By C. N. Vaze, Shailesh Kamdar, Jagdish T. Punjabi, Bhadresh Doshi, Chartered Accountants
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S/s. 148, 151, 292B – U/s. 151 approval for issue of notice u/s. 148 has to be granted only by the Joint Commissioner or the Additional Commissioner. If the approval is not granted by the Joint Commissioner or the Additional Commissioner but is instead granted/taken from the Commissioner of Income-tax then notice for reassessment issued u/s. 148 would not be valid and assessment done pursuant to such notice would be liable to be quashed.
Facts:
For the assessment year 2004-05, the assessee filed a return declaring income of 31-08-2004. The return was processed u/s. 143(1) of the Act. Subsequently a notice was issued u/s. 148 of the Act. In response to this notice, the assessee filed a letter asking the Assessing Officer (AO) to treat the return filed u/s. 139 to be a return in response to the said notice. In an order passed u/s. 143(3) r.w.s. 147 of the Act, the AO made an addition of Rs. 10 lakh u/s. 68. In the order passed u/s. 143(3) r.w.s. 147 the AO mentioned that no notice u/s. 143(2) of the Act was served to the assessee within the statutory time limit during the original assessment proceedings. In the reassessment proceedings, the AO had mentioned that as a matter of precaution permission of CIT was obtained.
Aggrieved, the assessee preferred an appeal to CIT(A) who held that the reassessment to be null and void, since it was not in accordance with the provisions of the Act.
Aggrieved, the revenue preferred an appeal to the Tribunal.
Held:
The Tribunal noted that the Delhi High Court has in the case of CIT vs. SPL’s Siddhartha Ltd. (345 ITR 223)(Del) held that u/s. 151 of the Act it was only the Joint Commissioner or the Additional Commissioner who could grant the approval of the issue of notice u/s. 148 of the Act. The court has further held that if the approval was not granted by the Joint Commissioner or the Additional Commissioner and instead taken from Commissioner of Income-tax, then the same was not an irregularity curable u/s. 292B of the Act and consequently notice issued u/s. 148 was not valid.
Following this decision of the Delhi High Court, the Tribunal decided the issue in favor of the assessee and held that the reopening of assessment was not in accordance with law and was liable to be quashed.
The appeal filed by revenue was dismissed.
