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2015 (6) TMI 89 - ITAT MUMBAI

2015 (6) TMI 89 - ITAT MUMBAI - TMI - Reopening of assessment - jurisdiction of the Officer for re-opening the assessment - Held that:- The notice was issued not in pursuant to this letter of the Addl. Commissioner but the notice was issued pursuant to the approval given by the CommissionerConsidering the factual matrix of the case in hand, in the light of the judicial decisions the sanction for issue of notice is not as per the provisions of the law. Thus we hold that the order made under secti .....

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nd the Revenue against the very same order of the Ld. CIT(A)-38, Mumbai dated 20/12/2013 pertaining to assessment year 2004-05. Both these appeals were heard together and they are disposed of by this common order for the sake of convenience. 2.The assessee has raised three substantive grounds of appeal. With ground No.1 the assessee has challenged jurisdiction of the Officer for re-opening the assessment under section 143(3) r.w.s 147 of the Income Tax Act, 1961 (the Act). Ld. Counsel for the as .....

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ion from the appropriate authorities as per provisions of the law and, therefore, no infirmity in the issue of notice under section 148 of the Act. 4.We have heard the rival submissions. We have carefully perused the orders of the authorities below and the documentary evidences brought on record and referred to during the course of hearing. 4.1 The assessee is a company engaged in the business of trading in pharmaceutical products. A search operation under section 132 of the Act was conducted on .....

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and validity of this notice under section 148 of the Act claiming that it has been issued in violation of the relevant provisions of the Act without proper approval from the appropriate authority. 4.2 Section 151 of the Act is relevant provision for the sanction for issue of notice under section 148 of the Act. Section 151 read as under: 151. (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 i .....

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r] 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 24[Joint] Commissioner, after the expiry of four years from the end of the relevant assessment year, unless the 24[Joint] Commissioner is satisfied, on the reasons recorded by such Assessing Officer, t .....

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t is clearly mentioned that the sanctioning authority shall be Joint Commissioner. In the case in hand, as per the copy of the approval placed at page 115 of the paper book, which is a letter by the Dy.CIT (HQ) to the Addl.CIT (Central), Range 10. With this letter it has been stated that the CIT (Central)-IV, Mumbai had accorded his approval under section 151(1) of the Act for issue of notice under section 148 of the Act in the case of Aquatic Remedies P. Ltd. for assessment year 2004-05. Copy o .....

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of assessment. It is the say of the Ld. DR that proper sanction has been taken from the Addl. Commissioner/Joint Commissioner as per the provisions of the law. 4.4 We do not find any substance in this submission of Ld. DR. The notice was issued not in pursuant to this letter of the Addl. Commissioner but the notice was issued pursuant to the approval given by the Commissioner. An identical issue was considered by the Hon ble High Court of Bombay in Writ Petition No.1246 of 2012 in the case of Gh .....

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notice can be issued under Section 148 by an Assessing officer who is below the rank of Joint Commissioner after the expiry of 4 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. The expression Joint Commissioner is defined in Section 2(28C) to mean a person appointed to be a Joint Commissioner of Income Tax or an Additional Commissioner of Income T .....

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f approved. On this a communication was issued on 29 March 2011 from the office of the CIT (1) conveying approval to the proposal submitted by the Assessing officer. There is merit in the contention raised on behalf of the Assessee that the requirement of Section 151(2) could have only been fulfilled by the satisfaction of the Joint Commissioner that this is a fit case for the issuance of a notice under Section 148. Section 151(2) mandates that the satisfaction has to be of the Joint Commissione .....

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here under which a power to be exercised by an officer can be exercised by a superior officer. When the statute mandates the satisfaction of a particular functionary for the exercise of a power, the satisfaction must be of that authority. Where a statute requires something to be done in a particular manner, it has to be done in that manner. In a similar situation the Delhi High Court in Commissioner of Income Tax Vs. SPL S Siddhartha Ltd. (ITA No.836 of 2011 decided on 14 September 2011) held t .....

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nsidered by the Hon ble Bombay High Court (supra). Following observations of the Hon ble Delhi High Court are worth mentioning. 7. Section 116 of the Act also defines the Income Tax Authorities as different and distinct Authorities. Such different and distinct authorities have to exercise their powers in accordance with law as per the powers given to them in specified circumstances. If powers conferred on a particular authority are arrogated by other authority without mandate of law, it will cre .....

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Bihar Vs. J.AC. Saldanna & Ors. AIR (1980) SC 326. (iii) State of Gujarat Vs. Shantilal Mangaldas, AIR (1969) SCN 634. Thus, if authority is given expressly by affirmative words upon a defined condition, the expression of that condition excludes the doing of the Act authorised under other circumstances than those as defined. It Es also established principle of law that if a particular authority has been designated to record his/her satisfaction on any particular issue, then it is that autho .....

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