Shri Omprakash Kanayalal Shah, Ahmedabad V. ITO, Ward-6(1)(5), Ahmedabad

ITA 1813/AHD/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3897 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 21-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R R MAKWANA
• Assessee Lawyers: SHRIO P F JAIN
• Keywords: Depreciation; Competent authority; Reason to believe; Reassessment proceedings
• Section: 143(3); 150(1); 148

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD (CONDUCTED THROUGH VIRTUAL COURT) BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT ITA NO.1813/AHD/2018 / ASSTT.YEAR : 2010-11 SHRI OMPRAKASH KANAYALAL SHAH 64/506, GUJARAT HOUSING BOARD OPP: CHAMANPURA POLICE STATION KALAPINAGAR, ASARWA AMEDABAD 380016. PAN : AEAPS 2498 J VS. ITO, WARD - 6(1)(5) AHMEDABAD. ( APPLICANT ) ( RESPONENT ) ASSESSEE BY : SHRIO P.F. JAIN, AR REVENUE BY : SHRI R.R.MAKWANA, SR.DR / DATE OF HEARING : 24/05/2021 / DATE OF PRONOUNCEMENT: 04/06/2021 !'/ O R D E R ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF THE LD.CIT(A)-6, AHMEDABAD PASSED FOR THE ASSTT.YEAR 20 10-11. 2. IN THE FIRST GROUND OF APPEAL, THE ASSESSEE HAS PLEADED AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND FACTS IN UPH OLDING THE ASSESSMENT ORDER PASSED U/S.143(3) R.W.S. 147 INASM UCH AS THAT THE REASSESSMENT PROCEEDINGS INITIATED AGAINST THE ASSESSEE ARE INVALID, VOID AB-INITIO WITHOUT JURISDICTION. 3. BRIEF FACTS OF THE CASE ARE THAT THE AO HAS ISSU ED A NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 1961. ACCORDING TO HIM, THIS NOTICE WAS ISSUED ON 30.3.2017 WHICH WAS SERVED UPO N THE ASSESSEE. IN RESPONSE TO THE NOTICE, THE ASSESSEE HAS FILED R ETURN OF INCOME ON 23.9.2017 DECLARING TOTAL INCOME OF RS.94,010/-. T HE LD.AO THEREAFTER ITA NO.1813/AHD/2018 2 PASSED THE ASSESSMENT ORDER ON 20.12.2017 UNDER SEC TION 143(3) R.W.S. SECTION 147 OF THE INCOME TAX ACT, 1961. HE DETERM INED TAXABLE INCOME OF THE ASSESSEE AT RS.26,37,960/-. THE LD.A O HAS MADE ADDITION OF RS.25,43,950/- ON ACCOUNT OF UNEXPLAINE D CASH DEPOSIT IN THE BANK ACCOUNT. THE APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 4. THE LD.COUNSEL FOR THE ASSESSEE WHILE IMPUGNING ORDER OF THE REVENUE AUTHORITIES CONTENDED THAT NOTICE UNDER SEC TION 148 WAS ISSUED TO THE ASSESSEE AFTER RECORDING REASONS FOR REOPENING THE ASSESSMENT. COPY OF SUCH REASON IS AVAILABLE ON P AGE NO.4 OF THE PAPER BOOK. HE DREW OUR ATTENTION TOWARDS PAGE NO. 1 OF THE PAPER BOOK WHEREIN COPY OF THE NOTICE UNDER SECTION 148 I S BEING PLACED. ACCORDING TO HIM, THIS NOTICE IS DATED 29.3.2017. SINCE THE ASSESSMENT INVOLVED HEREIN IS A.Y.2010-11 AND THE A O WANTS TO ISSUE NOTICE AFTER EXPIRY OF FOUR YEARS, THEREFORE, FOR R EOPENING ASSESSMENT BEYOND FOUR YEARS FROM THE END OF THE ASSESSMENT YE AR, A PRIOR APPROVAL IS REQUIRED UNDER SECTION 151(1)/151(2) OF THE ACT. THE AO SOUGHT THIS APPROVAL, AND THE COPY OF PROFORMA VIDE WHICH THIS APPROVAL HAS BEEN GIVEN PLACED AT PAGE NO.2 AND 3 O F THE PAPER BOOK. THE APPROVAL WAS GRANTED BY THE PR.CIT-6, AHMEDABAD ON 30.03.2017 AND NOTICE UNDER SECTION 148 WAS ISSUED ON 29.3.201 7 I.E. ONE DAY PRIOR TO THE APPROVAL GRANTED BY THE COMPETENT AUTH ORITY. THUS, ACCORDING TO THE LD.COUNSEL FOR THE ASSESSEE, NOTIC E UNDER SECTION 148 IN ITSELF IS BAD IN LAW. HE RELIED UPON ORDER OF T HE DIVISION BENCH OF THE ITAT, SURAT BENCH IN ITA NO.1505/AHD/2017 WHICH WAS AUTHORED BY ME WHILE SITTING IN THE DIVISION BENCH. HE PLAC ED ON RECORD COPY OF THE TRIBUNALS ORDER. ITA NO.1813/AHD/2018 3 7. ON THE OTHER HAND, THE LD.DR CONTENDED THAT NOTI CE MUST HAVE BEEN ISSUED ON 30 TH MARCH 2017. THE PROFORMA IS PRINTED ONE, WHERE THE AO FAILED TO SQUARE OFF THE DATE. OTHERWISE, T HERE IS NO IRREGULARITY. 8. I HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GON E THROUGH THE RECORD CAREFULLY. COPY OF THE NOTICE, AND APPROVAL FROM THE PR.CIT-6, AHMEDABAD READ AS UNDER: OFFICE OF THE INCOME-TAX OFFICER, WARD-6(1)(3), ROOM NO. 104, 1 ST FLOOR, NARAYAN CHAMBERS, NR. NEHRU BRIDGE, AHMEDAB AD-380009 (PH) 079-2657 6721 NOTICE UNDER SECTION 148 OF THE INCOME-TAX ACT, 1961. DATE: 29.03.2017 TO OMPRAKASH KANAYALAL SHAH 1226/5, DAHELAWALI KHADKI, SHAHPUR, AHMEDABAD - 380004 A.Y. 2010-11 PAN: AEAPS2498J WHEREAS I HAVE REASON TO BELIEVE THAT YOUR INCOME C HARGEABLE TO TAX TOR THE ASSESSMENT YEAR 2010-11 HAS ESCAPED ASSESSM ENT WITHIN THE MEANING OF SECTION 147 OF THE INCOME-TAX ACT, 1961. I, THEREFORE, PROPOSE TO ASSESS THE INCOME FOR THE ASSESSMENT YEAR 2010-11 AND I HEREBY REQUIRE YOU TO DELIVER TO ME W ITHIN 30 DAYS FROM THE DATE OF SERVICE OF THIS NOTICE, A RETURN I N THE PRESCRIBED FORM OF YOUR INCOME FOR THE ASSESSMENT YEAR 2010-11 IN R ESPECT OF WHICH YOU ARE ASSESSABLE FOR THE SAID ASSESSMENT YEAR. SD/- (RANJIT SHAH) INCOME-TAX OFFICER, WARD-6(L)(3), AHMEDABAD. ITA NO.1813/AHD/2018 4 FORM FOR RECORDING THE REASONS FOR INITIATING PROCE EDINGS UNDER SECTION 148 AND FOR OBTAINING THE APPROVAL OF THE P R.COMMISSIONER OF INCOME-TAX-6, AHMEDABAD. 1. NAME AND ADDRESS OF THE ASSESSEE OMPRAKASH KANAYALAL SHAH 1226/5, DAHELAWALI KHADKI, SHAHPUR, AHMEDABAD - 380004 2 PERMANENT ACCOUNT NO. AEAPS2498J 3 STATUS INDIVIDUAL 4 DIST/ CIRCLE/ RANGE WARD-6(L)(3), AHMEDABAD. 5 A.Y. IN RESPECT OF WHICH IT IS PROPOSED TO ISSUE NOTICE U/S. 148 2010-11 6 IF ASSESSMENT ALREADY COMPLETED, MENTIONED ORDER .UNDER WHICH ASSESSMENT COMPLETED WITH DATE OF ORDER N.A. 7 THE QUANTUM OF INCOME WHICH HAS ESCAPED ASSESSMENT RS.25,43,950/- 8 WHETHER THE PROVISIONS OF SECTION 147 (A) OR 147(B) ARE APPLICABLE FOR BOTH THE SECTIONS. EXPLANATION 2 (A) TO SEC. 14 7 9 WHETHER THE ASSESSMENT IS PROPOSED TO BE MADE FOR THE FIRST TIME. IF THE REPLY IS IN THE AFFIRMATIVE, PLEASE STATE- (A) WHETHER ANY VOLUNTARY RETURN HAD ALREADY BEEN FILED. (B)IF SO. THE DATE OF FILING THE SAID RETURN. YES NO - 10. IF THE ANSWER TO ITEM 8 IS IN THE NEGATIVE, PLEASE STATE, (A) THE INCOME REGULARLY ASSESSED WHETHER IT IS A CASE OF UNDER ASSESSMENT, ASSESSMENT AT TOO LOW RATE, ASSESSMENT WHICH HAS BEEN MADE THE SUBJECT OF EXCESSIVE RELIEF OR ALLOWING OF EXCESSIVE LOSS OR DEPRECIATION. NA 11 WHETHER THE PROVISIONS OF SECTION 150(1) ARE APPLICABLE. IF THE REPLY IS IN THE AFFIRMATIVE N.A. ITA NO.1813/AHD/2018 5 THE RELEANT FACTS MAY BE STATED AGAINST ITEM NO.11 AND IT MAY ALSO BE BROUGHT OUT THAT THE PROVISION OF SECTION 150(2) WOULD NOT STAND IN THE WAY OF INITIATING PROCEEDINGS U/S.147 12. REASONS FOR THE BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. AS PER ANNEXURE A. DATE : 28.03.2017 SD/- (RANJIT SHAH) INCOME-TAX OFFICER WARD-6(1)(3), AHMEDABAD. 13. WHETHER THE ADDL.CIT IS SATISFIED ON THE REASONS RECORDED BY THE ITO THAT IT IS A FIT CASE FOR THE ISSUE OF NOTICE U/S.148 OF THE I.T.ACT. YES, I AM SATISFIED THAT THIS IS FIT CASE FOR THE ISSUE OF NOTICE U/S.148 OF THE I.T.ACT. DATE: 29.03.2017 SD/- (P.S.CHOUDHARY) ADDL.COMMISSIONER OF INCOME-TAX RANGE-6(1), AHMEDABAD. 14. WHETHER THE PR.CIT IS SATISFIED ON THE REASONS RECORDED BY THE ITO THAT IT IS A FIT CASE FOR THE ISSUE OF NOTICE U/S.148 OF THE I.T.ACT. YES, I AM SATISFIED DATE: 30.03.2017 SD/- (AJAI DAS MEHROTRA) PR.COMMISSISSIONER OF INCOME-TAX-6 AHMEDABAD. 6. A PERUSAL OF THE ABOVE WOULD INDICATE THAT APPRO VAL UNDER SECTION 151(1) HAS BEEN OBTAINED BY THE LD.AO ON 30 .3.2017, BUT HE HAS ISSUED THE NOTICE ON 29.3.2017. ON THAT DATE H E WAS NOT EMPOWERED TO ISSUE SUCH NOTICE. THEREFORE, THE NOT ICE IS WITHOUT JURISDICTION AND ON THIS VERY FOUNDATION, THE REASS ESSMENT ORDER IS NOT SUSTAINABLE. AN IDENTICAL ISSUE WAS CONSIDERED BY THE ITAT, SURAT BENCH IN THE CASE OF ITO VS. SHRI ASHOK JAIN, IN IT A NO.1505/AHD/2017 ORDER DATED 14.11.2018. THE DISCU SSION MADE BY THE TRIBUNAL READS AS UNDER: ITA NO.1813/AHD/2018 6 4. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. SECTION 151 OF THE IN COME TAX ACT, 1961 CONTEMPLATES THAT NO NOTICE UNDER SECTION 148 SHALL BE ISSUED BY THE ASSESSING OFFICER, AFTER THE EXPIRY OF A PER IOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLES S NECESSARY APPROVAL FROM COMMISSIONER OR COMPETENT AUTHORITY I S OBTAINED. NO DOUBT IN THE PRESENT CASE, THE LD.AO HAS APPLIED FO R SUCH APPROVAL WHICH WAS GRANTED ON 29.3.2017, BUT BEFORE GRANT OF APPROVAL, THE LD.AO HAS ALREADY ISSUED NOTICE ON 28.3.2014 WHICH IS WITHOUT ANY JURISDICTION. HE CAN ISSUE NOTICE ONLY AFTER GETTIN G APPROVAL. THUS, THE LD.CIT(A) HAS RIGHTLY QUASHED THE ASSESSMENT BE CAUSE THE VERY FOUNDATION FOR ISSUANCE OF NOTICE UNDER SECTION 148 IS THE APPROVAL FROM THE COMPETENT AUTHORITY, I.E. COMMISSIONER OF INCOME TAX, AND IN THE ABSENCE OF SUCH, SUCH NOTICE IS VOID AB INIT IO. CONSIDERING THE ABOVE, WE DO NOT FIND ANY MERIT IN THIS APPEAL OF T HE REVENUE. IT IS DISMISSED. IN THE LIGHT OF THE ABOVE ORDER OF THE TRIBUNAL, T HE FACTS IN THE PRESENT CASE ON HAND BEING IDENTICAL, FOR THE REASO NS STATED HEREINABOVE, I HOLD THAT THE VERY ACTION OF THE LD. AO IN INITIATING THE ISSUANCE OF NOTICE UNDER SECTION 148 IS UNSUSTAINAB LE AND OUTSIDE THE JURISDICTION, AND THEREFORE, I QUASH THE IMPUGNED O RDER PASSED UNDER SECTION 143(3) R.W.S. 147. SINCE I QUASH THE REASS ESSMENT ORDER, ALL OTHER ISSUES RAISED IN THE GROUNDS OF APPEAL BECOME INFRUCTUOUS AND DO NOT CALL FOR SEPARATE ADJUDICATION. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 4 TH JUNE, 2021 AT AHMEDABAD. S D / - (RAJPAL YADAV) VICE-PRESIDENT AHMEDABAD; DATED 04/06/2021