Sh. Yogendra Singh, Muzaffarnagar V. ITO, Muzaffarnagar

ITA 1304/DEL/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6791 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 15-02-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 06-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ROBIN RAWAL SENIOR
• Assessee Lawyers: PREM PRAKASH; MASHKOOR AHMED S
• Section: 143(3); 142(1); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH SMC-I : NEW DELHI) BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER ITA NOS.1297 & 1298/DEL./2014 (ASSESSMENT YEARS : 2004-05 & 2005-06) SHRI MAHENDRA SINGH, VS. ITO, WARD 2 (1), C/O SHRI MASHKOOR AHMAD, ADVOCATE MUZAFFARNAGAR. 10, DR. SURESH MARKET, BHAGAT SINGH ROAD, MUZAFFARNAGAR 251 002. ITA NOS.1300 & 1301/DEL./2014 (ASSESSMENT YEARS : 2004-05 & 2005-06) SMT. RAJ KUMARI, VS. ITO, WARD 2 (1), C/O SHRI MASHKOOR AHMAD, ADVOCATE MUZAFFARNAGAR. 10, DR. SURESH MARKET, BHAGAT SINGH ROAD, MUZAFFARNAGAR 251 002. ITA NOS.1302 & 1303/DEL./2014 (ASSESSMENT YEARS : 2004-05 & 2005-06) SHRI ANUJ KUMAR, VS. ITO, WARD 2 (1), C/O SHRI MASHKOOR AHMAD, ADVOCATE MUZAFFARNAGAR. 10, DR. SURESH MARKET, BHAGAT SINGH ROAD, MUZAFFARNAGAR 251 002. ITA NOS.1304 & 1305/DEL./2014 (ASSESSMENT YEARS : 2004-05 & 2005-06) SHRI YOGENDRA SINGH, VS. ITO, WARD 2 (1), C/O SHRI MASHKOOR AHMAD, ADVOCATE MUZAFFARNAGAR. 10, DR. SURESH MARKET, BHAGAT SINGH ROAD, MUZAFFARNAGAR 251 002. (APPELLANT) (RESPONDENT) ITA NOS.1297 & 1298/DEL./2014 ITA NOS.1300 TO 1305/DEL./2014 2 ASSESSEE BY : S/SHRI PREM PRAKASH & MASHKOOR AHMED , ADVOCATES REVENUE BY : SHRI ROBIN RAWAL, SENIOR DR DATE OF HEARING : 15.02.2016 DATE OF PRONOUNCEMENT : 15.02.2016 O R D E R ALL THESE APPEALS HAVE BEEN FILED AGAINST THE RESP ECTIVE ORDERS OF THE CIT (APPEALS). 2. ALTHOUGH IN EACH OF THE APPEAL THE ASSESSEE HAS TAKEN AS MANY AS 10 GROUNDS OF APPEAL BUT DID NOT PRESS GROUNDS NO.3 & 9, THEREFORE, BOTH THESE GROUNDS STAND DISMISSED AS NOT PRESSED. 3. GROUNDS NO.1, 2, 7, 8 & 10 WERE NOT ARGUED BY TH E LD. COUNSEL DURING THE COURSE OF THE HEARING. 4. THE ONLY GROUND ON WHICH THE LD. COUNSEL RELIED AND ARGUED ARE GROUNDS NO.4, 5 & 6 WHICH RELATE TO THE APPLICABILI TY OF THE PROVISIONS OF SECTION 151 OF THE INCOME-TAX ACT, 1961 (HEREINAFTE R THE ACT). 5. ALL THE PARTIES (ASSESSEES) AGREED THAT ALL THES E APPEALS BE DECIDED ON THE BASIS OF FACTS INVOLVED IN ITA NO.1298/DEL/2014 AS THE FACTS INVOLVED IN ALL THESE APPEALS ARE COMMON. 6. THE BRIEF FACTS OF THE CASE ARE THAT THE ACTION U/S 147 WAS INITIATED IN ALL THESE CASES BY ISSUING NOTICE U/S 148(2) DATED 28.03.2011. THE NOTICES CAME BACK UNSERVED WITH THE POSTAL REMARK REFUSED TO TAKE THE DELIVERY. THEREAFTER, NOTICE U/S 142(1) OF THE ACT DATED 27.0 7.2011 CALLING FOR THE FILING OF THE INCOME-TAX RETURN WAS SENT THROUGH SP EED POST ASKING TO MAKE ITA NOS.1297 & 1298/DEL./2014 ITA NOS.1300 TO 1305/DEL./2014 3 THE COMPLIANCE FOR 10.08.2011. THE NOTICE HAS BEEN ISSUED IN EACH OF THE CASE ON THE BASIS OF THE INQUIRY CONDUCTED AFTER TH E RECEIPT OF THE TEP THAT THE ASSESSEE HAS SOLD APPROXIMATELY 25 BIGHA LAND A FTER PLOTTING @ RS.800/- PER SQ.YARDS BUT THE SALE DEEDS WERE EXECU TED AT THE CIRCLE RATE @ RS.300/- PER SQ.YARDS. DURING THE IMPUGNED ASSESSM ENT YEAR, THE ASSESSEE SOLD THE PLOTS OF LAND MEASURING 4,779.79 SQ.MTRS. ALONG WITH OTHER PERSONS HAVING TOTAL CIRCLE VALUE AT RS.37,36,562/- IN GOVE RNMENT RECORD. IT HAD VALUED AT RS.20,000/- PER BIGHA AS ON 01.04.1981. THE ASSESSEES SHARE WAS 1/4 TH AT RS.8,02,584/- WHICH WAS ADDED IN THE INCOME OF THE ASSESSEE. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT (A) AND CHALLENGED THE INITIATION OF THE PROCEEDINGS U/S 147 AS WELL AS TH E FACT THAT THERE WAS NO VALID SANCTION U/S 151 PRIOR TO THE ISSUE OF THE NO TICE U/S 148. THE CIT (A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 7. I HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONS IDERED THE SAME. I NOTED THAT THE NOTICE U/S 148 DATED 28.03.2011 FOR THE AFORESAID YEAR HAS BEEN ISSUED. THE SAID NOTICE, THEREFORE, HAS BEEN ISSUED AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR 2005 -06. THE ASSESSEE HAS NOT FILED ANY RETURN FOR THE ASSESSMENT YEAR 2005-0 6. THE NOTICE HAS BEEN ISSUED BY THE INCOME-TAX OFFICER, WARD 2 (1). THE AO SENT THE PROPOSAL FOR INITIATING THE PROCEEDINGS FOR THE APPROVAL OF THE COMMISSIONER OF INCOME-TAX/CENTRAL BOARD OF DIRECT TAXES, THE COPY OF WHICH IS AVAILABLE AT PAGE 8 OF THE PAPER BOOK. THE ADDL. COMMISSIONE R VIDE HIS LETTER DATED ITA NOS.1297 & 1298/DEL./2014 ITA NOS.1300 TO 1305/DEL./2014 4 25.03.2011 GAVE THE APPROVAL FOR ISSUE OF THE NOTIC E U/S 148 IN ALL THE CASES BY OBSERVING AS UNDER :- .. PLEASE REFER TO YOUR LETTER F.NO.NIL DATED NIL ON T HE ABOVE SUBJECT. IN THIS CONNECTION APPROVAL FOR ISSUING OF NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 IS HEREBY ACCORDED IN THE FOLL OWING CASES FOR A.Y. 2004-05 AND 2005-06. THE PRESCRIBED PROFORMA DULY APPROVED, ARE ENCLOSED HEREWITH. 1. SHRI MAHENDER SINGH S/O LATE SHRI BARU SINGH, KUKUR A, M.NAGAR 2. SMT. KAILASHWATI W/O LATE SHRI SATYAVEER SINGH, KUK URA, M.NAGAR 3. SHRI YOGENDER SINGH S/O LATE SHRI KIRAN SINGH, KUKU RA, M.NAGAR 4. SHRI ANUJ KUMAR S/O LATE SHRI BRIJ PAL SINGH, KUKUR A, M.NAGAR 5. SMT. RAJ KUMARI W/O LATE SHRI BRIJ PAL SINGH, KUKUR A, M.NAGAR SD/- (SANJAY TRIPATHI) ADDL. COMMISSIONER OF INCOME TAX RANGE 2, MUZAFFARNAGAR. THE SAID APPROVAL WAS RECEIVED IN THE OFFICE OF THE INCOME-TAX OFFICER, WARD 2 (1), MUZAFFARNAGAR ON 29.03.2011 WHICH FACT IS APPARENT FROM THE RECEIPT DATE BEING MARKED ON THE SAID LETTER AVAILA BLE AT PAGE 7A OF THE PAPER BOOK. THIS LETTER CLEARLY SHOWS THAT THE APP ROVAL FOR THE ISSUE OF THE NOTICE U/S 148 HAS BEEN RECEIVED BY THE AO AFTER TH E ISSUE OF THE NOTICE U/S 148 (2). NOW, THE QUESTION ARISES BEFORE ME WHETHE R THE APPROVAL SO GRANTED IS IN ACCORDANCE WITH THE PROVISIONS OF SEC TION 151 OF THE ACT. THE PROVISIONS OF SECTION 151 AS WAS IN EXISTENCE PRIOR TO ITS AMENDMENT BY THE FINANCE ACT, 2015, AS WAS IN EXISTENCE ON THE DATE WHEN THE NOTICE U/S 148(2) WAS ISSUED READ AS UNDER :- ITA NOS.1297 & 1298/DEL./2014 ITA NOS.1300 TO 1305/DEL./2014 5 151. 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 YEAR, NO NOTICE SHALL BE ISSUED UNDER SECTION 148 BY AN ASSESSING OFFICER, WHO IS BELOW THE RANK OF ASSISTA NT COMMISSIONER OR DEPUTY COMMISSIONER, 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 : PROVIDED THAT, AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, NO SUCH NOTICE SHALL BE ISSUED UNL ESS THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL COM MISSIONER OR COMMISSIONER IS SATISFIED, ON THE REASONS RECORDED BY THE ASSESSING OFFICER AFORESAID, THAT IT IS A FIT CASE FOR THE IS SUE OF SUCH NOTICE. (2) IN A CASE OTHER THAN A CASE FALLING UNDER SUB-S ECTION (1), NO NOTICE SHALL BE ISSUED UNDER SECTION 148 BY AN ASSESSING O FFICER, 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 C OMMISSIONER IS SATISFIED, ON THE REASONS RECORDED BY SUCH ASSESSING OFFICER, THAT IT IS A FIT CASE FOR THE ISSUE OF SUCH NOTICE. EXPLANATION.FOR THE REMOVAL OF DOUBTS, IT IS HEREB Y DECLARED THAT THE JOINT COMMISSIONER, THE PRINCIPAL COMMISSIONER OR C OMMISSIONER OR THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER, AS THE CASE MAY BE, BEING SATISFIED ON THE REASONS RECORDED BY THE ASSE SSING OFFICER ABOUT FITNESS OF A CASE FOR THE ISSUE OF NOTICE UNDER SEC TION 148, NEED NOT ISSUE SUCH NOTICE HIMSELF. SUB-SECTION (1) IS APPLICABLE IN CASE WHERE THE ASS ESSMENT HAS BEEN COMPLETED U/S 143(3) OR SECTION 147 AND THE NOTICE HAS BEEN ISSUED AFTER THE EXPIRY OF FOUR YEARS. SUB-SECTION (2) IS APPLI CABLE IN A CASE OTHER THAN THE CASE NOT FALLING UNDER SUB-SECTION (1). IN TH E CASE OF THE ASSESSEE, IT IS A FACT THAT NO ASSESSMENT WAS EARLIER MADE U/S 143( 3) OR 147 AND, THEREFORE, THE CASE OF THE ASSESSEE FALLS WITHIN THE PROVISION S OF SECTION 151(2). THIS SECTION MANDATES THAT THE NOTICE U/S 148 CANNOT BE ISSUED BY AN AO WHO IS BELOW THE RANK OF JOINT COMMISSIONER AFTER THE EXPI RY OF FOUR YEARS FROM THE RELEVANT ASSESSMENT YEAR UNLESS THE JOINT COMMI SSIONER IS SATISFIED ON THE REASONS RECORDED BY SUCH AO THAT IT IS A FIT CA SE FOR THE ISSUE OF SUCH ITA NOS.1297 & 1298/DEL./2014 ITA NOS.1300 TO 1305/DEL./2014 6 NOTICE. THERE IS AN EXPLANATION GIVEN THEREUNDER, ACCORDING TO WHICH THE JOINT COMMISSIONER BEING SATISFIED ON THE REASONS R ECORDED BY THE AO ABOUT THE FITNESS OF A CASE FOR THE ISSUE OF NOTICE U/S 148 NEED NOT TO ISSUE SUCH NOTICE HIMSELF. FROM THE COPY OF THE NOTICE W HICH IS AVAILABLE AT PAGE 7, IT IS APPARENT THAT THE NOTICE IN THIS CASE HAS BEEN ISSUED AFTER THE EXPIRY OF FOUR YEARS ON 28.03.2011. THE ADDL. COMM ISSIONER APPROVED THE ISSUING OF THE NOTICE U/S 148 OF THE ACT VIDE L ETTER DATED 25.03.2011. THE SAID LETTER WAS RECEIVED BY THE INCOME-TAX OFFI CER ON 29.08.2011. THE LETTER HAS NOT BEEN RECEIVED ON 25.03.2011. THE PR OVISIONS OF SECTION 151(2) IS EXPLICITLY CLEAR THAT THE NOTICE U/S 148 CANNOT BE ISSUED UNLESS THE JOINT COMMISSIONER IS SATISFIED ON THE REASONS RECO RDED BY SUCH AO THAT IT IS A FIT CASE FOR THE ISSUE OF THE NOTICE. THIS CL EARLY DENOTES THAT THE SATISFACTION MUST BE RECORDED BY THE JOINT COMMISSI ONER BEFORE THE ISSUE OF THE NOTICE AND THE AO CAN ISSUE THE NOTICE ONLY AFTER THE SATISFACTION OF THE JOINT COMMISSIONER. I HAVE GONE THROUGH THE LE TTER DATED 25.03.2011 WHICH STATES APPROVAL FOR THE ISSUE OF NOTICE U/S 148 REG.. THIS LETTER SUBSEQUENTLY TALKS OF ACCORDING OF THE APPROVAL AND FURTHER ISSUE OF THE NOTICE U/S 148. SECTION 151, IN MY OPINION, DOES N OT TALK OF APPROVAL OF THE ACTION OF THE AO BUT REQUIRES SATISFACTION OF T HE JOINT COMMISSIONER ON THE REASONS RECORDED BY THE AO THAT IT IS A FIT CAS E FOR THE ISSUE OF SUCH NOTICE. THERE IS DIFFERENCE IN THE WORD SATISFACT ION AND APPROVAL. APPROVAL CAN BE SUBSEQUENT TO THE OCCURRENCE OF THE EVENTS WHILE THE ITA NOS.1297 & 1298/DEL./2014 ITA NOS.1300 TO 1305/DEL./2014 7 SATISFACTION, AS PER THE PROVISIONS OF SECTION 151, HAS TO BE PRIOR TO THE ISSUE OF THE NOTICE. SATISFACTION REPRESENTS A DEC ISION BASED ON THE MATERIAL ON RECORD. THE DECISION MAY NOT BE CONCLUSIVE. IT REQUIRES APPLICATION OF MIND BY THE AUTHORITY AND TO GIVE SPECIFIC FINDING AFTER LOOKING INTO THE REASONS RECORDED BY THE AO THAT IT IS A FIT CASE FO R THE ISSUE OF SUCH NOTICE. MERELY APPROVING OF THE NOTICE, IN MY OPINION, WILL NOT SATISFY THE INGREDIENTS AS LAID DOWN U/S 151 OF THE ACT. ON AP PROVAL FROM THE LETTER DATED 25.03.2011, I NOTED WHAT THE ADDL. COMMISSION ER OF INCOME-TAX HAS APPROVED THE ISSUING OF THE NOTICE U/S 148. HE HAS NOT GIVEN ANY FINDING THAT ON THE BASIS OF THE REASONS RECORDED BY THE AO , HE IS SATISFIED THAT IT IS A FIT CASE FOR THE ISSUE OF THE NOTICE U/S 148 OF T HE ACT. WHAT HE HAS DONE, HE HAS APPROVED THE PROFORMA SENT BY THE AO. THIS APPROVAL HAS ALSO BEEN RECEIVED BY THE AO ON 29.08.2011 I.E. AFTER THE ISS UE OF THE NOTICE U/S 148 DATED 28.03.2011. THIS, IN MY OPINION, DOES NOT ME ET THE REQUIREMENT OF THE PROVISIONS OF SECTION 151 (2) AND, THEREFORE, I QUASH THE NOTICE ISSUED U/S 148 (2) AS THIS WAS ISSUED MERELY IN A MECHANIC AL MANNER WITHOUT APPLYING THE MIND BY THE ADDL. COMMISSIONER TO THE REASONS RECORDED BY THE AO. 8. I HAVE GONE THROUGH THE DECISION OF HONBLE SUPR EME COURT IN THE CASE OF CHHUGAMAL RAJPAL VS. S.P. CHALIHA & ORS. 79 ITR 603. THIS DECISION, IN MY OPINION, SUPPORTS THE CASE OF THE A SSESSEE. SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE DELHI HIGH COURT IN T HE CASE OF CENTRAL ITA NOS.1297 & 1298/DEL./2014 ITA NOS.1300 TO 1305/DEL./2014 8 INDIA ELECTRICITY SUPPLY CO. LTD. VS. ITO 333 ITR 237. HONBLE ALLAHABAD HIGH COURT IN THE CASE OF DR. SHASHI KANT GARG V. COMMISSIONER OF INCOME-TAX 285 ITR 158 UNDER PARA 33 OF ITS ORDER HELD THAT IT IS NOW WELL SETTLED THAT A NOTICE ISSU ED WITHOUT OBTAINING THE PRIOR SANCTION OF THE AUTHORITY MENTIONED IN THE PR OVISIONS OF SECTION 151 WHERE ITS PROVISO TO SUB-SECTION (1) OR THE SUB-SEC TION (2) WOULD BE INVALID AND THE ENTIRE PROCEEDINGS TAKEN IN PURSUANCE THERE OF IS LIABLE TO BE QUASHED AND THE SAME WOULD BE WITHOUT JURISDICTION. I ACCORDINGLY QUASH THE ORDER PASSED IN CONSEQUENCE OF ISSUING OF THE N OTICE U/S 148 (2) OF THE ACT. 9. IN THE RESULT, ALL THE APPEALS ARE PARTLY ALLOWE D. ORDER PRONOUNCED IN OPEN COURT ON THIS 15 TH DAY OF FEBRUARY, 2016. SD/- (P.K. BANSAL) ACCOUNTANT MEMBER DATED THE 15 TH DAY OF FEBRUARY, 2016 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.