Shri Ashok Ramanlal Patel, HUF, Surat V. The Income Tax Officer, Intl. Taxn., Surat

ITA 148/AHD/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2068 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 20-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Assessee Lawyers: RASESH SHAH
• Keywords: Validity of assessment; Competent authority; Reassessment proceedings
• Section: 148; 143(3); 142(1)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND MS MADHUMITA ROY, JUDICIAL MEMBER ./ ITA NO.148/AHD/2016 [ [ / ASSTT. YEAR:2008-2009 SHRI ASHOK RAMANLAL PATEL , HUF 25-B SARJAN SOCIETY, ATHWALINES SURAT-395007. PAN: AABHA9394N VS INCOME TAX O FF I CER, (INTL. TAXN), SURAT. (APPLICANT) (RESPONENT) ASSESSEE BY : SHRI RASESH SHAH, A.R REVENUE BY : MS ANUPAMA SINGLA, SR.D.R / DATE OF HEARING : 20/11/2018 / DATE OF PRONOUNCEMENT: 22/11/2018 / O R D E R PER MS MADHUMITA ROY, JUDICIAL MEMBER: THE INSTANT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 04/11/2015, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-13, AHMEDABAD, ARISING OUT OF THE ORDER DATED 28/03/2014, PASSED U/S.143(3) R.W.S 147 OF THE INCOME TAX ACT 1961, BY THE ITO,SURAT, FOR THE ASSESSMENT YEAR 2008-2009. 2. IN THIS PARTICULAR CASE THE ASSESSEE HAS BASICALLY CHALLENGED THE ORDER OF CONFIRMATION OF VALIDITY OF ASSESSMENT ORDER MADE U/S.147 OF ITA NO.148/AHD/2016 FOR A.Y.2008-2009 2 THE ACT, VIRTUALLY THE RE-OPENING OF ASSESSMENT MADE BY THE LD.AO FOR THE ASSESSMENT YEAR 2008-09. THE ASSESSEE CASE WAS RE-OPENED BY AND UNDER THE NOTICE ISSUED U/S.148 OF THE ACT, DATED 20/07/2012, IN RESPONSE WHEREOF THE ASSESSEE HAS FILED ITS RETURN OF INCOME ON 18/09/2013, DECLARING TOTAL INCOME OF RS.6,915/- BEING INTEREST INCOME. THE MATTER WAS SUBSEQUENTLY TRANSFERRED FROM NAVSARI TO SURAT ON 18/10/2013, NOTICES U/S.143(2) 142(1) ALONG WITH THE QUESTIONNAIRE WAS ALSO ISSUED ON 22/01/2013, DIRECTING THE ASSESSEE TO FURNISH DETAILS. THE ASSESSEE THEREAFTER REQUESTED FOR THE REASONS RECORDED FOR RE-OPENING OF THE ASSESSMENT WHICH WAS PROVIDED TO HIM BY AND UNDER THE LETTER DATED 20/11/2013. THE ASSESSE FILED OBJECTION TO SUCH NOTICES U/S.148 OF THE ACT, INTER ALIA THAT RE-OPENING IS NOT VALID SINCE THE SAME WAS DONE AFTER EXPIRY OF FOUR YEARS FROM THE DATE OF COMPLETION OF ASSESSMENT ORDER FOR ASSESSMENT YEAR 2008-09 AS ALSO ON THE MERIT OF THE MATTER. HOWEVER, THE LD.AO ULTIMATELY WORKED OUT THE LONG TERM CAPITAL GAIN AT RS.5,21,200/- AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSEESSEE AGAINST WHICH THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY WHO IN TURN CONFIRMED THE SAME. HENCE, THE INSTANT APPEAL BEFORE US. 3. AT THE TIME OF HEARING OF THE INSTANT APPEAL THE LD.COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE CASE WAS RE-OPENED BY AND UNDER THE NOTICE DATED 20/07/2013 ISSUED U/S.148 OF THE ACT, AFTER FOUR YEARS FROM THE DATE OF COMPLETION OF ORDER OF THE ASSESSMENT FOR ASSESSMENT YEAR 2008-09. HE FURTHER SUBMITTED THAT IN TERMS OF SECTION 151 OF THE ACT, FOR RE-OPENING OF ASSESSMENT U/S.148 OF THE ACT SANCTION IS REQUIRED FROM THE HIGHER AUTHORITIES. IT WAS ALSO CONTENTED BEFORE US BY AND UNDER LETTER DATED 06/11/2017, THE ASSESSEE HAS REQUESTED TO PROVIDE A COPY OF SUCH SANCTION SO OBTAINED FROM THE HIGHER AUTHORITY FROM REOPENING OF HIS CASE U/S.148 OF THE ACT. HOWEVER, NO REPLY, ITA NO.148/AHD/2016 FOR A.Y.2008-2009 3 WHATSOEVER HAVE BEEN FURNISHED TO THE ASSESSEE IN THIS REGARD BY THE REVENUE TILL DATE. THE COPY OF SAID ORDER DATED 06/11/2017, HAS BEEN FURNISHED BEFORE US BY THE LD.COUNSEL, HE ALSO RELIED ON THE JUDGEMENT BY THE CO-ORDINATE BENCH WHERE THE IDENTICAL QUESTION HAS BEEN DECIDED COPY WHEREOF HAS ALSO BEEN SUBMITTED BY THE LD.COUNSEL APPEARING FOR THE ASSESSEE. 4. ON THE OTHER HAND LD.DR SUBMITTED THAT THE SUCH SANCTION IS NOT REQUIRED AS HAS BEEN INSTRUCTED BY THE DEPARTMENT BY AND UNDER LETTER DATED 12/11/2018, ISSUED BY THE REVENUE AUTHORITIES. 5. WE HAVE HEARD THE RESPECTIVE PARTIES. PERUSED THE RELEVANT RECORD. IN ORDER TO DECIDE THE ISSUE RAISED ON THE MAINTAINABILITY OF NOTICE U/S.148 OF THE ACT, SINCE THE SAME ADMITTEDLY ISSUED FOR RE-OPENING OF THE CASE OF THE ASSESSEE AFTER EXPIRY OF FOUR YEARS FROM THE END RELEVANT ASSESSMENT YEARS WE NEED TO DEAL WITH THE SECTION 151 OF THE ACT WHICH IS AS FOLLOWS: ..NO NOTICE SHALL BE ISSUE UNDER SECTION 148 BY AN ASSESSING OFFICER, AFTER THE EXPIRY OF A PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL OR COMMISSIONER IS SATISFIED, ON THE REASONS RECORDED BY THE OFFICER, THAT IT IS A FIT CASE FOR THE ISSUE OF SUCH NOTICE. IN A CASE OTHER THAN A CASE FALLING UNDER SUB-SECTION (1), NO NOTICE SHALL BE ISSUED UNDER THE SECTION 148 BY AN ASSESSING OFFICER, WHO IS BELOW THE RANK OF JOINT 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. FOR THE PURPOSES OF SUB-SECTION (1) AND SUB-SECTION (2), THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR THE PRINCIPAL COMMISSIONER OR COMMISSIONER OR THE JOINT COMMISSIONER, AS THE CASE MAY BE, BEING SATISFIED ON THE REASONS RECORDED BY THE ASSESSING OFFICER ABOUT FITNESS OF A CASE FOR THE ISSUE OF NOTICE SECTION 148, NEED NOT ISSUE SUCH NOTICE HIMSELF... ITA NO.148/AHD/2016 FOR A.Y.2008-2009 4 IT APPEARS FROM RECORD THAT NO SUCH SANCTION HAS BEEN ACCORDED BY THE AUTHORITY. ON THE REASON RECOVERING SATISFACTION BY THE LD.AO FOR SUCH RE-OPENING OF ASSESSMENT U/S.148 OF THE ACT. NEITHER ANY COPY OF THE INSTRUCTION AS SUBMITTED BY THE LD.DR HAS PROVIDED TO US IN THE COURSE OF HEARING OF THE MATTER. WE HAVE FURTHER PERUSED THE JUDGMENT PASSED BY THE CO-ORDINATE BENCH IN ITA NO.274/AHD/2014/SRT FOR A.Y 2003-04, DECIDING THIS PARTICULAR ISSUE OF OBTAINING SANCTION FROM THE COMPETENT AUTHORITY BEFORE ISSUING NOTICE U/S.148 OF THE ACT FOR RE-OPENING OF ASSESSMENT. THE LD.CO-ORDINATE BENCH, IN THAT PARTICULAR MATTER REJECTED THE INITIATION OF PROCEEDINGS U/S.148 OF THE ACT, AS BAD IN LAW, IN THE ABSENCE OF SANCTION AND/OR PRIOR APPROVAL OF THE COMPETENT AUTHORITY FOR SUCH RE-OPENING, THE RELEVANT PORTION WHEREOF IS AS FOLLOWS: 9. THUS, SUB-SECTION (2) OF 151. OF THE ACT DEALS WITH THOSE TYPE OF CASES WHERE ASSESSMENT WAS NOT COMPLETED UNDER 143(3) OF THE ACT OR 147 OF THE ACT. IN SUCH TYPE OF CASES, NO NOTICE SHALL BE ISSUED UNDER SECTION 148 OF THE ACT BY THE ASSESSING OFFICER, WHO IS BELOW THE RANK OF JOINT COMMISSIONER OF INCOME-TAX AFTER EXPIRY OF FOUR YEARS UNLESS JOINT COMMISSIONER OF INCOME-TAX IS' SATISFIED ON THE REASONS RECORDED BY THE ASSESSING OFFICER THAT IT IS A FIT CASE FOR ISSUANCE OF SUCH NOTICE. IN THE INSTANT CASE, UNDISPUTEDLY NO ASSESSMENT WAS FRAMED UNDER SECTION 143 (3) OF THE ACT OR 147 OF THE ACT. IT IS ALSO UNDISPUTED FACT THAT FACT THAT ASSESSMENT IS SOUGHT TO BE REOPENED AFTER FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR I.E. 2003-04, AS NOTICE UNDER SECTION 148 WAS ISSUED ON 30.03.2010. IT IS ALSO NOTICED THAT FROM THE REPLY DATED 21,08,2017 BY THE AO (PAPER BOOK PAGE NO. 17) AS FURNISHED TO THE ASSESSEE IN RESPONSE TO SPECIFIC QUERY RAISED AS TO WHETHER ANY APPROVAL /SANCTION BEFORE ISSUE OF NOTICE UNDER SECTION 148 WAS OBTAINED IS NOT DISCERNIBLE NOR SUPPLIED MEANING THEREBY THAT NO PRIOR APPROVAL OF COMPETENT AUTHORITY WAS OBTAINED BEFORE ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT. THEREFORE, IN SUCH CIRCUMSTANCES, INITIATION OF PROCEEDINGS UNDER SECTION 148 IS BAD-IN-LAW AND NOT LEGALLY TENABLE; AND THE ASSESSMENT FRAMED IN CONSEQUENCE THERETO DESERVE TO BE QUASHED, THEREFORE, THE SAME IS QUASHED. THIS VIEW IS ALSO SUPPORTED BY DECISION OF COORDINATED BENCH IN THE CASE OF SHRI SHABBIR RAFIQBHAI DEPARIYA (SUPRA). FURTHER RELIANCE IS PLACED IN THE CASE OF M/S. G T L V. ACIT 37 ITR 376 (MUM) WHEREIN THERE WAS NO MENTION OF AUTHORIZATION OF HIGHER AUTHORITY TO INITIATE REASSESSMENT PROCEEDINGS OF TAKING APPROVAL, THE INITIATION OF PROCEEDING IS VITIATED AND BAD-IN-LAW, REASSESSMENT PROCEEDING WAS TO BE QUASHED. WE FURTHER RELY ON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V. S P L SIDDHARTHA LTD. 345 ITR 223 (DEL) IN SUPPORT OF OUR VIEW. SINCE WE HAVE QUASHED THE REASSESSMENT PROCEEDING, THEREFORE, WE ARE REFRAINED FOR DEALING THE ISSUE ON MERIT. HOWEVER, WE MAY MENTION THAT NO ADDITION CAN BE MADE ON ACCOUNT OF OPENING CAPITA! BALANCE BROUGHT FORWARD FROM EARLIER YEAR IN THE IMPUGNED ASSESSMENT YEAR AS THE SAME IS NOT INCOME OF CURRENT YEAR. IN VIEW OF THESE FACTS, CIRCUMSTANCES AND LEGAL POSITION, THE APPEAL OF THE ASSESSE IS ALLOWED ITA NO.148/AHD/2016 FOR A.Y.2008-2009 5 RESPECTFULLY RELYING ON THE SPECIFIC JUDGMENT, WE ARE OF THE OPINION THAT SINCE THERE IS NO APPROVAL/OR SANCTION ACCORDED BY THE HIGHER AUTHORITY TO THE LD.AO FOR SUCH RE-OPENING OF ASSESSMENT, INITIATION OF RE- ASSESSMENT PROCEEDINGS U/S.148 IS VITIATED. NEEDLESS TO MENTION THAT ADDITION MADE ON SUCH RE-OPENING IS BAD IN LAW,, WE THUS, QUASHED RE- ASSSESSMENT PROCEEDINGS AND ALLOW THE APPEAL PREFERRED BY THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 22/11/2018 AT SURAT. -SD- ( AMARJIT SINGH) ACCOUNTANT MEMBER -SD- (MS MADHUMITA ROY) JUDICIAL MEMBER SURAT; DATED 22/11/2018 MANISH