Sunint Investment & Technologies Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 2582/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65288 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 26-07-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 18-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURJANI MOHANTY
• Assessee Lawyers: AMIT GOEL
• Keywords: Depreciation; Income from undisclosed sources; Competent authority; Assessment record; Reason to believe; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI U.B.S.BEDI, JUDICIAL MEMBER AND SHRI S.V.MEHROTRA, ACCOUNTANT MEMBER I.T.A .NO.2582/DEL/2011 (ASSESSMENT YEAR-2001-02) SUNINT INVESTMENT & TECHNOLOGIES VS ACIT PVT. LTD., CIRCLE 9(1), 331, ANSAL CHAMBER-II, NEW DELHI BIKAJI CAMA PLACE, NEW DELHI PAN-AAFCS2625H ( APPELLANT) (RESPONDEN T) APPELLANT BY: SH. AMIT GOEL, CA RESPONDENT BY: SMT. SURJANI MOHANTY, SR. DR ORDER PER S.V.MEHROTRA, AM THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER DATED 25-02-2011 OF THE LD. CIT(A)-XII, NEW DELHI FOR AY 2001-02. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FI LED ITS RETURN OF INCOME ON 31.10.2001 DECLARING TOTAL INCOME OF RS.12,87,140/- . THE ASSESSING OFFICER HAS OBSERVED THAT THIS RETURN WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 ON 15.05.2002. THEREAFTER, THE CASE WAS REOPENED B Y SERVING NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 ON 28.03.2008. THE ASSESS EE ASKED FOR THE REASONS FOR REOPENING THE CASE AND THE SAME WERE SUPPLIED TO TH E ASSESSEE VIDE LETTER DATED 11.07.2008. THE ASSESSING OFFICER HAS OBSERVED THA T ON 23.12.2008, THE ASSESSEE COMPANY FILED AN OBJECTION THAT THE APPROVAL OF CIT WAS TAKEN IN THE NAME OF I.T.A .NO.2582/DEL/2011 2 M/S SUN IND INVESTMENTS TECHNOLOGIES PVT. LTD. AN D NOT IN THE NAME OF ASSESSEES NAME WHICH IS M/S SUNINT INVESTMENTS & T ECHNOLOGIES PVT. LTD. THE ASSESSING OFFICER POINTED OUT THAT THIS TECHNICAL O BJECTION WAS NOT RAISED EARLIER WHEN THE HEARING TOOK PLACE ON 05.08.2008, 18.08.20 08 AND 12.08.2008. HE FURTHER POINTED OUT THAT THE DETAILS OF THE CASE RE -OPENED PERTAINED TO ASSESSEE AND HENCE ON MERE TYPOGRAPHICAL ERROR, THE ASSESSEE CAN NOT TAKE OBJECTION. HE ALSO REFERRED SECTION 292B AND POINTED OUT THAT NO NOTIC E CAN BE INVALID MERELY BY REASON OF ANY MISTAKE, DEFECT OR OMISSIONS. ON MER ITS, THE ASSESSING OFFICER OBSERVED THAT SH. MUKESH GUPTA, THE MAIN PERSON AND AUTHORIZED SIGNATORY OF M/S RAJKAR ELECTRICALS & ELECTRONICS PVT. LTD. IN WHOSE ACCOUNT NO. CA51276 MAINTAINED WITH CORPORATION BANK, PASCHIM VIHAR, NE W DELHI-110063, THE MONEY WAS DEPOSITED IN TWO AMOUNTS OF RS.5,00,000/- EACH ON 01.03.2008 AND ON THE SAME DATE A DEMAND DRAFT OF RS.10,00,000/- W AS PURCHASED AND GIVEN TO THE ASSESSEE COMPANY. HE, THEREFORE, MADE AN ADDIT ION OF RS.10,00,000/- TO THE ASSESSEES INCOME. 3. BEFORE LD. CIT(A), THE ASSESSEE ASSAILED THE INI TIATION OF PROCEEDINGS U/S 148, INTER ALIA, ON THE GROUND THAT ASSESSMENT WAS INITIATED U/S 147 WITHOUT OBTAINING PRIOR SANCTION AS REQUIRED U/S 151 OF THE ACT. LD. CIT(A) OBSERVED THAT SINCE ASSESSEE DID NOT RAISE ANY OBJECTION ON THIS ISSUE AND SUBMITTED TO THE JURISDICTION OF THE ASSESSING OFFICER, THE SAME CAN NOT BE CHALLENGED LATER ON. ON I.T.A .NO.2582/DEL/2011 3 MERITS, LD. CIT(A) UPHELD THE ASSESSING OFFICERS A CTION. BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 4. LD. COUNSEL SUBMITTED THAT AS PER SECTION 151(2) , SINCE THE ASSESSMENT WAS COMPLETED U/S 143(1), THE ASSESSING OFFICER WAS REQ UIRED TO OBTAIN SANCTION OF THE JOINT COMMISSIONER OF INCOME TAX AND NOT OF CIT . LD. COUNSEL FURTHER SUBMITTED THAT IT IS PURELY A LEGAL ISSUE GOING TO THE ROOT OF THE MATTER AND, THEREFORE, CAN BE RAISED AT ANY STAGE OF PROCEEDING S. LD. COUNSEL RELIED UPON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS SPLS SIDDHARTHA LTD 345 ITR 223 WHEREIN IT WAS HELD THAT U/S 151 OF THE ACT, IT WAS ONLY THE JOINT COMMISSIONER OR ADDITIONAL COMMISSIO NER WHO COULD GRANT THE APPROVAL OF ISSUE OF NOTICE U/S 148. WHERE THE APP ROVAL WAS NOT GRANTED BY THE JOINT COMMISSIONER BUT BY COMMISSIONER OF INCOME TA X, THIS IS NOT IRREGULARITY CURABLE U/S 292B. IT WAS HELD THAT THE NOTICE WAS NOT VALID. 5. LD. DR SUBMITTED THAT IN THE CASE OF SPLS SIDDH ARTHA LTD., THE FACTS WERE DIFFERENT. SHE SUBMITTED THAT IN THE SAID CASE, TH E MATTER WAS ROUTED THROUGH THE ADDITIONAL COMMISSIONER OF INCOME TAX BUT IN THE PR ESENT CASE, IT WAS NOT SO ROUTED. ON 25.07.2012, WHEN THE CASE WAS TAKEN UP FOR HEARING, LD. DR WAS DIRECTED TO CALL FOR ASSESSMENT RECORDS ALONG WITH APPROVAL FOR ISSUING NOTICE U/S 148. LD. DR PRODUCED THE SAID APPROVAL ON THE DATE OF HEARING I.E 26.07.2010 WHICH READS AS UNDER :- I.T.A .NO.2582/DEL/2011 4 NO. ITO/WARD 9(3)/ASSTT./2007-08/27 O FFICE OF THE INCOME TAX OFFICER, WARD 9(3), ROOM NO-180, C.R.BUILDING, I.P.ESTATE, NEW DELHI-110002. DATED 28/03/2008 TO, THE COMMISSIONER OF INCOME TAX, DELHI-III, NEW DELHI. (THROUGH PROPER CHANNEL) SIR, SUB:-APPROVAL OF ISSUE OF NOTICE U/S 148 OF THE I.T.ACT, 1961 IN THE CASE OF M/S SUN IND INVESTMENTS & TECHNOLOGIES PVT. LTD. FO R THE A.Y 2001-02 REG. KINDLY REFER TO THE ABOVE. PLEASE FIND ENCLOSED HEREWITH PROPOSAL IN TRIPLICAT E FORM DULY RECORDED THE REASONS ALONGWITH ANNEXURE A FOR INITIATING PROCE EDING U/S 148 FOR THE A.Y 2001-02. SINCE THE ASSESSMENT RECORD IN THESE CASES ARE NOT READILY AVAILABLE. NOW IT IS PRESUMED FOR THE SAFER SIDE THAT THE ASSESSMENT WER E COMPLETED IN THESE CASES U/S 143(3) FOR THE A.Y 2001-02, HENCE YOUR KIND APPROVA L FOR ISSUE OF NOTICE U/S 148 IS SOLICITED U/S 151(1) OF THE I.T.ACT. SUBMITTED FOR YOUR KIND APPROVAL. YOURS FAITHFULLY ENCLS.: PROPOSAL IN ONE CASES IN TRIPLICATE. (A.N.VERMA) INCOME TAX OFFICER WARD 9(3), NEW DELHI. I.T.A .NO.2582/DEL/2011 5 FORM FOR RECORDING THE REASONS FOR INITIATING PROCE EDINGS U/S 148 AND FOR OBTAINING THE APPROVAL OF THE COMMISSIONER OF INCOME TAX, DELHI-I II, DELHI 1. NAME AND ADDRESS OF THE SUN IND INVESTMENT S AND TECHNOLOGIES PVT. LTD ASSESSEE A-1/B, DDA FLAT, MUNIRIKA, NEW DEL HI. 2. PAN ------- 3. STATUS COMPANY 4. CIRCLE/WARD WARD 9(3) 5. ASSESSMENT YEAR IN RESPECT 2001-02 OF WHICH IT IS PROPOSED TO ISSUE NOTICE U/S 148 6. THE QUANTUM OF INCOME RS.10,00,000/- WHICH HAS ESCAPED ASSESSMENT 7. WHETHER THE ASSESSMENT IS NO. 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, DATE OF FILING OF THE SAID RETURN. 8. IF THE ANSWER TO ITEM 7 IS IN THE NEGATIVE. PLEASE STATE (A) THE INCOME ORIGINALLY ASSESSMENT RECORD IN T HIS CASE IS NOT READILY ASSESSED AVAILABLE. NOW IT IS PRESUMED FOR THE SA FER SIDE THAT THE ASSESSMENT WAS COMPLETED U/S 143(3) FOR THE AY 2001-02. (B) WHETHER IT IS A CASE OF NOT COVERED UNDER THE SE REASONS. UNDER ASSESSMENT, ASSESSMENT AT LOW RATE, ASSESSMENT WHICH HAS BEEN MADE SUBJECT DEPRECIATION. 9. REASONS FOR THE BELIEF THAT AS PER ANNEXURE A INCOME HAS ESCAPED ASSESSMENT (INCOME TAX OFFICER) WARD 9(3), NEW DELHI 10. WHETHER THE COMMISSIONER OF INCOME TAX IS SATIS FIED ON THE REASONS RECORDED BY THE ITO WARD 9(3) THAT IT IS A FIT-CASE FOR ISSUE O F NOTICE U/S 148. DATE: COMMISSIONER OF INCOME TAX DELHI-III, NEW DELHI. I.T.A .NO.2582/DEL/2011 6 ISSUE OF NOTICE U/S 148 OF THE I.T.ACT, 1961 IN THE CASE OF M/S SUN IND INVESTMENTS AND TECHNOLOGIES PVT. LTD. (NOW AS PER CONFIRMATION FRO M THE BANK BENEFICIARIES NAME IS M/S SUNINT INVESTMENTS AND TECHNOLOGIES PVT. LTD) F OR THE A.Y 2001-02-REG.. INFORMATION ABOUT ENTRY OPERATORS AND THEIR BENEFIC IARIES OF DELHI HAS BEEN RECEIVED FROM THE DIT (INVESTIGATION)-I, NEW DELHI THROUGH THE ADDL. COMMISSIONER OF INCOME TAX, RANGE-9, NEW DELHI VIDE LETTER NO. ADDL . CIT/RANGE-9/2005-06/2134 DATED 13.03.2006 ALONGWITH LISTS SUCH ENTRY OPERATO RS AND BENEFICIARIES. AFTER MAKING INQUIRIES THE DIRECTORATE OF INVESTIGATION IN THEIR REPORT HAS ESTABLISHED LARGE AMOUNT OF TAX EVASION IN THE TRANSACTIONS BETWEEN ENTRY OPERA TORS AND THE BENEFICIARIES. IT IS REVEALED FROM THE CD INFORMATION THAT THE ASSESSEE COMPANY M/S SUN IND INVESTMENTS & TECHNOLOGIES PVT. LTD., (TERMED AS BENEFICIARY) D URING THE PREVIOUS YEAR 2000-01 RELEVANT TO ASSESSMENT YEAR 2001-02 HAD TAKEN ACCOM MODATION ENTRIES FROM M/S RAJKAR ELECTRICALS AND ELECTRONIC PVT. LTD. (TERMED AS ENTRY OPERATOR). THE DETAIL OF WHICH IS MENTIONED BELOW: BENEFICIARYS NAME BENEFICIARY BANK NAME BENEFICIARY BANK BRANCH VALUE OF ENTRY TAKEN INSTRUMENT NO. BY WHICH ENTRY TAKEN SUN IND INVESTMENTS & TECHNOLOGIES PVT. LTD. CANARA BANK MUNIRIKA 10,00,000 895047 DATE ON WHICH ENTRY TAKEN NAME OF A/CIT(A) HOLDER OF ENTRY GIVING A/CIT(A) BANK FROM WHICH ENTRY GIVEN BRANCH OF ENTRY GIVING BANK A/CIT(A) NO. ENTRY GIVING A/C 1/3/2001 RAJKAR ELECTRICALS & ELECTRONICS PVT. LTD. CORPN. BANK PASCHIM VIHAR 51276 QUANTUM OF AMOUNT OF SUCH ENTRIES RECEIVED BY THE ASSESSEE COMPANY M/S SUN IND INVESTMENTS & TECHNOLOGIES PVT. LTD. FROM M/S R AJKAR ELECTRICALS & ELECTRONICS PVT. LTD. AS PER DETAILS MENTIONED ABOVE RECEIVED F ROM THE DIRECTORATE OF INVESTIGATION, NEW DELHI IS RS.10,00,000/-. THIS ACCOMMODATION EN TRY TAKEN BY M/S SUN IND INVESTMENTS & TECHNOLOGIES PVT. LTD. IS ALSO CONFIR MED ON THE BASIS OF THE STATEMENT OF SHRI RAJAN JASSAL, S/O SHRI SURINDER KUMAR JASSAL, R/O-WZ-134, PLOT NO-170, VISHNU GARDEN, NEW DELHI RECORDED ON 4/2/2004, STATEMENT O F SHRI SURINDER PAL SINGH, S/O- LATE SHRI MALIK SINGH, R/O-A-4/181, SECTOR-17, ROHI NI, NEW DELHI-85, RECORDED ON 24/12/2003, 30/12/2003 & 5/1/2005 AND STATEMENT OF SHRI MUKESH GUPTA, S/O-SHRI R.D.GUPTA, R/O-WZ-414, NARAINA VILLAGE, NEW DELHI R ECORDED ON 16/1/2004, REVEALED THAT THESE PERSONS AFTER RECEIVING CASH FROM CLIENT S AND DEPOSITED IN VARIOUS COMPANIES BANK ACCOUNTS AND CHEQUES ARE ISSUED TO THE ASSES SEE COMPANY WHO GAVE THE CASH. I.T.A .NO.2582/DEL/2011 7 IN VIEW OF FACTS STATED HEREIN ABOVE IT IS CLEAR T HAT THE ASSESSEE COMPANY MANAGED THE ABOVE SAID TRANSACTIONS OF ACCOMMODATIO N ENTRIES OUT OF ITS INCOME FROM UNDISCLOSED SOURCES. ASSESSMENT RECORD IN THIS IS NOT READILY AVAILABLE. IN VIEW OF ABOVE, I HAVE REASON TO BELIEVE THAT IN COME OF RS.10,00,000/- ESCAPED ASSESSMENT WITHIN MEANINGS OF THE PROVISIONS OF SEC TION 14 OF THE INCOME TAX ACT, 1961, THEREFORE, A NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 IS REQUIRED TO BE ISSUED AND SERVED ON THE ASSESSEE COMPANY TO ASSESS THE IN COME ESCAPED AS STATED HEREINABOVE. (A.N.VERMA) INCOME TAX OFFICER WARD 9(3), NEW DELHI 6. WITH REFERENCE TO AFOREMENTIONED DOCUMENTS, SHE SUBMITTED THAT ASSESSING OFFICER TOOK THE APPROVAL OF LD. CIT IN ORDER TO BE MORE CAUTIOUS. 7. LD. COUNSEL SUBMITTED THAT SINCE IT IS ADMITTED THAT ASSESSMENT RECORDS WERE NOT AVAILABLE WITH ASSESSING OFFICER, IT IS NO T CLEAR AS TO HOW ASSESSING OFFICER ACQUIRED THE REQUISITE BELIEF REGARDING ESC APEMENT OF INCOME. HE FURTHER SUBMITTED THAT IN THE CASE OF SPLS SIDDHARTHA LTD. (SUPRA), THE OBJECTION WAS NOT RAISED BEFORE THE ASSESSING OFFICER. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE RECORDS OF THE CASE. ADMITTEDLY, THE RETURN WA S PROCESSED U/S 143(1), AS PER THE ASSESSMENT ORDER, ON 15.05.2002 AND THE NOTICE U/S 148 WAS ISSUED ON 28.03.2008. THEREFORE, AS PER SECTION 151, THE ASS ESSING OFFICER WAS REQUIRED TO OBTAIN THE SANCTION OF JOINT COMMISSIONER OF INCOME TAX AS FOUR YEARS HAD LAPSED FROM THE END OF RELEVANT ASSESSMENT YEAR. THE DEPA RTMENTS CONTENTION IS THAT ASSESSEE DID NOT RAISE ANY OBJECTION BEFORE THE ASS ESSING OFFICER ON THIS ISSUE AND I.T.A .NO.2582/DEL/2011 8 THE ONLY OBJECTION RAISED WAS IN REGARD TO THE NAME OF ASSESSEE WHICH WAS DULY DEALT BY THE ASSESSING OFFICER. THE CONTENTION I S THAT ONCE THE ASSESSEE HAD SUBMITTED TO THE JURISDICTION OF ASSESSING OFFICER THEN SUBSEQUENTLY THE OBJECTION WITH REFERENCE TO JURISDICTION CANNOT BE RAISED. I N THIS REGARD, RELIANCE HAS BEEN PLACED ON SECTION 124. WE DO NOT FIND ANY SUBSTANC E IN THE SUBMISSION OF LD. DR BECAUSE SECTION 124 PRIMARILY DEALS WITH THE TER RITORIAL JURISDICTION OF ASSESSING OFFICER. SECTION 151 DEALS WITH SANCTION FOR ISSUE OF NOTICE U/S 148 AND IT NOWHERE REFERS TO SECTION 124. THE SANCTION BY COMPETENT AUTHORITY, AS MENTIONED IN SECTION 151 ONLY, CAN ASSIGN PROPER JU RISDICTION TO THE ASSESSING OFFICER AND IF SUCH SANCTION WAS NOT OBTAINED, THE ASSESSING OFFICER LACKED THE JURISDICTION TO COMPLETE THE REASSESSMENT PROCEEDIN GS. WHEN THE LEGISLATURE HAS SPECIFICALLY ASSIGNED JURISDICTION TO A PARTICULAR AUTHORITY UNDER THE ACT TO GRANT SANCTION THEN, IF ALL OTHER CONDITIONS ARE FULFILLE D, THE SANCTION HAS TO BE GRANTED BY THAT VERY AUTHORITY. THIS FUNCTION CANNOT BE DE LEGATED TO ANY OTHER AUTHORITY. IT IS THE LEGAL DUTY COST UPON THAT AUTHORITY TO PE RFORM THE SAID FUNCTION. IF THAT AUTHORITY FAILS IN PERFORMING HIS LEGAL FUNCTIONS A ND THE SAME IS PERFORMED BY THE OTHER AUTHORITY THEN IT GOES TO THE VERY ROOT OF PR OPER ASSUMPTION OF JURISDICTION BY THE AUTHORITY WHICH WAS REQUIRED TO TAKE THAT SA NCTION. THIS IS PURELY LEGAL ISSUE AND CAN BE RAISED AT ANY STAGE OF PROCEEDING. 9. HONBLE DELHI HIGH COURT IN THE CASE OF SPLS SI DDHARTHA LTD. (SUPRA) HAS QUASHED THE REASSESSMENT PROCEEDINGS FOR WANT OF SA NCTION OF JOINT I.T.A .NO.2582/DEL/2011 9 COMMISSIONER OF INCOME TAX WHEN IT WAS SO REQUIRED AS PER SECTION 151(2), OBSERVING AS UNDER :- AS PER THE AFORESAID PROVISION, IT IS ONLY THE JOI NT COMMISSIONER OR THE ADDITIONAL COMMISSIONER, WHICH CAN GRANT THE APPROVAL. THE ARGUMENT OF THE ASSESSEE BEFORE THE TRIBUNAL WAS THAT THE APPROVAL WAS NOT GRANTED BY THE JOINT COMMISSIO NER. INSTEAD, IT WAS TAKEN FROM THE COMMISSIONER OF INCOME-TAX, DELH I-III, NEW DELHI, WHO WAS NOT COMPETENT TO APPROVE EVEN WHEN H E WAS A HIGHER AUTHORITY INASMUCH AS SECTION 151 OF THE ACT SPECIF ICALLY MENTIONS JOINT COMMISSIONER AS THE COMPETENT AUTHORITY. THI S CONTENTION OF THE RESPONDENT-ASSESSEE HAS BEEN ACCEPTED BY THE TR IBUNAL THEREBY QUASHING THE ASSESSMENT PROCEEDINGS. THE CONTENTIO N OF THE REVENUE THAT IT WAS MERELY AN IRREGULARITY COMMITTED BY THE ASSESSING OFFICER AND WAS RECTIFIABLE UNDER SECTION 292B OF THE ACT, HAS NOT BEEN FOUND CONVINCING BY THE TRIBUNAL. THUS, IF AUTHORITY IS GIVEN EXPRESSLY BY AFFIRMATIV E WORDS UPON A DEFINED CONDITION, THE EXPRESSION OF THAT CONDITI ON EXCLUDES THE DOING OF THE ACT AUTHORIZED UNDER OTHER CIRCUMSTANC ES THAN THOSE AS DEFINED. IT IS ALSO ESTABLISHED PRINCIPLE OF LAW T HAT IF A PARTICULAR AUTHORITY HAS BEEN DESIGNATED TO RECORD HIS/HER SAT ISFACTION ON ANY PARTICULAR ISSUE, THEN IT IS THAT AUTHORITY ALONE W HO SHOULD APPLY HIS/HER INDEPENDENT MIND TO RECORD HIS/HER SATISFAC TION AND FURTHER MANDATORY CONDITION IS THAT THE SATISFACTION RECORD ED SHOULD BE INDEPENDENT AND NOT BORROWED OR DICTATED SATI SFACTION. LAW IN THIS REGARD IS NOW SELL-SETTLED. IN SHEO NARAIN JAISWAL V ITO [1989] 176 ITR 352 (PATNA), IT WAS HELD: WHERE THE ASSESSING OFFICER DOES NOT HIMSELF EXERC ISE HIS JURISDICTION UNDER SECTION 147 BUT MERELY ACTS AT T HE BEHEST OF ANY SUPERIOR AUTHORITY, IT MUST BE HELD THAT ASSUMPTION OF JURISDICTION WAS BAD FOR NON-SATISFACTION OF THE CONDITIONS PRECEDEN T. THE APEX COURT IN THE CASE OF ANIRUDHSINHJI KARANSI NHJI JADEJA V. STATE OF GUJARAT [1995] 5 SSC 302 HAS HELD THAT IF A STATUTORY AUTHORITY HAS BEEN VESTED WITH JURISDICTION, HE HAS TO EXERCISE IT ACCORDING TO ITS OWN DISCRETION. IF DISCRETION IS EXERCISED UNDER THE DIRECTION OR IN COMPLIANCE WITH SOME HIGHER AUTHORI TIES INSTRUCTION, THEN IT WILL BE A CASE OF FAILURE TO EXERCISE DISCR ETION ALTOGETHER. I.T.A .NO.2582/DEL/2011 10 WE ARE, THEREFORE, OF THE OPINION THAT THE TRIBUNAL HAS RIGHTLY DECIDED THE LEGAL ASPECT, KEEPING IN VIEW WELL-ESTA BLISHED PRINCIPLES OF LAW LAID DOWN IN A CATENA OF JUDGMENTS INCLUDING THAT OF THE SUPREME COURT. 8. RESPECTFULLY, FOLLOWING THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT, THE REASSESSMENT PROCEEDINGS ARE QUASHED. AS WE HA VE QUASHED THE REASSESSMENT PROCEEDINGS, THE ADJUDICATION OF MERITS OF THE CASE WILL BE ACADEMIC ONLY. 9. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/08/2012. SD/- SD/- (U.B.S.BEDI) (S.V.MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30/08/2012 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI I.T.A .NO.2582/DEL/2011 11