703(E).— In exercise of the powers conferred by sub-section (1) of section 3 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 of 2020) (hereinafter referred to as the said Act), and in partial modification of the notifications of the Government of India in the Ministry of Finance, (Department of Revenue) No. 93/2020 dated the 31st December, 2020, No. 10/2021 dated the 27th February, 2021 and No. 20/2021 dated the 31st March, 2021, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub- section (ii), vide number S.O. 4805(E), dated the 31st December, 2020, vide number S.O. 966(E) dated the 27th February, 2021 and vide number S.O. 1432(E) dated the 31st March, 2021, respectively (hereinafter referred to as the said notifications), the Central Government hereby specifies for the purpose of sub- section (1) of section 3 of the said Act that, — (A) where the specified Act is the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act) and, — (a) the completion of any action, referred to in clause (a) of sub-section (1) of section 3 of the said Act, relates to passing of any order for assessment or reassessment under the Income-tax Act, and the time limit for completion of such action under section 153 or section 153B thereof, expires on the 30th day of April, 2021 due to its extension by the said notifications, such time limit shall further stand extended to the 30th day of June, 2021; (b) the completion of any action, referred to in clause (a) of sub-section (1) of section 3 of the said Act, relates to passing of an order under sub-section (13) of section 144C of the Income-tax Act or issuance of notice under section 148 as per time-limit specified in section 149 or sanction under section 151 of the Income-tax Act, and the time limit for completion of such action expires on the 30th day of April, 2021 due to its extension by the said notifications, such time limit shall further stand extended to the 30th day of June, 2021. Explanation.— For the removal of doubts, it is hereby clarified that for the purposes of issuance of notice under section 148 as per time-limit specified in section 149 or sanction under section 151 of the Income-tax Act, under this sub- clause, the provisions of section 148, section 149 and section 151 of the Income- tax Act, as the case may be, as they stood as on the 31st day of March 2021, before the commencement of the Finance Act, 2021, shall apply. (B) where the specified Act is the Chapter VIII of the Finance Act, 2016 (28 of 2016) (hereinafter referred to as the Finance Act) and the completion of any action, referred to in clause (a) of sub-section (1) of section 3 of the said Act, relates to sending an intimation under sub-section (1) of section 168 of the Finance Act, and the time limit for completion of such action expires on the 30th day of April, 2021 due to its extension by the said notifications, such time limit shall further stand extended to the 30th day of June, 2021. [Notification No. 38 /2021/ F. No. 370142/35/2020-TPL] RAJESH KUMAR BHOOT, Jt. Secy. Tax Policy & Legislation Division Printed from counselvise.com WTA Nos.1,2 & 3/CHD/2024 A.Y.2013-14, 2014-15 & 2015-16 5 4.1 According to this Notification, the time limit was enhanced qua income tax proceedings and under the Wealth Tax Act, no such benefit was granted. 5. The ld. DR, on the other hand, contended that as far as assessment years 2013-14 and 2015-16 are concerned, the notices were issued on 30.12.2021. Admittedly they are time barred and no extension of time was granted under the Wealth Tax Act by which limitation to issue notice u/s 17 was enhanced. As far as approval by the PCIT is concerned, it is an approval by a higher authority and therefore, no defect can be attributable to such an approval. He relied upon the orders of Revenue Authorities. 6. We have duly considered the rival contentions and gone through the record carefully. The notices u/s 17 for assessment years 2013-14 and 2014-15 are being issued beyond the time period of six years. Hence, they are barred by limitation and no notice u/s 17 could have been issued upon the assessee. The time limit has not been enhanced under the ‘TOLA’. As far as approval of Principal Commissioner instead of JCIT is concerned, the issue is fully covered in Printed from counselvise.com WTA Nos.1,2 & 3/CHD/2024 A.Y.2013-14, 2014-15 & 2015-16 6 favour of the assessee by the judgement of Hon'ble Delhi High Court in the case of CIT Vs SPL's Siddhartha Ltd. (2012) 345 ITR 223. The ld. counsel for the assessee also placed on record 10 more judgements on this issue but to our mind, this single judgement is sufficient for observing that if a particular authority has been designated to record his or her satisfaction on any particular issue, then it is that authority alone who should apply his or her independent mind to record satisfaction or grant approval. The approval of Pr. Commissioner of Income Tax in favour of these reasons is not an appropriate step, hence this approval is not sustainable. The notice issued u/s 17 is a defective notice and on that basis, no re-assessment could have been made under the Wealth Tax Act. We also made reference upon judgement of Hon'ble Delhi High Court in the case of Commissioner of Income Tax Vs Soyuz Industrial Resources Ltd. ITA No.158/2015 whose copy has been placed in the Paper Book at page Nos. 7 to 11. 7. In view of the above, the re-opening in all these three years is defective and accordingly, we allow the ground of Printed from counselvise.com WTA Nos.1,2 & 3/CHD/2024 A.Y.2013-14, 2014-15 & 2015-16 7 appeal raised by the assessee and quash the re-assessment orders. 8. All the appeals are, accordingly, allowed. Order pronounced on 26.08.2025. Sd/- Sd/- (MANOJ KUMAR AGGARWAL) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE PRESIDENT “Poonam” आदेश कȧ ĤǓतͧलͪप अĒेͪषत/ Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकर आयुÈत/ CIT 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[ फाईल/ Guard File सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "