TMI Blog2022 (3) TMI 787X X X X Extracts X X X X X X X X Extracts X X X X ..... ed while recommending for issuance of notice are sufficient to infer in clear terms that the Joint Commissioner of Income Tax applied his mind on proposal sent to him by the Assessing Officer, recorded his satisfaction for issuance of notice under Section 148 - Hence, even if name of approving authority is mentioned to be 'Principal Commissioner of Income Tax', the same would not make the 'approval' itself invalid. The object of Section 151 of the Act of 1961 is that approval to be accorded by the Joint Commissioner of Income Tax (in the facts of case) and if Joint Commissioner approves the proceedings/ proposal sent by the Assessing Officer to be a fit case, then, in the opinion of this Court, the approval under Section 151 giving details of approving authority as Principal Commissioner of Income Tax in itself will not make the approval invalid - in case at hand, Joint Commissioner of Income Tax recorded satisfaction on the proposal of Assessing Officer by mentioning that it is a fit case for issuance of notice. In view of above facts of the case, second ground raised is also not tenable. Approval granted u/s 151 does not bear digital signature of authority, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m fit and proper in the facts and circumstances of the case. 2. Mr. S. Rajeshwar Rao, learned counsel for petitioner would submit that respondents have started proceedings of re- assessment of income tax returns submitted by petitioner for the assessment year 2017-18 without following the procedure established in this regard under the Act of 1961. Section 147 of the Act of 1961, as prevailing during relevant period, requires the Assessing Officer to record 'reasons to believe' for issuing notice under Section 148 of the Act of 1961. Perusal of notice Annexure P-1 issued under Section 148 of the Act of 1961 would reveal that there is no mention that authority had reason to believe for starting re-assessment process, hence notice issued to petitioner does not satisfy requirement of Section 147 of the Act of 1961, which is a pre-condition. In the impugned notice it is only mentioned that the assessee escaped assessment of income in returns submitted by him for the assessment year 2017-18, whereas the assessee in income-tax returns disclosed entire amount deposited in bank accounts that too within specified period i.e. from 9.11.2016 to 13.12.2016. Petitioner is having to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. ACIT reported in 2012 (3) TMI 266 and The Commissioner of Income Tax Central-4 vs. Aquatic Remedies Pvt. Ltd. reported in 2018 (8) TMI 135. Another ground raised by learned counsel for petitioner is that approval, as stated to have been granted to the Assessing Officer under Section 151 of the Act of 1961, does not contain signature of designated authority. He submits that even if it is computer generated approval in the Form then also it should bear 'digital signature' as appearing in the notice (Annexure P-1) under Section 148 of the Act of 1961. In absence of signature, approval under Section151 of the Act of 1961 cannot be said to be valid approval granted by the designated authority. In facts of present case, there is no valid approval of designated authority, hence petition deserves to be allowed. He contended that looking to multiplicity of litigations under the Act of 1961 in issuance of notice under Section 148, the High Court of Delhi had issued certain guidelines to the respondent Department in case of Sabh Infrastructure Ltd. v. Asstt. Commissioner of Income Tax reported in 2017 (9) TMI 1589, based upon which the Department had issued Standard Procedure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer, which was replied by Assessing Officer, along with copy of reasons recorded for opining to issue notice under Section 148 of the Act of 1961, which is also placed on record by petitioner from Page No.32 onwards of writ petition. A glance of Page No.32 of writ petition would show that after the chart showing different deposits in different banks, the Assessing Officer has mentioned that petitioner was asked to give documentary evidence and produce details in support of cash deposits made during demonetization period. Reply submitted by the petitioner was found unsatisfactory, which is also specifically mentioned. if income tax authority accepts income tax return/document without raising any question then it does not mean that at subsequent point of time, return/documents placed along with return cannot be revisited and assessee cannot be noticed. In support of aforementioned contention she places her reliance on judgment of Hon'ble Supreme Court in case of M/S. Phool Chand Bajrang Lal vs Income-Tax Officer reported in (1993) 4 SCC 77. With respect to submission of learned counsel for petitioner that approval as provided under Section 151 of the Act of 1961 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to link the procedure initiated by him with the proceedings of information received/ collected by other officers also. Here in this case, the DDIT issued summons under Section 131 of the Act of 1961 and when reply of petitioner was not found satisfactory, the DDIT forwarded the case to Assessing Officer. Thus, there is compliance of the provisions of 4th Paragraph of Standard Procedure dated 10.1.2018. Learned counsel submits that the word 'reasons to believe' as used under the Act of 1961 has to be considered in wider sense and in support of her submission, she places reliance on judgment of Hon'ble Supreme Court in case of Kalyanji Mavji Co. v. CIT reported in (1976) 1 SCC 985; Raymond Woolen Mills Ltd. vs. ITO, Centre Circle XI, Range Bombay ors reported in (2008) 14 SCC 218. She submits that in case of Kalyaji Mavji (supra) Hon'ble Supreme Court in Para-9 has elaborately dealt with issue as to what will be information received by Assessing Officer. She further contended that this Court while considering challenge to notice issued under Section 148 of the Act of 1961 held that scope of interference at the time of issuance of notice under Section 148 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because DIN Document Number is issued based on code provided to a particular officer. She places her reliance upon Instructions dated 4.3.2021 (Annexure R2 to 4/2) issued by Ministry of Finance, Govt. of India, New Delhi 6. I have heard learned counsel for the parties and perused the record. 7. So far as first submission of learned counsel for petitioner that before issuing notice under Section 148 of the Act of 1961 the Assessing Officer has material to record reasons to believe that income chargeable to tax escaped assessment for that year. Perusal of documents placed on record by petitioner as also respondents would show that on demand being made by petitioner, the Assessing Officer supplied copy of reasons recorded which led him to believe that income escaped assessment. While recording reasons, the Assessing Officer discussed dates and events as also proceedings drawn by the DDIT for issuance of summons under Section 131A of the Act of 1961 to the bank of petitioner. Further, summons under Section 131 of the Act of 1961 was also issued by the DDIT calling upon petitioner to produce evidence and relevant documents of all cash deposits made in four bank accounts during p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll also include true and correct state of the law derived from relevant judicial decisions either of the Income-tax authorities or other courts of law which decide income-tax matters. Where the ground on which the original assessment is based is held to be erroneous by a superior court in some other case, that will also amount to a fresh information which comes into existence subsequent to the original assessment. A subsequent Privy Council decision is also included in the word `information'. Thus it is very difficult to lay down any hard and fast rule. But this Court has in two leading cases laid down some objective tests and principles to determine the applicability of Section 34 (1) (b) of the Act which we shall now discuss. xxx xxx xxx An analysis of this case would clearly show that the information as contained in Section 34 (1) (b) must fulfil the following conditions: (1) The information may be derived from an external source concerning facts or particulars as to law relating to matter bearing on the assessment; (2) That the information must come after the previous or the original assessment was made. In fact the words in consequence of information ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nformation, Assessing Officer verified PAN details and recorded reasons to believe that cash deposit to the tune of ₹ 22,17,720/- remained unexplained, which falls under clause (b) of Explanation to Section 147 of the Act of 1961. In case of Phool Chand Bajrang Lal (supra) Hon'ble Supreme Court while considering validity of reassessment notice has observed thus:- From a combined review of the judgements of this Court, it follows that an Income-tax Officer acquires jurisdiction to reopen assessment under Section 147 (a) read with Section 148 of the Income Tax 1961 only if on the basis of specific, reliable and relevant information coming to his possession subsequently, he has reasons which he must record, to believe that by reason of omission or failure on the part of the assessee to make a true and full disclosure of all material facts necessary for his assessment during the concluded assessment proceedings, any part of his income, profit or gains chargeable to income tax has escaped assessment. He may start reassessment proceedings either because some fresh facts come to light which where not previously disclosed or some information with regard to the facts previous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. We are of the view that the court cannot strike down the reopening of the case in the facts of this case. It will be open to the assessee to prove that the assumption of facts made in the notice was erroneous. The assessee may also prove that no new facts came to the knowledge of the Income-tax Officer after completion of the assessment proceeding. We are not expressing any opinion on the merits of the case. The questions of fact and law are left open to be investigated and decided by the assessing authority. The appellant will be entitled to take all the points before the assessing authority. The appeals are dismissed. There will be no order as to costs. 11. In aforementioned ruling Hon'ble Supreme Court has held in categorical terms that at the stage of issuance of notice for reopening of assessment, the Court is only to see whether there was prima facie material on the basis of which department could reopen the case and not the sufficiency or correctness of material to be considered. 12. If the facts of present case are tested in light of aforementioned rulings of Hon'ble Supreme Court, it is clear that the DDIT issued summons under Section 131 of the Act of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 151 of the Act of 1961 giving details of approving authority as Principal Commissioner of Income Tax in itself will not make the approval invalid. Reliance on the judgment delivered in case of Ghanshyam K Khabrani (supra) placed by learned counsel for petitioner to support his contention that approval under Section 151 of the Act of 1961 is not in accordance with law, is of no help being distinguishable on facts. In aforementioned case, proposal forwarded by Assessing Officer to the Joint Commissioner of Income Tax, who only recorded gist and sought approval. There was no application of mind by the Joint Commissioner of Income Tax by recording his satisfaction as required under Section 151 of the Act of 1961. Provisions under Section 151 (2) of the Act of 1961 mandates the satisfaction of Joint Commissioner of Income Tax. In case at hand, Joint Commissioner of Income Tax recorded satisfaction on the proposal of Assessing Officer by mentioning that it is a fit case for issuance of notice. In view of above facts of the case, second ground raised is also not tenable. 14. Third submission of learned counsel for petitioner is that approval granted under Section 151 of the Act o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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