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2016 (3) TMI 26 - PUNJAB AND HARYANA HIGH COURT

2016 (3) TMI 26 - PUNJAB AND HARYANA HIGH COURT - [2016] 382 ITR 409 - Validity of reopening of assessment - Sanction for issue of notice - sanction had to be taken from Chief CIT or CIT instead of Additional CIT - Held that:- In the present case, the first notice under section 148 dated 22.2.1994 was served on the assessee on 7.3.1994 in response to which the assessee filed his return on 19.3.1996. The AO received information about the assessee having received commission income of ₹ 2 lac .....

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the Assessing Officer when the second notice was issued. The second notice issued under section 148 dated 17.3.1997 was therefore valid.

As far as the objection of the assessee regarding absence of consent under section 151(1) proviso is concerned, it cannot be said that there was any assessment done in the case of the assessee pursuant to the first notice under section 148. Only an intimation under section 143(1)(a) was issued. The decisions referred to by the learned CIT(A) on this .....

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ure of income liable to tax. The CIT(A)'s direction to bring to tax this sum in the assessment year in which the assessee received these sums and also confirmed by ITAT was proper and calls for no interference - Decided against assessee - ITA No. 143 and 166 of 2005 (O&M) - Dated:- 13-1-2016 - MR. AJAY KUMAR MITTAL AND MRS. RAJ RAHUL GARG, JJ. FOR The Appellant : Mr. Sanjay Bansal, Sr. Advocate with Mr. B.M.Monga, Advocate For The Respondent : Mr. Tejinder K.Joshi, Advocate Ajay Kumar Mittal,J. .....

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ted from ITA No.143 of 2005. 2. ITA No.143 of 2005 has been preferred by the appellantassessee under section 260A of the Act against the order dated 29.9.2004, Annexure P.1 passed by the Income Tax Appellate Tribunal, Delhi Bench 'G' New Delhi (for brevity, the Tribunal ) in ITA No.2646/Del/2004 for the assessment year 1991-92, claiming following substantial questions of law:- i) Whether on the admitted factual position emerging from the material on record, the decision rendered by the T .....

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n 151(1) of the Income Tax Act, 1961, the Tribunal was justified in holding that proceedings initiated under Section 148/147 after a period of four years on an approval and sanction having been granted by the Additional Commissioner of Income Tax were valid? iv) Whether on the facts and in the circumstances of the case, the view taken by the Tribunal is contrary to the decision rendered by this Hon'ble High Court, being the jurisdictional High Court, rendered in the case of CIT vs. Rajesh Ta .....

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e assessee for the purpose of bringing to tax a sum of ₹ 73,132/- which he had received as interest from M/s Kevikon Agro Farming (P) Limited on the deposit of the sale consideration received on sale of his agricultural land. In response to this notice, the assessee filed his return on 19.3.1996. Intimation under section 143(1)(a) of the Act was issued on 22.3.1996. The Assessing Officer issued another notice under section 148 of the Act on 17.3.1997 for the purpose of bringing to tax a su .....

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der, the assessee filed appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. The assessee challenged the validity of the reassessment proceedings. According to the assessee, pursuant to the first notice issued under section 148 of the Act, intimation was issued by the Assessing Officer and this constituted assessment and therefore in the light of specific provisions of section 151(1) of the Act, no notice could be issued under section 148 of the Act unless the Chief Commissioner or C .....

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led appeal before the Tribunal. Vide order dated 29.9.2004, Annexure P.1, the Tribunal dismissed the appeal. In ITA No.163 of 2005, the assessee filed an application under section 254(2) of the Act before the Tribunal for rectification of the order dated 29.9.2004 which was declined vide order dated 15.2.2005 in the said petition. Hence the instant appeals by the assessee. 4. We have heard learned counsel for the parties. 5. The primary contention of learned counsel for the appellantassessee was .....

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ursuance to second notice under Section 147 of the Act on 17.3.1997 was non-est. On merits, the addition of ₹ 2 lakhs was assailed by arguing that only ₹ 1 lakh could be added as the property was jointly owned and the commission received was also for the entire property and the share of the assessee being 50%, only ₹ 1 lakh fell to his share. On the other hand, learned counsel for the revenue besides supporting the order of the Assessing Officer, CIT(A) and the Tribunal submitt .....

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ner or Deputy Commissioner, 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 : Provided that, after the expiry of four years from the end of the relevant assessment year, no such notice shall be issued unless the Chief Commissioner or 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 .....

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ner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice under section 148, need not issue such notice himself. 7. Section 151 of the Act deals with sanction for issue of notice of reassessment. From perusal of Section 151(1) of the Act, it would emerge:- (a) if an assessment has been made under section 143(3) or section 147 and four years have not expired from the end of the relevant assessment year, a notice under .....

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he Chief CIT or the CIT on the reasons recorded by the Assessing Officer aforesaid that it is a fit case for issue of such notice. Therefore, in other words, the Assessing Officer not below the rank of the Assistant CIT can issue a notice but before issuing the notice, the satisfaction of the CIT or the Chief CIT is necessarily to be obtained. 8. According to Section 151(2), no notice can be issued under Section 148 of the Act by an Assessing Officer who is below the rank of Joint Commissioner o .....

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er, (1997) 94 Taxman 124 (All) and (iii) CIT vs. KV Manakram & Co. (2000) 111 Taxman 439 Kerala. concluded that the processing of return under Section 143(1)(a) of the Act even in pursuance to notice under Section 147 of the Act did not result into an assessment. It may be noticed that the judgment of the Delhi High Court in Apogee International Limited's case (supra) was quoted with approval by the Apex Court in Assistant Commissioner of Income Tax vs. Rajesh Jhaveri Stock Brokers Pvt. .....

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the Assessing Officer did not assess or reassess the assessee's income on the basis of first return filed by him on 19.3.1996 instead issued intimation under Section 143(1)(a) of the Act on 22.3.1996. Only intimation under Section 143(1)(a) of the Act was issued which was not an assessment. Thus, no proceedings were pending before the Assessing officer when the second notice was issued on 17.3.1997 on the basis of information about commission income of ₹ 2 lacs received by the assessee .....

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first notice could be completed only upto 31.3.1996 in view of the provisions of Section 153(2) prescribing time limit for completion of assessment or reassessment proceedings. As on 31.3.1996, the Assessing Officer could not proceed to assess or reassess assessee's income on the basis of the first return filed by the assessee on 19.3.1996. Therefore, it could not be said that any proceedings were pending before the Assessing Officer when the second notice was issued. The second notice issu .....

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t. Therefore, the provision of Section 151(2) alone would apply to the present case. Therefore, consent under section 151(1) for issue of notice under section 148 has rightly held by the CIT(A) to be not necessary. Nothing could be shown that the aforesaid conclusion of the Tribunal was erroneous. 10. Examining the issue on merits relating to taxability of only 50% in the hands of the assessee, the same was negated with the following observations:- 9. What now remains for consideration is ground .....

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he assessee sold his lands to one M/s DLF. The sale was mediated through one Mr. CP Singh of M/s Pawan & Co. Pvt. Limited over and above the sale consideration received by the assessee from Mr. CP Singh on the following dates: On 31.3.1991 Rs.55,804/- On 22.7.1992 Rs.1,50,000/- Rs.2,05,804/- 11. The plea of the assessee was that this sum was commission which CP Singh paid to him from and out of the commission which he received from DLF. The plea of the assessee with regard to taxability of t .....

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. The CIT(A) rejected the contention of the assessee holding as follows:- I have carefully considered the facts and submissions made. I find no merit in the assessee's contention that the commission accrued on 17.11.1989 i.e. the day when the sale deed was executed. The sale deed does not mention anything about the commission payment to the assessee. The explanation that commission on sale of agricultural land was received as part of custom in the family cannot be believed as there is no cre .....

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