Assistant Commissioner of Income Tax, Circle-Shillong, Shillong V. M/s. Macil Projects (p) Limited, Byrnihat

ITA 462/GTY/2019

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 9035 (ITAT-GUWAHATI)
• Duration Of Justice: 1 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Appeal Filed On: 08-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: KISHOR JAIN
• Keywords: Unexplained investment
• Section: 147; 148; 143(3); 113

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL “GAUHATI” BENCH, KOLKATA (E-COURT HEARING AT KOLKATA) BEFORE HON’BLE SHRI LALIT KUMAR, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं./ I.T.A. No. 462/Gau/2019 (िनधाŊरण वषŊ / Assessment Year: 2016-17) ACIT, Circle-Shillong Dibrugarh-786008 (Assam) बनाम/ Vs. M/s. Macil Projects Private Limited Patharkuchi, Khanapara, Byrnihat Ri-Bhoi District, Meghalaya – 793101. ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. AADCM-2052-J (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) Revenue by : Shri N.T. Sherpa. Ld. JCIT-Sr.DR Assessee by : Shri Kishor Jain, CA- Ld. AR सुनवाई की तारीख/ Date of Hearing : 09/11/2021 घोषणा की तारीख / Date of Pronouncement : 09/11/2021 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by revenue for Assessment Year (AY) 2016-17 arises out of the order the Ld. Commissioner of Income Tax (Appeals), Shillong [Ld. CIT(A)] dated 16.09.2019 in the matter of assessment framed by the Ld. AO u/s 143(3) read with section 147 of the Income Tax Act, 1961 on 22.12.2018. 2. The sole ground raised by the department read as under: The Ld. CIT(A) erred in holding that the notice u/s 148 of the I.T. Act, 1961 was issued without the sanction of the Joint/Additional Commissioner of Income Tax (Range-Head). The fact is that online approval was accorded by the Additional Commissioner of Income Tax, Range Shillong (Range-Head) through ITBA Systems on 06.03.2018 before issuance of notice under section 148 of the Income Tax Act, 1961. 2 3. The Ld. Sr. DR submitted that the appeal has been allowed by Ld. CIT(A) oN legal grounds for want of requisite approval as against the fact that online approval was accorded by Joint / Additional Commissioner of Income Tax, Range Shillong (Range-Head) through ITBA Systems on 06.03.2018 before issuance of notice u/s 148. The Ld. AR, on the other hand, submitted that approval to reopen the case was not obtained by Ld. AO as per the statutory mandate and therefore, the legal ground has rightly been allowed by Ld. CIT(A) in the impugned order. The Ld. AR referred to the adjudication of Ld. CIT(A), in this regard. Having heard rival submission our adjudication would be as under. 4. The material facts are that pursuant to receipt of certain information from Investigation wing, Guwahati, it was alleged that the assessee made excessive investments. Hence, the case was reopened for the year by issuance of notice u/s 148 on 06.03.2018. It is evident that the case was reopened within 4 years from the end of relevant assessment year. The assessment order record the fact that case was proposed to be reopened u/s 147 and approval for the same was also duly accorded by Ld. Pr. CIT, Shillong. Accordingly, an assessment was framed on 22.12.2018 wherein the assessee was saddled with addition of unexplained investment for Rs.120.11 Lacs and another disallowance of Rs.35.56 Lacs. 5. During appellate proceedings, the assessee challenged the jurisdiction of Ld. AO, in terms of provisions of sub-section (2) of section 151 by submitting that the approval was not obtained as per statutory mandate. The Ld. CIT(A), after perusal of approval letter u/s 151 as forwarded by Ld. AO, concurred with assessee’s submissions that no notice could be issued u/s 148 by an officer below the rank of Joint 3 Commissioner within a period of four years from the end of assessment order unless the Joint Commissioner is satisfied on the reasons recorded by AO about fitness of case for issuance of notice. Accordingly, the sanction was to be obtained from Joint / Additional CIT as against the fact that the same was obtained from Pr. CIT. Therefore, relying upon various judicial decisions as enumerated in the impugned order, the notice issued u/s 148 was held to be invalid. The judicial decisions as referred to by Ld. CIT(A) include the decision of Hon’ble Delhi High Court in the case of CIT V/s SPL’s Siddhartha Ltd. (345 ITR 223) and the decision of Hon’ble Bombay High Court in Ghanshyam K.Khabrani V/s ACIT (346 ITR 443) as followed by Hon’ble Court in subsequent decisions titled as DSJ Communication Ltd. V/s DCIT (WP No.722 of 2011; 13/09/2012) and CIT V/s Aquatic Remedies (P) Ltd. (96 Taxmann.com 609; 25/07/2018). Accordingly, the grounds were not adjudicated. Aggrieved, the revenue is in further appeal before us. 6. Upon careful consideration, we find that it is a fact recorded by Ld. AO in the assessment order that the case was proposed to be reopened u/s 147 and approval for the same was duly accorded by Ld. Pr. CIT, Shillong. No document showing that any such approval was obtained by Ld. AO from Joint / Additional Commissioner has been shown to us. The Ld. Sr. DR has submitted that the online approval was accorded by Joint / Additional Commissioner of Income Tax, Range Shillong (Range-Head) through ITBA Systems on 06.03.2018 before issuance of notice u/s 148. However, we are of the considered opinion that what is required under law is sanction for issue of notice with due application of mind on the part of Joint / Additional Commissioner. The sanctioning authority has to be satisfied that it was a fit case for issuance of notice u/s 148. No such 4 application of mind has shown to be on record. This being so, the adjudication of Ld. CIT(A) could not be interfered with keeping in view the aforesaid judicial pronouncements. In fact, SLP filed by the department against the decision of Hon’ble Bombay High Court in CIT V/s Aquatic Remedies (P) Ltd. (96 Taxmann.com 609; 25/07/2018) has already been dismissed by Hon’ble Supreme Court on 29/11/2019 which is reported at 113 Taxmann.com 451. 7. Resultantly, the appeal stand dismissed. Order pronounced on 09 th November, 2021. Sd/- Sd/- (Lalit Kumar) (Manoj Kumar Aggarwal) Ɋाियक सद˟ / Judicial Member लेखा सद˟ / Accountant Member Kolkata; िदनांक Dated: 09/11/2021 Biswajit, Sr. P.S. आदेशकीŮितिलिपअŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ/ The Appellant: ACIT, Circle, Shillong 2. ŮȑथŎ/ The Respondent: M/s. Macil Projects Pvt. Ltd. 3. आयकरआयुƅ(अपील) / The CIT(A) 4. आयकरआयुƅ/ CIT– concerned 5. िवभागीयŮितिनिध, आयकरअपीलीयअिधकरण, DR, ITAT, Guwahati 6. गाडŊफाईल / Guard File आदेशानुसार/ BY ORDER, Senior P.S आयकरअपीलीयअिधकरण, ITAT, Kolkata.