SASWATI DAS V. A.C. OF INCOME TAX

WP(C)/7618/2009

AI Insights

In this writ petition, Smt. Saswati Das challenged a notice issued by the Assistant Commissioner of Income Tax, Bhubaneswar, under Section 148 of the Income Tax Act, 1961, which was approved by the Additional Commissioner. The petitioner argued that the notice was issued in contravention of Section 151(1) of the Act, which requires approval from a higher authority, specifically the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner, or Commissioner, and not from the Additional Commissioner. The court examined the legal provisions and precedents cited by both parties and concluded that the Additional Commissioner lacked the authority to approve the notice, leading to its quashing.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 748336 (HC-CUTTACK)
• Appeal Type: Others
• Pronouncement Date: 20-11-2019
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income-Tax \\u2013v- Kelvinator of India Ltd. & another, Ghanshyam K. Khabrani \\u2013v- Assistant Commissioner of Income-Tax and others, Commissioner of Income-Tax \\u2013v- SPL's Siddhartha Ltd., Commissioner of Income-Tax \\u2013v- Aquatic Remedies P. Ltd., Ramballabh Gupta \\u2013v- Assistant Commissioner of Income- Tax and others
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: T K SATAPATHY
• Assessee Lawyers: SIDDHARTHA RAY; S DAY
• Keywords: Assessment; Income Tax; Legal Competence; Notice; Quashed
• Section: 148; 143(3); 153A; 151(1)

Judgement Text

" HIGH COURT OF ORISSA: CUTTACK W.P.(C) NO. 7618 OF 2009 In the matter of an application under Articles 226 and 227 of Constitution of India. Smt. Saswati Das …… Petitioner -Versus- Assistant Commissioner of Income Tax, Circle-1(2)-cum-Assessing Officer, Bhubaneswar and another …… Opp. Parties For Petitioner : M/s. Siddhartha Ray & S. Day For Opp. Parties : Mr. T.K. Satapathy, Senior Standing Counsel ------------------------------------------ Date of Hearing & Judgment: 20.11.2019 ----------------------------------------- P R E S E N T: THE HONOURABLE THE CHIEF JUSTICE SHRI K.S. JHAVERI A N D THE HONOURABLE SHRI JUSTICE K.R. MOHAPATRA --------------------------------------------------------------------------------------------------------- K.S. JHAVERI, C.J. By way of this writ petition, the petitioner has challenged the notice dated 27.03.2009 (Annexure-1) issued by the Assistant Commissioner of Income Tax, Bhubaneswar under Section 148 of the Income Tax Act, 1961 (for short ‘the Act’) after obtaining necessary approval of the Additional Commissioner of Income Tax. 2 3. Mr. Ray, learned counsel for the petitioner contended that notice issued by the Assistant Commissioner of Income Tax is in contravention of Section 151 (1) of the Act, which reads as under: “151. Sanction for issue of notice.-(1) No notice shall be i`ssued under section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice.” 4. It is further contended that no satisfaction is recorded by the competent authority as required under Section 151 (1) of the Act, namely, either Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. The authority has taken permission of the Additional Commissioner, who is not competent under Section 151(1) of the Act to record such satisfaction. ‘Joint Commissioner’ is defined under sub- section 28-C of Section 2 of the Act, which reads as under: “28-C. “Joint Commissioner” means a person appointed to be a Joint Commissioner of Income Tax or an Additional Commissioner of Income Tax under sub-section (1) of section 117.” Therefore, the Additional Commissioner of Income Tax is not in the rank of Commissioner and recording of satisfaction by him in the impugned notice is in clear contravention of Section 151 (1) of the Act. 5. In support of his contention, Mr. Ray, learned counsel for the petitioner also relied upon various decisions in the cases 3 of Commissioner of Income-Tax –v- Kelvinator of India Ltd. & another, reported in (2010) 320 ITR 561 (SC), Ghanshyam K. Khabrani –v- Assistant Commissioner of Income-Tax and others, reported in (2012) 346 ITR 443 (Bom), Commissioner of Income-Tax –v- SPL’s Siddhartha Ltd., reported in (2012) 345 ITR 223 (Delhi), Commissioner of Income-Tax –v- Aquatic Remedies P. Ltd., reported in (2018) 406 ITR 545 (Bom) and Ramballabh Gupta –v- Assistant Commissioner of Income- Tax and others, reported in (2007) 288 ITR 347 (MP). 6. Mr. Satpathy, learned counsel for the opposite parties tried to justify the impugned notice by relying upon the averments in the counter affidavit which has been filed by the Department pursuant to the notice issued by this Court, wherein it has been stated at paragraph-9 as under: “9. That in reply to the averments in Para-8 & 8.1 and it is humbly submitted that in this case a search assessment u/s. 153A/143(3) of the I.T. Act, 1961, was completed on 31.12.2007 on a total assessed income of Rs.22,91,170/-. The said order was challenged by the assessee before the Ld. CIT(A), BBSR. The Ld. CIT(A), Bhubaneswar vide order passed in ITA No. 0002/2010-11 dated 18.10.2011 has annulled the assessment. Once the original assessment u/s. 153A is annulled, there is no bar to use the findings of the search to initiated proceeding u/s. 147 of the I.T. Act, 1961. The approval of the designated authority before issuance of notice u/s. 148 of the Income Tax Act, 1961, that in the case of the assessee, due approval as required u/s. 151(2) of the Income Tax Act, 1961 which was taken from the Additional Commissioner of Income Tax, Range- 1, Bhubaneswar. Since the regular assessment made u/s. 153A was annulled by the Ld. CIT (A), Bhubaneswar vide order passed in ITA No. 4 0002/2010-11 dated 18.10.2011, it was not required to take approval u/s. 151(1) of the Income Tax Act from the Commissioner or the Principal Commissioner of Income Tax. Therefore, the approval with the rank of Additional Commissioner of Income Tax is legal and within the jurisdiction.” 7. Admittedly, the impugned notice under Section 148 of the Act was issued in respect of Assessment Year 2002-03, which is clearly after four years from the end of the relevant assessment year. 8. In our considered opinion, the contention of learned counsel for the parties is not acceptable. The Additional Commissioner is not equivalent to the rank of Commissioner or any other designation as defined under Section 151 (1) of the Act. Therefore, the impugned notice (Annexure-1), which has been issued to the petitioner, is bad in law and is required to be quashed and the same is quashed. Rule is made absolute to the aforesaid extent. 9. This writ petition deserves to be allowed and the same is allowed. ……..………………… K.S. JHAVERI (CHIEF JUSTICE) K.R. Mohapatra, J. I agree ……..…………………… K.R. MOHAPATRA (JUDGE) Orissa High Court, Cuttack. Dated the 20th November, 2019/bks/jm "