ASHOK GANPAT THAKUR AS SON & LEGAL HEIR OF LATE BAMIBAI GANPAT THAKUR, THANE V. ACIT CIR 1, THANE

ITA 296/MUM/2016

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6137 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 18-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Assessee Lawyers: SUBODH RATNAPARKHI
• Keywords: Reopening of assessment; Document seized; Competent authority; Reason to believe; Documents seized; TDS
• Section: 143(3); 148

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL A B ENCH MUMBAI BEFORE SHRI G.S. PANNU, VICE-PRESIDENT AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 296/MUM/2016 (ASSESSMENT YEAR 2006-07 ) ASHOK GANPAT THAKUR AS SON & LEGAL HEIR OF LATE BAMIBAI GANPAT THAKUR, NEW SHIVAJI NAGAR, THAKUR PADA, KALWA (EAST), THANE-400605. PAN: AERPT0798K VS. ACIT, CIRCLE-1, 6 TH FLOOR, ASHAR I.T. PARK, ROAD NO.16Z, WAGALE INDUSTRIAL ESTATE, THANE (W)-400604. APPELLANT RESPONDE NT APPELLANT BY : SHRI SUBODH RATNAPARKHI (AR) RESPONDENT BY : SHRI RAJESH KUMAR YADAV (DR) DATE OF HEARING : 16.11.2018 DATE OF PRONOUNCEMEN T : 11.01.2019 ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY ASSESSEE ARISES OUT OF THE OF LD. CI T(A)-1, THANE DATED 15.10.2015, WHICH IN TURN ARISES FROM THE ASSESSMEN T ORDER PASSED UNDER SECTION 143(3) R.W.S 147 OF THE I.T. ACT DATED 21.0 3.2013 FOR ASSESSMENT YEAR 2006-07. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN LAW, THE NOTICE U/S 148 DT.2 3.09.2011 ISSUED BY THE LD. AO IS BAD-IN-LAW AND THE ASSESSMENT FRAMED IN PURSUANC E THEREOF IS REQUIRED TO BE QUASHED ON THAT ACCOUNT AS (I) THE LD. AO FAILED TO COMPLY WITH THE CONDITION PRESCRIBED BY SEE 151 (2) OF THE I.T ACT, 1961 AND ITA NO. 296 MUM 2016-ASHOK GANPAT THAKUR. 2 (II) THE NOTICE U/S 148 IS ISSUED WITHOUT ANY VALID REASON ON THE PART OF THE LD. AO TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. 2. ON THE FACTS AND IN LAW, THE HON. CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS. 75,00,000/- AS UNACCOUNTED CASH CONSIDERATION A LLEGEDLY RECEIVED BY THE APPELLANT ON SALE OF LAND AT VILLAGE PARSIK, TAL. & DIST. THANE FROM M/S. SHREE TIRUPATI GREENFIELD DEVELOPERS, NOT APPRECIATING TH AT THE APPELLANT HAD NOT RECEIVED ANY AMOUNT OVER AND ABOVE THE ACTUAL SALE CONSIDERATION RECORDED IN THE AGREEMENT FOR TRANSFER OF DEVELOPMENT RIGHTS DT . 28.02.2006. 3. ON THE FACTS AND IN LAW, THE HON. CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS. 75,00,000/- AS UNACCOUNTED CASH CONSIDERATION A LLEGEDLY RECEIVED BY THE APPELLANT ON SALE OF LAND AT VILLAGE PARSIK, TAL. & DIST. THANE WITHOUT GRANTING THE APPELLANT THE OPPORTUNITY TO CROSS EXAMINE THE PERSON GIVING ADVERSE INFORMATION INSPITE OF SPECIFIC REQUEST FOR THE SAM E. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2006-07 ON 20.07.2006 DECLARING TOT AL INCOME AT RS. 47,77,120/-. SUBSEQUENTLY, THE ASSESSMENT WAS RE-OP ENED UNDER SECTION 147 OF THE ACT. THE ASSESSMENT WAS RE-OPENED ON THE BAS IS OF INFORMATION RECEIVED FROM THE INVESTIGATION WING, KALYAN, THAT DURING THE SEARCH ACTION ON RESIDENTIAL PREMISES OF ONE SHRI SUNIL GUPTA, CE RTAIN DOCUMENTS WERE FOUND AND SEIZED. THESE DOCUMENTS CONSIST OF A POCK ET DIARY NUMBERED AS BUNDER NO. 9. ON PAGE NUMBER 4 OF THIS DIARY THERE WAS REFERENCE OF TDR (KALWA) OF 40000 SQ.FT. X 375 = 75,00,000 . THE ENTRY IS HAND WRITTEN PERTAINS TO DEVELOPMENT RIGHT BY TIRUPATI GREENFIEL D DEVELOPERS, ONE OF THE FIRM OF SHRI TIRUPATI GROUP, FROM SMT. BOMBAI GANPA T THAKUR (DECEASED ITA NO. 296 MUM 2016-ASHOK GANPAT THAKUR. 3 ASSESSEE). AS PER THE BOOKS OF SHRI TIRUPATI GREENF IELD DEVELOPER, THIS TDR WAS PURCHASED IN FEBRUARY 2006 IN RESPECT OF PLOT N O. 116, PARSIK, KALWA, FROM THE OWNER SMT. BOMBAI GANPAT THAKUR (ASSESSEE) . THE ALLEGED CONSIDERATION WAS RS. 75,00,000/- FROM TOTAL TDR AD MEASURING 40,000 SQ.FT. THE DOCUMENTARY EVIDENCES SHOWS THAT THE VALUE OF T DR WAS RS. 1.50 CRORES, I.E. 40,000 SQ.FT. X 375 SQ.FT. = 1.50 CRO RE. THE SAID SEIZED DOCUMENTS CONTAINED CASH RECEIPT AND PAYMENTS. ON T HE BASIS OF SAID INFORMATION, THE ASSESSMENT WAS RE-OPENED. NOTICE U NDER SECTION 148 DATED 23.09.2011 WAS ISSUED TO THE ASSESSEE. THE ASSESSEE CONTESTED THE REOPENING OF THE ASSESSMENT. 3. DURING THE RE-ASSESSMENT PROCEEDING, THE ASSESSEE WAS CONFRONTED AS TO WHY THE AMOUNT OF RS. 75 LAKHS SHOULD NOT BE TREATED AS INCOME AS PER THE OFFICE REPORT INVESTIGATION WING DATED 13.03.2013. THE ASS ESSEE FILED HER REPLY DATED 18.03.2013. IN THE REPLY, THE ASSESSEE HAS DE NIED HAVING RECEIPT OF ANY AMOUNT. THE ASSESSEE CONTENDED THAT AS PER CLAUSE-4 OF THE AGREEMENT DATED 28.02.2006, SHE HAD SOLD THE PROPERTY AND NOT THE TDR. THE ASSESSEE CONTENDED THAT SHE HAD SOLD PLOT AREA OF 3920 SQ.MT R. AND NOT TDR OF 40,000 SQ.FT.. THE ASSESSEE ALSO CONTENDED THAT IN THE ENT IRE AGREEMENT, THERE IS NO REFERENCE OF TDR. THE ASSESSEE SOLD PLOT AT A PRICE OF RS. 80,00,000/- LAKHS. THUS, THERE IS NO LINK WITH ALLEGED PRICE OF RS. 75 ,00,000/- OR LINK WITH THE ITA NO. 296 MUM 2016-ASHOK GANPAT THAKUR. 4 SAID TDR. THE EXPLANATION OF ASSESSEE WAS NOT ACCEP TED BY ASSESSING OFFICER. THE ASSESSING OFFICER CONCLUDED THAT THE A SSESSEE HAS ACCEPTED THE FACT IN PARAGRAPH-7 OF HER REPLY THAT SHE HAS THE S AID TDR HAS BEEN TRANSFERRED TO SHREE TIRUPATI GREENFIELD DEVELOPERS . THE ASSESSING OFFICER ON THE BASIS OF REPORT OF ITO (INV), KALYAN MADE AD DITION OF RS. 75,00,000/- WHILE PASSING THE ASSESSMENT ORDER UNDER SECTION 14 3(3) R.W.S 147 OF THE ACT ON 21.03.2013. AGGRIEVED BY THE ACTION OF ASSESSING OFFICER IN MAKING THE ADDITION AS WELL AS OF RE-OPENING, FILED APPEAL BEF ORE THE LD. CIT(A). THE LD. CIT(A) UPHELD THE RE-OPENING AS WELL AS ADDITION OF RS. 75,00,000/-. THUS, FURTHER AGGRIEVED BY THE ORDER OF LD. CIT(A), THE A SSESSEE HAS FILED THE PRESENT APPEAL BEFORE THIS TRIBUNAL. 4. WE HAVE HEARD THE SUBMISSION OF LD. AR OF THE ASSES SEE AND LD. DR FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. THE LD. AR OF THE ASSESSEE SUBMITS THAT THE ASSESSEE HAS CHALLENGED T HE VALIDITY OF RE-OPENING AS WELL AS NOTICE UNDER SECTION 148 ISSUED BY ASSES SING OFFICER, WHICH IS BAD-IN-LAW AS ASSESSING OFFICER FAILED TO COMPLY WI TH THE CONDITION PRESCRIBED UNDER SECTION 151(2) OF THE ACT. FURTHER , THE NOTICE WAS ISSUED WITHOUT ANY VALID REASON TO MAKE A BELIEF THAT ANY INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. THE LD. AR OF THE ASSESSEE SUBMITS THAT GROUND NO.1 OF THE APPEAL IS PURELY LEGAL IN NATURE AND GOES TO THE ROOT OF THE CASE AND IN ITA NO. 296 MUM 2016-ASHOK GANPAT THAKUR. 5 CASE HIS CONTENTION IS ACCEPTED THAT THE REOPENING IS WITHOUT PROPER APPROVAL AND THE NOTICE UNDER SECTION 148 DATED 23.09.2011 I S HELD BAD-IN-LAW, THE ENTIRE ACTION OF THE ASSESSING OFFICER WOULD BE VOID AB INITIO . AND THE ASSESSMENT ORDER PASSED IN PURSUANCE THEREOF IS LIA BLE TO BE QUASHED. THE LD. AR OF THE ASSESSEE SUBMITS THAT THE ASSESSING OFFIC ER ON THE BASIS OF CERTAIN INFORMATION RECEIVED FROM ITO (INV.), KALYAN ISSUED NOTICE UNDER SECTION 148 ON 23.09.2011 BY ASSUMING THAT THE INCOME OF TH E ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAS ESCAPED ASSESSMENT. THE ASS ESSING OFFICER WHILE ISSUING NOTICE UNDER SECTION 148 FAILED TO BRING TH AT INFORMATION RECEIVED BY HIM PERTAINS TO THE ASSESSEE AND THEREFORE, RE-OPEN ING OF THE ASSESSMENT WAS NOT JUSTIFIED. THE LD. AR OF THE ASSESSEE FURTHER S UBMITS THAT THE ASSESSMENT WAS RE-OPENED AFTER FOUR YEARS FROM THE END OF RELE VANT ASSESSMENT YEAR AND NO NECESSARY APPROVAL AS MANDATED IN TERMS OF S ECTION 151(2) WAS OBTAINED BY ASSESSING OFFICER. IN THE REASONS RECOR DED, THE ASSESSING OFFICER HAS MENTIONED THAT APPROVAL WAS OBTAINED UNDER SECT ION 151(1) OF THE ACT. THE LD. AR OF THE ASSESSEE SUBMITS THAT NO PROPER A PPROVAL AS MANDATED UNDER SECTION 151(2) WAS OBTAINED BY ASSESSING OFFI CER, THEREFORE, THE NOTICE UNDER SECTION 148 IS BAD-IN-LAW AND THE ASSE SSMENT ORDER IS LIABLE TO BE QUASHED. IN SUPPORT OF HIS SUBMISSION, THE LD. A R OF THE ASSESSEE RELIED UPON THE DECISION OF HONBLE BOMBAY HIGH COURT IN G HANSHYAN K. ITA NO. 296 MUM 2016-ASHOK GANPAT THAKUR. 6 KHABRANI VS. ACIT [346 ITR 443 (BOM)]. THE LD. AR S UBMITS THAT THE ASSESSEE HAS GOOD CASE ON VALIDITY OF REASONS RECOR DED BY THE ASSESSING OFFICER MERIT AS WELL AS MERITS OF THE CASE. THE L D AR FOR THE ASSESSEE FURNISHED WRITTEN SUBMISSIONS ON THE MERIT OF THE C ASE. 5. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPO RTED THE ORDER OF ASSESSING OFFICER. THE LD. DR SUBMITS THAT THE ASSE SSEE WAS REOPENED AFTER FOLLOWING THE DUE PROCESS OF LAW. THE ASSESSEE HAS NOT RAISED SUCH OBJECTION DURING THE RE-ASSESSMENT STAGE. THE ASSESSEE IS NOW PRECLUDED FOR RAISING SUCH OBJECTION. 6. ON THE RIVAL CONTENTION OF LD. REPRESENTATIVE OF TH E PARTIES, THIS BENCH VIDE ORDER-SHEET DATED 01.05.2018 DIRECTED THE LD. DR FO R THE REVENUE TO OBTAIN FACTUAL REPORT REGARDING OBTAINING NECESSARY APPROV AL OF JOINT COMMISSIONER. ON THE DIRECTIONS OF THIS COURT, THE LD. DR FOR THE REVENUE FURNISHED THE REPORT OF ASSESSING OFFICER DATED 12. 06.2018. THE LD DR ALSO FURNISHED THE COPY OF APPLICATION DATED 10.08.2011, MOVED BY ASSESSING OFFICER TO JOINT CIT, RANGE-1, THANE, ALONG WITH TH E REPORT OF ASSESSING OFFICER, THE COPY OF REASONS RECORDED DATED 27.07.2 011. IN THE REPORT, THE ASSESSING OFFICER HAS MENTIONED THE FOLLOWING MATER IAL FACTS: 01) AS REGARDS, THE GROUNDS OF APPEAL NO.1, IT IS SUBMI TTED THAT THE AO HAS RECORDED THE REASONS FOR RE-OPENING OF THE CASE. TH E COPY OF THE SAME IS ITA NO. 296 MUM 2016-ASHOK GANPAT THAKUR. 7 SUBMITTED HEREWITH. THE ISSUE OF VALIDITY OF NOTICE U/S 148 HAS BEEN DEALT IN THE ORDER OF THE HONBLE CIT(A) & THIS OFFICE IS RE LIED UPON THE SAME. AS REGARDS, THE CONDITION PRESCRIBED BY SEC. 151(2) OF THE I.T. ACT, IT IS SUBMITTED THAT THE APPEAL IN THIS CASE, FOR ISSUE O F NOTICE U/S 148 WAS ACCORDED BY THE CIT-1, THANE VIDE LETTER DATED 10/0 8/2011. THE COPY OF THE SAME IS SUBMITTED HEREWITH. ON VERIFICATION OF THE SAID APPROVAL LETTER, IT IS SEEN THAT THE SAID APPROVAL IS GRANTED WITH REFEREN CE TO JT. CITRANGE-1, THANES LETTER DATED 02/08/2011 AND THE LETTER IS A DDRESSED TO JT. CIT RANGE- 1, THANE. THESE FACTS SHOW THAT THE CIT-1, THANE HA S GIVEN APPROVAL FOR ISSUE OF NOTICE U/S 148 ONLY AFTER THE SATISFACTION & APP ROVAL OF JT. CIT FOR RE- OPENING OF ASSESSMENT. THUS, THE CONDITIONS PRESCRI BED BY SEC. 151(2) OF THE ACT HAVE BEEN DULY COMPLIED. THE ONLY MISTAKE OCCUR RED IS THAT, IN THE REASONS RECORDED, THE SECTION HAS BEEN INADVERTENTL Y QUOTED AS 151(1) INSTEAD OF SECTION 151(2). 02) .. 03) .. (SACHIN JAWALE) DY. COMMISSIONER OF INCOME TAX CIRCLE-1, THANE 7. THE ASSESSING OFFICER IN ITS REPORT PLEADED THE INA DVERTENT MISTAKE IN QUOTING THE SECTION 151(1) INSTEAD OF SECTION 151(2 ). THE ASSESSING OFFICER WAS ASKED TO APPEAR IN PERSON VIDE ORDER DATED 31.0 3.2018. THE ASSESSING OFFICER APPEARED ON 12.10.2018. ON HIS APPEARANCE T HE ASSESSING OFFICER WAS DIRECTED TO FILE PROFORMA APPROVAL FOR OBTAININ G THE APPROVAL OF COMPETENT AUTHORITY UNDER SECTION 148. THE ASSESSIN G OFFICER VIDE HIS REPORT DATED 22.10.2018 FURNISHED COPY OF PROFORMA ALONG W ITH HIS REPORT DATED 16.10.2018. THE ASSESSING OFFICER IN ITS REPORT CON TENDED THAT THE REASONS OF ITA NO. 296 MUM 2016-ASHOK GANPAT THAKUR. 8 RE-OPENING WERE RECORDED ON 27.07.2011. THE ASSESSI NG OFFICER FORWARDED HIS PROPOSAL TO LD. CIT THROUGH JCIT VIDE LETTER DA TED 28.07.2011 COPY OF WHICH IS FILED AS ANNEXURE-2, ALONG WITH PROFORMA O F APPROVAL FOR INITIATING PROCEEDING UNDER SECTION 148. THE SAID PROPOSAL WAS SUBMITTED TO OFFICE OF JCIT ON 29.07.2011. THE JCIT SUBMITTED PROPOSAL TO CIT VIDE OFFICE LETTER DATED 02.08.2011. IT WAS SUBMITTED THAT THE COPY OF LETTER DATED 02.08.2011 IS NOT TRACEABLE. FURTHER, THE EVIDENCE REGARDING S ATISFACTION OF JCIT FOR RE- OPENING OF ASSESSMENT IS ALSO NOT TRACEABLE. THE AS SESSING OFFICER ALSO SUBMITS THAT NECESSARY ENQUIRIES WERE MADE IN THE O FFICE OF ACIT, RANGE-1, THANE AND PCIT-1, THANE. HOWEVER, THE SAID RECORD I S NOT TRACEABLE. IT IS MENTIONED IN THE REPORT THAT CIT VIDE LETTER DATED 10.08.2011 ADDRESSED TO JCIT ACCORDED APPROVAL FOR ISSUE OF NOTICE UNDER SE CTION 148. COPY OF WHICH IS ANNEXED AS ANNEXURE-3. 8. WE HAVE FURTHER PERUSED THE PROFORMA ATTACHED WITH ANNEXURE-2. THE PERUSAL OF PROFORMA ATTACHED WITH ANNEXURE-2 REVEAL S THAT IT IS NEITHER SIGNED BY COMPETENT PERSON/ ASSESSING OFFICER NOR A NY APPROVAL WAS ACCORDED. THE COLUMN NO.12 OF THIS PROFORMA IS ALSO BLANK. 9. ON OBTAINING THESE FACTUAL REPORTS, WE FURTHER HEAR D THE SUBMISSION OF LD. REPRESENTATIVE OF THE PARTIES. THE LD. AR OF THE AS SESSEE REITERATED HIS SUBMISSION AND CONTENDED THAT NO PROPER APPROVAL FR OM COMPETENT PERSON AS ITA NO. 296 MUM 2016-ASHOK GANPAT THAKUR. 9 REQUIRED UNDER SECTION 151(2) IS OBTAINED BY ASSESS ING OFFICER, THEREFORE, THE RE-OPENING UNDER SECTION 147 AND THE ISSUANCE O F NOTICE UNDER SECTION 148 IS BAD-IN-LAW AND THE ASSESSMENT ORDER MADE IN PURSUANCE OF NOTICE UNDER SECTION 148 IS LIABLE TO BE QUASHED. THE LD. AR OF THE ASSESSEE FURTHER RELIED UPON THE DECISION OF CIT VS. AQUATIC REMEDIE S PVT. LTD., 96 TAXMANN.COM 609 (BOM) (2018), GHANSHYAM K. KHABRANI VS. ACIT, 346 ITR 443 (BOM) (2012) AND ANIL JAGGI VS. ACIT, 89 TA XMANN.COM 266 (MUM) (2018). 10. PER CONTRA, THE LD. DR SUPPORTED THE ORDER OF LOWER AUTHORITIES AND WOULD SUBMIT THAT RE-ASSESSMENT PROCEEDING CANNOT BE QUAS HED JUST BECAUSE THE ASSESSING OFFICER HAD OBTAINED PRIOR APPROVAL FROM HIGHER AUTHORITIES. IN SUPPORT OF HIS SUBMISSION, THE LD. DR RELIED UPON T HE DECISION OF AHMEDABAD TRIBUNAL IN MAYURBHAI MANGALDAS PATEL VS. ITO [2017] (88 TAXMANN.COM 289), WHICH WAS APPROVED BY HONBLE GUJ ARAT HIGH COURT IN TAX APPEAL NO. 29 OF 2018. IN REJOINDER SUBMISSION, THE LD. DR SUBMITS THAT THE RELIANCE OF LD. DR IN MAYURBHAI MANGALDAS PATEL (SUPRA) IS MISPLACED. THE DECISIONS OF JURISDICTIONAL HIGH COURT ALONE HA VE BINDING PRECEDENT. THOUGH, THE RATIO IN MAYURBHAI MANGALDAS PATEL IS NOT APPLICABLE, THE HONBLE GUJARAT HIGH COURT HAS CLEARLY HELD THAT TH E PAPERS FOR OBTAINING APPROVAL WERE ERRONEOUSLY PLACED BEFORE COMMISSIONE R, WHO RECORDED ITA NO. 296 MUM 2016-ASHOK GANPAT THAKUR. 10 SIMILAR APPROVAL. HOWEVER, IN THE PRESENT CASE, THE RE IS NO APPROVAL EITHER OR JCIT OR CIT AS EVIDENT FROM THE VARIOUS REPORT FURN ISHED BY ASSESSING OFFICER. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PAR TIES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ASSESS ING OFFICER RECORDED THE FOLLOWING REASONS OF REOPENING: 148 NOTICE REASON: 27 TH JULY 2011: A SEARCH ACTION WAS CONDUCTED IN THE CASE OF SHREE TIRUPATI GROUP OF CASES ON 25/03/2011, WHEREIN AT THE RESIDENTIAL PREMISES OF SHRI SUNIL GUPTA ONE OF THE PARTNER OF THE GROUP CERTAIN DOCUMENTS WERE STATED TO HAVE BEE N SEIZED. THE ITO (INV.), KALYAN VIDE HIS LETTER DATED 26/07 /2011 RECEIVED IN CLOSED COVER HAS SENT RELEVANT COPIES OF THE DOCUMENTS SHOWING T HAT TDR WAS PURCHASED IN RESPECT OF PLOT NO. 116, PARSIK, KALWA FROM THE OWNER WHO I N THE INSTANT CASE IS THE ASSESSEE ITSELF. AS PER THE SEIZED DOCUMENTS SENT A CASH DEP OSIT OF RS. 75,00,000/- WAS PAID BY SHREE TIRUPATI GREENFIELD DEVELOPERS, ONE OF THE FI RMS OF SHREE TIRUPATI GROUP TO SMT BAMIBHAI GANPAT THAKUR FOR OBTAINING THE TDS. THE R EPORT OF THE ITO(INV.) FURTHER STATES THAT THE COST OF THE TDR IS RS. 1,50,00,000/ - (ONE CRORE FIFTY LAKH). ON THE BASIS OF THE INFORMATION RECEIVED FROM THE KALYAN INVESTI GATION WING. I HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMEN T FOR AY 2006-07 WITHIN THE MEANING OF SEC. 147. CONCLUDING THE ABOVE FACTS AND IN VIEW OF SEC. 151 (1) THE APPROVAL OF THE CIT-I, THANE HAS BEEN OBTAINED PRIOR TO ISSUE OF NOTICE U/ S 148. SINCE THE AY IN QUESTION IS 2006-07. (C.T.MATHEWS) ASSTT. COMMISSIONER OF INCOME-TAX CIRCLE-I, THANE 12. THE HONBLE BOMBAY HIGH COURT IN GHANSHYAM K. KHABR ANI VS. ACIT (SUPRA) HELD THAT SECTION 151(2) MANDATES SATISFACT ION OF JOINT COMMISSIONER ITA NO. 296 MUM 2016-ASHOK GANPAT THAKUR. 11 FOR ISSUANCE OF NOTICE UNDER SECTION 148 IN CERTAIN CASES, REOPENING OF ASSESSMENT WITH APPROVAL OF COMMISSIONER IS UNSUSTA INABLE. FOR PROPER APPRECIATION OF LEGAL POSITION, THE RELEVANT PART O F THE DECISION IS REPRODUCED BELOW: 6. THE SECOND GROUND UPON WHICH THE REOPENING IS SOUG HT TO BE CHALLENGED IS THAT THE MANDATORY REQUIREMENT OF ELECTION 151(2) H AS NOT BEEN FULFILLED. SECTION 151 REQUIRES A SANCTION TO BE TAKEN FOR THE ISSUANC E OF A NOTICE UNDER SECTION 148 IN CERTAIN CASES. IN THE PRESENT CASE, AN ASSESSMEN T HAD NOT BEEN MADE UNDER SECTION 143(3) OR SECTION 147 FOR A.Y. 2004-05. HEN CE, UNDER SUB-SECTION 2 OF SECTION 151, NO NOTICE CAN BE ISSUED UNDER SECTION 148 BY AN ASSESSING OFFICER WHO IS BELOW THE RANK OF JOINT COMMISSIONER AFTER T HE EXPIRY OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS THE JOIN T COMMISSIONER IS SATISFIED, ON THE REASONS RECORDED BY SUCH ASSESSING OFFICER, THAT IT IS A FIT CASE FOR THE ISSUE OF SUCH NOTICE. THE EXPRESSION 'JOINT COMMISSIONER' IS DEFINED IN SECTION 2(28C) TO MEAN A PERSON APPOINTED TO BE A JOINT COMMISSION ER OF INCOME TAX OR AN ADDITIONAL COMMISSIONER OF INCOME TAX UNDER SECTION 117(1). IN THE PRESENT CASE, THE RECORD BEFORE THE COURT INDICATE THAT THE ASSESSING OFFICER SUBMITTED A PROPOSAL ON 28 MARCH 2011 TO THE CIT(1) THANE THROU GH THE ADDITIONAL COMMISSIONER OF INCOME-TAX RANGE (1) THANE. ON 28 M ARCH 2011, THE ADDITIONAL CIT FORWARDED THE PROPOSAL TO THE CIT AN D AFTER RECORDING A GIST OF THE COMMUNICATION OF THE ASSESSING OFFICER STATED THAT : 'AS REQUESTED BY THE A.O. NECESSARY APPROVAL FOR IS SUE OF NOTICE U/S. 148 MAY KINDLY BE GRANTED IN CASE, IF APPROVED.' ON THIS A COMMUNICATION WAS ISSUED ON 29 MARCH 2011 FROM THE OFFICE OF THE CIT(1) CONVEYING APPROVAL TO THE PROPOSAL SUBMITTED BY THE ASSESSING OFFICER. THERE IS MERIT IN THE CONTENTION RAISED ON BEHALF O F THE ASSESSEE THAT THE REQUIREMENT OF SECTION 151(2) COULD HAVE ONLY BEEN FULFILLED BY THE SATISFACTION OF THE JOINT COMMISSIONER THAT THIS IS A FIT CASE FOR THE ISSUANCE OF A NOTICE UNDER SECTION 148. SECTION 151(2) MANDATES THAT THE SATIS FACTION HAS TO BE OF THE JOINT COMMISSIONER. THAT EXPRESSION HAS A DISTINCT MEANIN G BY VIRTUE OF THE DEFINITION INFECTION 2(28C). THE COMMISSIONER-OF INCOME TAX IS NOT A JOINT COMMISSIONER WITHIN THE MEANING OF SECTION 2(28C). IN THE PRESEN T CASE, THE ADDITIONAL COMMISSIONER OF INCOME TAX FORWARDED THE PROPOSAL S UBMITTED BY THE ASSESSING OFFICER TO THE COMMISSIONER OF INCOME TAX APPROVAL WHICH HAS BEEN GRANTED IS NOT BY THE ADDITIONAL COMMISSIONER OF INCOME TAX BU T BY THE COMMISSIONER OF ITA NO. 296 MUM 2016-ASHOK GANPAT THAKUR. 12 INCOME TAX. 'THERE IS NO STATUTORY PROVISION HEREUN DER WHICH A POWER TO BE EXERCISED BY AN OFFICER CAN BE EXERCISED BY A SUPER IOR OFFICER. WHEN THE STATUTE MANDATES THE SATISFACTION OF A PARTICULAR FUNCTIONA RY FOR THE EXERCISE OF A POWER, THE SATISFACTION MUST BE OF THAT AUTHORITY. WHERE A STATUTE REQUIRES SOMETHING TO BE DONE IN A PARTICULAR MANNER, IT HAS TO BE DONE IN T HAT MANNER. IN A SIMILAR SITUATION THE DELHI HIGH COURT IN CIT V. SPL'S SIDDHARTHA LTD. [2012] 204 TAXMAN 115 / 17 TAXMANN.COM 138 (DELHI) HELD THAT POWERS WHICH ARE CONFERRED UPON A PARTICULAR AUTHORITY HAVE TO BE EXERCISED BY THAT A UTHORITY AND THE SATISFACTION WHICH THE STATUTE MANDATES OF A DISTINCT AUTHORITY CANNOT BE SUBSTITUTED BY THE SATISFACTION OF ANOTHER. WE ARE IN RESPECTFUL AGREE MENT WITH THE JUDGMENT OF THE DELHI HIGH COURT. 7. IN VIEW OF THE FINDINGS WHICH WE HAVE RECORDED ON SUBMISSIONS (I), (II) AND (IV), IT IS NOT NECESSARY FOR THE COURT TO CONSIDER SUBMI SSION (III) WHICH HAS BEEN URGED ON BEHALF OF THE ASSESSEE. ONCE THE COURT HAS COME TO THE CONCLUSION THAT THERE WAS NO COMPLIANCE OF THE MANDATORY REQUIREMENTS OF SECTION 147 AND 151(2), THE NOTICE REOPENING THE ASSESSMENT CANNOT BE SUSTAINED IN LAW. 13. FURTHER, THE HONBLE BOMBAY HIGH COURT IN CIT VS. AQUATIC REMEDIES PVT. LTD. (SUPRA) WHILE REFERRING THE DECISION OF GHANSH YAN K. KHABRANI HELD THAT IT IS UNDISPUTED POSITION THAT IN TERMS OF SECTION 151(2), THE SANCTIONING/PERMISSION TO ISSUE NOTICE UNDER SECTIO N 148 HAS TO BE ISSUED BY THE ADDITIONAL COMMISSIONER. THE ASSESSING OFFICER HAS NOT SOUGHT THE APPROVAL OF THE DESIGNATED OFFICER BUT OF THE COMMI SSIONER. THIS IS CLEAR FROM THE FORM USED TO OBTAIN THE SANCTION. IN ANY C ASE, FROM THE APPROVAL/SATISFACTION RECORDED IN THE FORM SUBMITTE D FOR SANCTION OF THE COMMISSIONER BY THE ASSESSING OFFICER, IT IS CLEAR THAT THE ADDITIONAL COMMISSIONER HAD NOT GRANTED PERMISSION TO INITIATE RE-OPENING PROCEEDINGS AGAINST THE RESPONDENT-ASSESSEE. THE VIEW OF THE AD DITIONAL COMMISSIONER WAS SUBJECT TO THE APPROVAL OF HIS SUPERIOR - THE C OMMISSIONER. THUS, THERE ITA NO. 296 MUM 2016-ASHOK GANPAT THAKUR. 13 WAS NO FINAL SANCTION GRANTED BY THE ADDITIONAL COM MISSIONER FOR ISSUING THE NOTICE TO RE-OPEN THE ASSESSMENT. FURTHER, IT I S THE COMMISSIONER WHO DIRECTED THE ISSUANCE OF THE NOTICE UNDER SECTION 1 48 TO THE ASSESSING OFFICER. THUS, IT IS VERY CLEAR THAT THE FINAL SANC TION/APPROVAL WAS THAT OF THE COMMISSIONER AS INDICATED IN THE FORM. 14. THE CASE IN HAND RELATES TO ASSESSMENT YEAR 2006-07 . THE NOTICE UNDER SECTION 148 WAS ISSUED ON 23.09.2011. ADMITTEDLY, T HE ASSESSMENT WAS RE- OPENED AFTER FOUR YEAR FROM THE END OF RELEVANT ASS ESSMENT YEAR. AS PER SUB-SECTION (2) OF SECTION 151, NO NOTICE CAN BE IS SUED UNDER SECTION 148 BY ASSESSING OFFICER WHO IS BELOW THE RANK OF JCIT AFT ER THE EXPIRY OF FOUR YEAR FROM THE END OF RELEVANT ASSESSMENT YEAR UNLES S THE JCIT IS SATISFIED, ON THE REASONS RECORDED BY ASSESSING OFFICER THAT I T IS A FIT CASE FOR ISSUANCE OF SUCH NOTICE. AS WE HAVE NOTED EARLIER THERE IS NO APPROVAL OF CIT AS CLAIMED BY ASSESSING OFFICER WHILE ISSUING NOTICE U NDER SECTION 148 DATED 23.09.2011. FURTHER, THERE IS NO MATERIAL ON RECORD TO SHOW THAT APPROVAL WAS OBTAINED FROM JCIT, THIS FACT HAS BEEN ADMITTED BY ASSESSING OFFICER IN HIS REPORT FURNISHED BEFORE US. THUS, CONSIDERING T HE DECISION OF JURISDICTIONAL HIGH COURT IN GHANSHYAM K. KHABRANI AND AQUATIC REMEDIES PVT. LTD. (SUPRA), THE ASSESSING OFFICER FAILED TO COMPLY THE CONDITION PRESCRIBED UNDER SECTION 151(2). THEREFORE, THE NOT ICE UNDER SECTION 148 IS ITA NO. 296 MUM 2016-ASHOK GANPAT THAKUR. 14 INVALID AND SUBSEQUENT ACTION OF ASSESSING OFFICER IS VOID AB INITIO. THE CASE LAW RELIED BY LD. DR IN MAYURBHAI MANGALDAS PATEL ( SUPRA) IS NOT APPLICABLE ON THE FACTS OF PRESENT CASE AS THERE IS CLEAR FIND ING OF HONBLE HIGH COURT THAT NECESSARY PAPER FOR APPROVAL WAS ERRONEOUSLY P LACED BEFORE CIT. MOREOVER, THE DECISION OF JURISDICTIONAL HIGH COURT IS A BINDING PRECEDENT ON THIS TRIBUNAL. IN THE RESULT, GROUND NO.1 OF THE APPEAL RAISED BY ASSESSEE IS ALLOWED. 15. AS WE HAVE ALLOWED THE GROUND NO.1 WHICH IS JURISDI CTIONAL ISSUE. THEREFORE, THE DISCUSSION ON GROUND NO.2 & 3 WHICH RELATES TO MERIT OF THE CASE HAVE BECOME ACADEMIC. 16. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/ 01/2019. SD/ SD/- G.S. PANNU PAWAN SINGH VICE-PRESIDENT JUDICIAL MEMBER MUMBAI, DATE: 11.01.2019 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR A BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI