ITO, New Delhi V. Sh. Jagdish Kumar Yadav, New Delhi

ITA 819/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9929 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2006-2007
• Appeal Filed On: 16-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Keywords: Business income
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: B, NEW DELHI) BEFORE SH. N. K. BILLAIYA, ACCOUNTANT MEMBER AND SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO:-819/DEL/2016 ( ASSESSMENT YEAR: 2006-07) INCOME TAX OFFICER WARD 44 (4), ROOM NO.2610, 26TH FLOOR, E-2, CIVIC CENTRE, MINTO ROAD, NEW DELHI -110002 VS. JADGISH KUMAR YADAV 368, NEAR SBI, KAPASHERA NEW DELHI PAN NO. AAOPY7980R APPELLANT RESPONDENT APPELLANT BY : MS. ASHIMA NEB, SR. DR RESPONDENT BY : SH. ROHIT TIWARI, ADVOCATE DATE OF HEARING : 29.05.2019 DATE OF PRONOUNCEMENT : 30.05.2019 ORDER PER: N. K. BILLAIYA, AM WITH THIS APPEAL THE REVENUE HAS CHALLENGED THE COR RECTNESS OF THE ORDER OF THE CIT(A)-15, NEW DELHI DATED 29.12.2015 PERTAINING TO A.Y 2006-07. 2. THE GRIEVANCE OF THE REVENUE READ AS UNDER :- 2 3. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS RIGHT IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 3,50,80,035/- MADE BY THE ASSESSING OFFICER TO THE INCOME OF THE ASSESSEE, ON ACCOUNT OF BUSINESS INCOME? 3. GRIEVANCE RAISED VIDE GROUND NO.1 GOES TO THE RO OT OF THE MATTER AS THE ASSESSMENT ORDER HAS BEEN ANNULLED BY THE CIT(A ). 4. REPRESENTATIVES OF BOTH THE SIDES WERE HEARD AT LENGTH. CASE RECORD CAREFULLY PERUSED AND THE RELEVANT DOCUMENTARY EVID ENCES BROUGHT IN THE FORM OF THE PAPER BOOK HAVE BEEN CONSIDERED IN THE LIGHT OF RULE 18(6) OF THE ITAT RULES. 5. THE REASONS FOR REOPENING THE ASSESSMENT READ AS UNDER :- 3 6. THE APPROVAL GIVEN BY THE ADDITIONAL CIT(A), RAN GE-1, GURGAON READ AS UNDER :- 4 7. NOTICE U/S. 148 OF THE ACT DATED 28.03.2016 IS A S UNDER :- 5 8. IN OUR CONSIDERED VIEW THE SO CALLED APPROVAL BR OUGHT ON RECORD CANNOT BE CONSIDERED AS AN APPROVAL WITHIN THE FRAM E WORK OF PROVISIONS OF SECTION 151 OF THE ACT. 9. SECTION 151 READ AS UNDER :- (1) IN A CASE WHERE AN ASSESSMENT UNDER SUB-SECTION (3) OF SECTION 143 OR SECTION 147 HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR, NO NOTICE SHALL BE ISSUED UNDER SECTION 148 [BY AN ASSESSING OFFICER, WHO IS BELOW THE RANK OF ASSISTANT COMMISSIONER [OR DEPUTY 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] : PROVIDED THAT, AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, NO SUCH NOTICE SHALL BE ISSUED UNLESS THE CHIEF COMMISSIONER OR COMMISSIONER IS SATISFIED, ON THE REASONS RECORDED BY THE ASSESSING OFFICER AFORESAID, THAT IT IS A FIT CASE FOR THE ISSUE OF SUCH NOTICE. (2) IN A CASE OTHER THAN A CASE FALLING UNDER SUB-SECTION (1), NO NOTICE SHALL BE ISSUED UNDER SECTION 148 BY AN ASSESSING OFFICER, WHO IS BELOW THE RANK OF [JOINT] COMMISSIONER, AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, 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.] [EXPLANATION.FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT THE JOINT COMMISSIONER, THE COMMISSIONER OR THE CHIEF 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 UNDER SECTION 148, NEED NOT ISSUE SUCH NOTICE HIMSELF.] 10. A SIMPLE READING OF THE PROVISIONS OF SEC. 151 (1) WITH THE PROVISO CLEARLY SHOW THAT NO SUCH NOTICE SHALL BE ISSUED UN LESS THE COMMISSIONER IS SATISFIED ON THE REASONS RECORDED BY THE AO THAT IT IS A FIT CASE FOR THE ISSUE OF NOTICE WHICH MEANS THAT THE SATISFACTION O F THE COMMISSIONER IS 6 PARAMOUNT FOR WHICH THE LEAST THAT IS EXPECTED FROM THE COMMISSIONER IS APPLICATION OF MIND AND DUE DILIGENCE BEFORE ACCORD ING SANCTION TO THE REASONS RECORDED BY THE AO. IN THE PRESENT CASE, T HE APPROVAL WHICH IS PLACED ON RECORD SHOW THAT THE ADDL. COMMISSIONER H AS SIMPLY APPROVED BY WAY OF A LETTER WHICH ALSO INCLUDES APPROVAL FOR ONE MORE ASSESSEE. NOWHERE THE ADDL. CIT HAS RECORDED HIS SATISFACTION . 11. IN THE LIGHT OF THE ABOVE MENTIONED REASONS , IN OUR CONSIDERATE VIEW, SECTION 147 AND 148 ARE CHARTER TO THE REVENU E TO REOPEN EARLIER ASSESSMENTS AND ARE, THEREFORE PROTECTED BY SAFEGUA RDS AGAINST UNNECESSARY HARASSMENT OF THE ASSESSEE. THEY ARE SW ORD FOR THE REVENUE AND SHIELD FOR THE ASSESSEE. SECTION 151 GUARDS THA T THE SWORD OF SEC. 147 MAY NOT BE USED UNLESS A SUPERIOR OFFICER IS SATISF IED THAT THE AO HAS GOOD AND ADEQUATE REASONS TO INVOKE THE PROVISIONS OF SE C. 147. THE SUPERIOR AUTHORITY HAS TO EXAMINE THE REASONS, MATERIAL OR G ROUNDS AND TO JUDGE WHETHER THEY ARE SUFFICIENT AND ADEQUATE TO THE FOR MATION OF THE NECESSARY BELIEF ON THE PART OF THE ASSESSING OFFICER. IF, AF TER APPLYING HIS MIND AND ALSO RECORDING HIS REASONS, HOWSOEVER BRIEFLY, THE ADDL. COMMISSIONER IS OF THE OPINION THAT THE AOS BELIEF IS WELL REASONED A ND BONAFIDE, HE IS TO ACCORD HIS SANCTION TO THE ISSUE OF NOTICE U/S. 148 OF THE ACT. IN THE INSTANT CASE, WE FIND FROM THE PERUSAL OF THE APPROVAL WHIC H IS ON RECORD, THE ADDL. COMMISSIONER HAS SIMPLY ACCORDED APPROVAL AND SIGNED THE LETTER THEREBY GIVING SANCTION TO THE AO. NOWHERE THE ADDL . COMMISSIONER HAS RECORDED A SATISFACTION NOTE NOT EVEN IN BRIEF. THE REFORE, IT CANNOT BE SAID THAT THE COMMISSIONER HAS ACCORDED SANCTION AFTER A PPLYING HIS MIND AND AFTER RECORDING HIS SATISFACTION. 7 12. HONBLE DELHI HIGH COURT IN THE CASE OF UNITED ELECTRICAL CO. PVT. LTD. VS CIT 258 ITR 317 HAS HELD THAT THE PROVISO TO SU B-SECTION (1) OF SECTIONL51OF THE ACT PROVIDES THAT AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, NOTICE UNDER S ECTION 148 SHALL NOT BE ISSUED UNLESS THE CHIEF COMMISSIONER OR THE COMMISS IONER, AS THE CASE MAY BE, IS SATISFIED, ON THE REASONS RECORDED BY TH E ASSESSING OFFICER CONCERNED, THAT IT IS A FIT CASE FOR THE ISSUE OF S UCH NOTICE. THESE ARE SOME IN-BUILTS SAFEGUARDS TO PREVENT ARBITRARY EXERCISE OF POWER BY AN ASSESSING OFFICER TO FIDDLE WITH THE COMPLETED ASSESSMENT. T HE HONBLE HIGH COURT FURTHER OBSERVED THAT WHAT DISTURBS US MORE IS THA T EVEN THE ADDITIONAL COMMISSIONER HAS ACCORDED HIS APPROVAL FOR ACTION U NDER SECTION 147 MECHANICALLY. WE FEEL THAT IF THE ADDITIONAL COMMIS SIONER HAD CARED TO GO THROUGH THE STATEMENT OF THE SAID PARTIES, PERHAPS HE WOULD NOT HAVE GRANTED HIS APPROVAL, WHICH WAS MANDATORY IN TERMS OF THE PROVISO TO SUB- SECTION (1) OF SECTION 151 OF THE ACT AS THE ACTION UNDER SECTION 147 WAS BEING INITIATED AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THE POWER VESTED IN THE ADDL. COMM ISSIONER TO GRANT OR NOT TO GRANT APPROVAL IS COUPLED WITH A DUTY. THE C OMMISSIONER IS REQUIRED TO APPLY HIS MIND TO THE PROPOSAL PUT UP TO HIM FOR APPROVAL IN THE LIGHT OF THE MATERIAL RELIED UPON BY THE ASSESSING OFFICER. THE SAID POWER CANNOT BE EXERCISED CASUALLY AND IN A ROUTINE MANNER. WE A RE CONSTRAINED TO OBSERVE THAT IN THE PRESENT CASE THERE HAS BEEN NO APPLICATION OF MIND BY THE ADDITIONAL COMMISSIONER BEFORE GRANTING THE APP ROVAL. 13. THE OBSERVATIONS OF THE HONBLE HIGH COURT ARE VERY MUCH RELEVANT IN THE INSTANT CASE AS IN THE PRESENT CASE ALSO THE AD DL. COMMISSIONER HAS SIMPLY MENTIONED APPROVED TO THE REPORT SUBMITTED BY THE CONCERNED 8 AO. IN THE LIGHT OF THE RATIOS/OBSERVATIONS OF THE HONBLE HIGH COURT MENTIONED HEREINABOVE, WE HAVE NO HESITATION TO HOL D THAT THE REOPENING PROCEEDINGS VIS-A-VIS PROVISIONS OF SEC. 151 ARE BA D IN LAW AND THE ASSESSMENT HAS TO BE DECLARED AS VOID AB INITIO AND RIGHTLY DONE SO BY CIT(A). NO INTERFERENCE IS CALLED FOR. 13. AS WE HAVE HELD THAT THE REASSESSMENT IS BAD I N LAW, WE DO NOT FIND IT NECESSARY TO DECIDE OTHER ISSUES WHICH ARE ON MERIT S OF THE CASE. 14. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.05.2019. SD/- SD/- (SUDHANSHU SRIVASTAVA) (N.K.BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30 .05.2019 NEHA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 9 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER