TMI Blog2020 (10) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... y conveyed the approval, therefore, we hold that the grant of extension by the Commissioner is beyond the powers enshrined under the statute. Accordingly, the assessment completed after the due date is held to be void-ab-initio. - Decided in favour of assessee. - ITA Nos.4897 to 4903/Del/2014, ITA Nos.5540 to 5546/Del/2014 - - - Dated:- 30-9-2020 - Ms. Sushma Chowla, VP And Sh. Anil Chaturvedi, AM For the Appellant : Sh. Rohit Jain, Adv., Ms. Meenal Goel, Adv. For the Respondent : Sh. Sanjay Goyal, CIT-DR ORDER PER SUSHMA CHOWLA, VP This bunch of cross appeals filed by the assessee as well as Revenue are against separate orders of CIT(A)-III, New Delhi, relating to assessment years 2002-03 to 2008-09 respectively against the order passed under section 153A/143(3) of the Income-tax Act, 1961 (in short the Act ). 2. This bunch of cross appeals relating to Assessment Years 2002-03 to 2008-09 were heard together and are being disposed of by this consolidated order for the sake of convenience. 3. The Ld. AR for the assessee, at the outset, pointed out that the jurisdictional issue raised in the present bunch of appeals needed to be adjudicated first. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer issued notice under section 153A of the Act on 24.12.2008. In response thereto, the assessee filed return of income on 20.02.2009. The case of the assessee was taken up for scrutiny and notice under section 143(2) of the Act was issued on 30.09.2009. Show-cause notice were issued by the Assessing Officer dated 27.11.2009 requisitioning the assessee as to why special audit under section 142(2A) of the Act should not be directed for Assessment Years 2002-03 to 2008-09. The assessee filed its objection to the same by letter dated 04.12.2009. The said objections raised by the assessee were rejected by the Assessing Officer vide letter dated 08.12.2009. On 09.12.2009, show-cause notice was issued by the Commissioner prior to grant of approval under section 142(2A) of the Act for Assessment Years 2002-03 to 2008-09. The assessee filed reply to the same and the Commissioner vide his order dated 15.12.2009 approved special audit for the aforesaid Assessment Years under section 142(2A) of the Act, to be completed within the period of 120 days. Directions for special audit thereafter were issued by the AO for the said assessment years vide letter dated 15.12.2009. Under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed that the issue stands covered in favour of the assessee. 8. The Ld. DR for the Revenue fairly stated that the facts of the case are identical to the facts of the M/s Soul Space Projects Ltd. However, he placed reliance on his written submission. He further referred to paras 8 to 11 of his written submissions which read as under:- 8. While arguing in Soul Space Projects Ltd., Ld. AR relied on the following decision in support of the argument that approval from higher incompetent authority is improper:- 1. CIT v. SPL s Siddhartha Ltd. : 345 ITR 223 (Del.) 2. Ghanshyam K. Khabrani v. ACIT : 346 ITR 443 (Bom.) 3. CIT v. Soyuz Insdustrial Resources Ltd. : [2015] 232 Taxman 414 (Del. HC) 4. Yum Restaurants Asia Pte Ltd. v. DDIT : 397 ITR 639 (Del.) MY SUBMISSION ON THE ABOVE It is humbly submitted that all these decisions are on the subject of reopening of assessment u/s 147 and the authority who should be satisfied for on the reasons recorded by the assessing officer. Therefore, these decisions are in respect of satisfaction for initiation of reassessment proceedings. None of the decision is related for extension of time period of audit of book ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdhandas Bhauii (Cited Supra) -- The issue was the power of commission vis-a vis the interference of the government. These facts are clearly distinguished in the present case. c) Anirudh Sinhji Jadeja (Cited Supra) -- The issue was the power of DSP for prior approval for recording information about commission of offence u/s Terrorist Disruptive Activities (Prevention) Act, 1987. The facts are clearly distinguishable. d) Maharaja Dharamander Prasad Singh Others. -- The issue was related to permission for development of land by private part under U.P. Urban Planning Development Act, 1973. These facts are not applicable in the present case. 11. OVERALL SUMMARY OF MY SUBMISSIONS: (i) Based upon the written submissions made above, it may kindly be seen that the statute provided the only condition to be satisfied for extending the time, is the satisfaction the Assessing Officer . (ii) The assessing officer in present case has applied his mind and found the case suitable for extension as can be seen from the letter of the assessing officer dated 11.02.2020. Therefore, conditions for extending the time period under the above proviso is met expect the grant of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment years 2002-03 to 2008-09 09.12.2009 Show-cause notice issued by CIT prior to grant of approval under section 142(2A) of the Act for assessment years 2002-03 to 2008- 09 14.12.2009 Reply to aforesaid show-cause notice filed by the assessee before the CIT 15.12.2009 CIT approved special audit for assessment years 2002-03 to 2008- 09 under section 142(2A) of the Act to be completed within a period of 120 days 15.12.2009 Direction for special audit by the assessing officer for assessment years 2002-03 to 2008-09 to be completed within 120 days. 31.12.2009 Normal limitation period of 21 months under section 153B of the Act for completion of assessment 25.03.2010 Request by special auditor for extension of time on the ground of alleged lack of cooperation by the assessee 13.04.2010 Letter issued by the assessing officer intimating/communicating that extension of 60 days has granted by CIT vide letter dated 12.04.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ara 11 at pages 10 to 14 of the order, vide para-12, reference was made to the information received from Assessing Officer during proceedings before Tribunal and the arguments with regard to grant of permission in connection with extension of the period for audit was reproduced and it reads as under:- 12. The information received by the revenue during the arguments with regard to the granting of permission in connection with the extension of the period for audit is as under: OFFICE OF THE ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-15, NEW DELHI Room No. 245, ARA Centre, E-2, Jhandewalan Extn., New Delhi - 110055. F. No. ACIT/CC-15/2019-20/1605 Dated: 11.02.2020 To The Commissioner of Income Tax(DR), G-Bench, ITAT, 7th Floor, Lok Nayak Bhawan, Khan Market, New Delhi. Sir, Subject: Second appeal in the case of ACIT Vs Soul Space Projects Ltd., ITA No.193/Del/2015 for A.Y.2007-08, 1849/Del/2015 for A.Y.2008-09 and 4352/Del/2015 for A.Y. 2009-10 - matter reg. Ref: F.No. CIT/DR/ITAT/G-Bench/2019-20/195 dated 27.01.2020. Kindly refer to the above not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnishing the audit report u/s 142(2A) in the case and also requested to the assessee to provide the requisite information immediately under information to the undersigned so the special audit may be completed in a smooth manner. 4. On perusal of relevant records, it is ascertained that the Assessing Officer has applied his mind in the letter dated 08.04.2010 therein he has given the reasons for extension for furnish the special audit report. Consequently, the Ld.CIT has considered the facts (application of mind of AO) and directed to the AO to convey the extension of 60 days for the purpose of furnishing the special audit u/s 142(2A). Therefore, it is clear that the extension of period u/s 142(2C) was granted by the AO after applying his mind, not by the Ld. CIT, Central-ll and the Ld. CIT, Central-ll has only directed to the AO to convey the extension of period to the Special Auditors. The above referred letters are also enclosed herewith for ready reference. 12. Further, reference was made to the letter of the DCIT, dated 13.04.2010 and the same was reproduced under para 13 and it reads as under:- 13. The order of the DCIT, Central Circle-17, which is an impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are, 1. The assessing officer has received the request from special auditor for extension of time to complete audit u/s 142(2A) which was account of delay on the part of the assessee. 2. The assessing officer was satisfied on the reason submitted by the special auditor and recommended for extension to CIT as there were other cases having inter-group transaction for special audit and extension was granted by CIT(C)-II, New Delhi. 3. CIT(C)-II, New Delhi has conveyed the extension. 4. The AO conveyed the granting of extension of 60 days by the CIT, Central-II to the assessee. 16. The Sec, 142 (2A) provides that the directions for special audit shall be given by the Assessing officer, with the previous approval of Chief Commissioner or Commissioner. In this case, there is no dispute that these directions have been given. Thus, the legislature clearly intended that initial direction shall be with the approval and after examination of the subject matter by the higher after prior approval of CIT, Central - II, New Delhi. Thereafter, proviso below Sec. 142 (2C) provides for the procedure for giving extension for completing the special audit task. It clearly prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e various authorities to implement the Income Tax Act stands clearly defined in the statute. For example, the power to approve the accounts audited u/s 142(2A) lies with CIT/PCIT/CCIT or PCCIT. The powers u/s 144A are to be exercised by the Joint Commissioner or Additional Commissioner. The powers u/s 251 are specific to the Commissioner (Appeals). Similarly, the powers u/s 263 and 264 are to be exercised by the PCIT/CIT. Further, in exercise of the powers conferred under clause (a) of subsection (2) of section 119 of Income-tax Act, 1961, Central Board of Direct Taxes, may direct that the Chief Commissioner of Income-tax and Director General of Income tax may reduce or waive interest charged under section 234A or section 234B. Further to mention, while levy of the penalty u/s 271AAB is the power of the Assessing Officer, the provisions u/s 274(2) mandates that the prior approval of the JCIT is required before levy of such penalty. Thus, we find that the statute has accorded implementation of the various provisions to specified authorities which cannot be interchanged. 20. A power which has been given to a specified authority has to be discharged only by him. Substit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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