Shri Anil G. Kumawat, Surat V. The Income Tax Officer, Ward-3(3)(1), Surat

MA 56/SRT/2022

AI Insights

This case involves a set of five Miscellaneous Applications (MAs) filed by different assessees seeking rectification of a consolidated order dated 18.07.2022, which had dismissed their appeals against the Income Tax Officer's assessments for the assessment years 2007-08 to 2009-10. The main contention was regarding the jurisdiction of the Assessing Officer and the competence of the authority who approved the reopening of assessments. The assessees argued that the approval was not granted by a competent authority as required under Section 151 of the Income Tax Act, 1961. The Tribunal, after reviewing the submissions and evidence, upheld the original decision, finding that the Additional Commissioner of Income-tax was indeed the competent authority at the time the approvals were granted.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 302208 (ITAT-SURAT)
• Duration Of Justice: 5 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-05-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 11-05-2023
• Assessment Year: 2008-2009
• Appeal Filed On: 18-12-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Accommodation entries; Competent authority
• Section: 147; 148; 143(3); 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER M.A.Nos.55 & 56/SRT/2022 (Arising out of ITA Nos. 1383-1384/AHD/2017) (AYs 2007-08 & 2008-09) (Hearing in Physical Court) Anil G. Kumawat 126, Sardar Complex, Mini Bazar, Varachha Road, Surat-395003 PAN: ARNPK 7859 D Vs Income Tax Officer, Ward-3(3)(1), Surat, Aaykar Bhavan, Nr. Majura Gate, Surat-395001 Applicant /assessee Respondent /Revenue M.A.No.57/SRT/2022 (Arising out of ITA No. 1380/AHD/2017) (AY 2007-08) Virendra Kumar Lodha 143, Shreeji Awas, Mini Bazar, Varachha Road, Surat-395003 PAN: AABPL 9737 E Vs Income Tax Officer, Ward-3(3)(5), Surat, Aaykar Bhavan, Nr. Majura Gate, Surat-395001 Applicant /assessee Respondent /Revenue M.A.No.58/SRT/2022 (Arising out of ITA No. 1392/AHD/2017) (AY 2007-08) Naresh Pareek 143, Shreeji Awas, Mini Bazar, Varachha Road, Surat-395003 PAN: ACFPP 2877 H Vs Income Tax Officer, Ward-3(3)(3), Surat, Aaykar Bhavan, Nr. Majura Gate, Surat-395001 Applicant /assessee Respondent /Revenue M.A.No.59/SRT/2022 (Arising out of ITA No. 1390/AHD/2017) (AY 2007-08) Sharad Y Jain 146, Shreeji Awas, Mini Bazar, Varachha Road, Surat-395003 PAN: ACXPJ 4341 G Vs Income Tax Officer, Ward-3(3)(4), Surat, Aaykar Bhavan, Nr. Majura Gate, Surat-395001 M.A No.s 55-59/SRT/2022 (a/o ITA Nos.1383-1384,1380,1392, 1390/AHD/2017 pg. 2 Applicant /assessee Respondent /Revenue िनधाŊįरती की ओर से /Assessee by Shri Suchek Anchalia, C.A राजˢ की ओर से /Revenue by Shri Vinod Kumar – Sr. DR सुनवाई की तारीख/Date of hearing 12.05.2023 उद्घोषणा की तारीख/Date of pronouncement 19.05.2023 Order under section 254(2) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This set of five Miscellaneous Applications (MAs) under section 254(2) of Income-tax Act are filed by the four different assessees for seeking rectification in the consolidated order dated 18.07.2022 passed in nineteen appeals of Revenue as well as different assessees for AYs 2007-08 to 2009-10. In all MAs, the assessees have raised common contention, therefore, with the consent of both the parties all the MAs were clubbed heard together and are decided by a consolidated order to avoid a conflicting decision. 2. For appreciation of facts, the facts pleaded in MA No.55/SRT/2022, in the case of Anil G. Kumawat, is treated as “lead” case. 3. The ld. Authorized Representative (Ld.AR) for the assessee submits that in all corresponding appeals, the assessee has raised specific ground regarding assumption of jurisdiction by Assessing Officer for initiation of assessment proceedings being bad-in-law, M.A No.s 55-59/SRT/2022 (a/o ITA Nos.1383-1384,1380,1392, 1390/AHD/2017 pg. 3 wherein approval as required under section 151 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) was not granted by specific authority specified therein. The ld. AR for the assessee submits that approval in all cases were obtained from Additional Commissioner of Income-tax, who was not competent to give such approval for reopening assessment. The Tribunal while rejecting the submission of assessee held that assessee has not filed any provided any evidence on record to substantiate such submission. In case of Anil G Kumawat in ITA No. 1383/Ahd/2017, the assessee has filed necessary evidence showing that necessary approval was granted by Additional Commissioner of Income-tax, such evidence is available at page No.2 of Paper Book. However, in all other case, such fact is mentioned in the assessment order itself. The Ld. AR for the assessee submits that admittedly in all cases, the approval was granted by Additional Commissioner of Income-tax, who was not a competent authority to grant such approval that the reopening assessment was bad-in-law. The Tribunal has not considered such fact at the time of adjudicating all the corresponding appeals, which is mistake apparent in the order and require rectification. The Ld. AR for the assessee submits that Tribunal’s order dated 18.07.2022 passed in corresponding appeals either may be rectified or may be recalled for adjudicating the appeals afresh in accordance with law. M.A No.s 55-59/SRT/2022 (a/o ITA Nos.1383-1384,1380,1392, 1390/AHD/2017 pg. 4 4. On the other hand, Ld. Senior Departmental Representative (Ld. Sr-DR) for the Revenue submits that grounds of MAs raised by assessee and the contents of present applications (MAs) are based on incorrect fact, even though, if it is accepted that the evidence of approval was filed by assessee, wherein the approval was granted by Additional Commissioner of Income-tax in all cases, who is competent to grant such approval. The law as stood during the relevant period was that Additional Commissioner of Income- tax was a competent authority to grant such approval. The Ld. Sr- DR for the Revenue invited our attention to the provision of sub- section (2) of section 151 at existed prior to 01.06.2015, wherein Joint Commissioner of Income-tax was competent to grant approval, if the Assessing Officer was below the rank of Joint Commissioner of Income-tax. The ld Sr DR for the revenue submits that in all cases, no assessments under section 143(3) or 147 of the Act was completed prior to reopening assessment, which is solely on the basis of information that assessee was beneficiary of accommodation entries. Thus, the case of assessee was clearly falls under section 151(2) of the Act and the approval was granted by Additional Commissioner, who was competent in all cases. The ld SR DR for the revenue submits that the Ld. AR for the assessee is relying on the amended provisions of section 151, which was substituted by Finance Act, 2015, and is not M.A No.s 55-59/SRT/2022 (a/o ITA Nos.1383-1384,1380,1392, 1390/AHD/2017 pg. 5 applicable on the facts of all present cases as notice under section 148 in all cases were issued prior to 01.06.2015. The ld Sr DR for the revenue prayed for dismissal of all the MAs. 5. We have considered the submissions of both the parties and have gone through the content of Miscellaneous Application carefully as well as our order dated 18.07.2022. On perusal of MA, we note that in the present MAs, the appellant / assessee contended that the evidence regarding approval of reopening assessment was not considered and that reopening assessment is based on incorrect satisfaction. We find that at the time of passing the consolidated order dated 18.07.2022, we recorded that there is no evidence to substantiate the submission about satisfaction by competent person. However, on perusal of records, we find merit in the submission of Ld. AR for the assessee that he has placed on record copy of approval given by Additional Commissioner of Income-tax, Range, Head, Surat and in all other cases such fact is recorded by assessing officer himself in the first para of his order. We find that such facts have escaped our attention at the time of passing order. Hence, we accepted that such fact was not considered at the time of passing the order dated 18.07.2022. 6. However, on appreciation of such evidence as available in case of Anil K Kumawat (supra) and the facts noted in all other cases that the approval was granted by Additional Commissioner, we are of M.A No.s 55-59/SRT/2022 (a/o ITA Nos.1383-1384,1380,1392, 1390/AHD/2017 pg. 6 the view that even such evidence is still not helpful to assessee as the approval was granted by a Range head i.e., Additional Commissioner of Income-tax, who was competent authority to grant such satisfaction prior to amendment in Section 151 of the Act with effect from 01.06.2015. The relevant provision of section 151 at stood prior to its substituting by Finance Act, 2015, w.e.f. 01.06.2015, were as under; “151. Sanction for issue of notice.-(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 Principal Chief Commissioner or Chief Commissioner or Principal 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 Principal Commissioner or Commissioner or the Principal Chief Commissioner or 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.” M.A No.s 55-59/SRT/2022 (a/o ITA Nos.1383-1384,1380,1392, 1390/AHD/2017 pg. 7 7. Thus, in view of above factual and statutory provisions, we do not find any merit on appreciation such evidence that approval was not granted by a competent officer. After considering such evidence of approval, we do not find any force in the submission raised by Ld. AR for the ae that approval was not granted by a competent person. This ground of assessee’s MA is dismissed. 8. In the result, assessee’s MA is dismissed. MA Nos. 56 to 59/SRT/2022 9. Considering the fact that we have dismissed the MA No.55/SRT/2022, and the assessees have raised similar contention in all remaining MA(s) No.56 to 59/SRT/2022, therefore, all the MA(s) filed by the assessee are dismissed with similar observation. 10. In combined result, all the MA(s) are dismissed. A copy of the instant common order be placed in the respective case file(s). Order pronounced on 19/05/2023 in the open court and result was placed on the Notice Board. Sd/- Sd/- S (Dr ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 19/05/2023 DKP, Outsourcing Sr.PS M.A No.s 55-59/SRT/2022 (a/o ITA Nos.1383-1384,1380,1392, 1390/AHD/2017 pg. 8 Copy to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR 6. Guard File By order // True Copy // Sr. Private Secretary /Private Secretary /Assistant Registrar, ITAT, Surat