TMI Blog2017 (6) TMI 1115X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/CHD/2014 - - - Dated:- 6-3-2017 - SHRI BHAVNESH SAINI , JUDICIAL MEMBER For The Appellant : Shri T.N.Singla For The Respondent : Shri S.K.Mittal,DR ORDER This appeal by assessee has been directed against the order of ld. CIT(Appeals), Central, Gurgaon dated 17.07.2014 for assessment year 2000-01. 2. Briefly the facts of the case are that notice under section 148 of Income Tax Act was issued in this case by the Assessing Officer on 27.03.2007 after duly recording reasons thereon. In response to notice under section 148, assessee filed return of income on 26.04.2007 declaring total income of ₹ 36,946/-. Apart from the above income, the assessee has also declared agriculture income at ₹ 17 lacs. The Assessing Officer issued questionnaire to the assessee and ultimately computed the income of the assessee at ₹ 7,92,169/-. The Assessing Officer made additions of ₹ 10,000/- on account of short declaration of salary income, addition of ₹ 18,555/- on account of non-declaration of income from house property and made addition of ₹ 7,30,000/- under the head 'income from other sources' as against claim of assessee of agric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Commissioner of Income Tax is necessary to be recorded on the reasons recorded by the Assessing Officer that it is a fit case for issue of notice under section 148 which in this case has not been done. He has submitted that since no satisfaction of JCIT on the reasons recorded have been done, therefore, issue of notice under section 148 of the Act itself is void and bad in law and is liable to be quashed. He has relied upon following decisions : i) Decision of Delhi High Court in the case of CIT Vs SPL S Suddhartha Ltd. ITA 836 of 2011 dated 14.09.2011. ii) Decision of Delhi High Court in the case of CIT Vs Soyuz Industrial Resources Ltd. ITA 158/2015 dated 27.02.2015. iii) Decision of Rajasthan High Court in the case of Dhadda Exports Vs ITO 377 ITR 347. iv) Decision of Bombay High Court in the case of Ghanshyam K. Khabrani Vs ACIT 346 ITR 443. 8(i) The ld. counsel for the assessee further referred to PB-68 which is form for recording the reasons for initiating proceedings under section 148 of the Act and for obtaining approval of Additional CIT and submitted that Addl. CIT has granted his satisfaction on the reasons recorded by Assessing Officer on 26.03.2008 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Minor's State Bank of India, Chautala(Karan) 555/- State Bank of India, Chautala(Parnav) 163/- Total- - 5,25,000/- 2,386/- 2,45,000/- 3,05,115 /- As per records of this office, no return of income for the assessment year 2000-01 appears to have been filed with this office by the assessee The deposits in above bank accounts amounting to ₹ 5,27,386/- and unaccounted for. I have, therefore, reasons to believe that income to the extent of ₹ 5,27,386/- has escaped assessment for the financial year 1999-2000 relevant to assessment year 2000-01. Hence, necessary approval for issue of notice u/s 148 for the asstt. Year 2000-01 may kindly b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not issue such notice himself.] 10(ii) In this case, admittedly the assessee did not file return of income originally under section 139(1) of the Act. Further, in the instant case, admittedly neither assessment under section 143(3) nor under section 147 was completed prior to issuance of notice under section 148 of the Act on dated 27.03.2007. The notice under section 148 of the Act was issued on 27.03.2007 i.e. four years beyond the end of the assessment year. Therefore, Section 151(2) of the Act is applicable to the facts and circumstances of the case. 11. Considering the provisions of Section 151(2) of Income Tax Act, the sanctioning authority as per the above provisions for issuance of notice under section 148 ought to have been the Joint Commissioner of Income Tax. However, on perusal of the material on record, it is clear that the sanction for issuance of notice under section 148 was granted by Commissioner of Income Tax, Chandigarh as is noted in the notice under section 148 of the Act dated 27.03.2007, copy of which is filed at page 1 of the Paper Book. The ld. counsel for the assessee also placed on record the approval granted by Addl. CIT for assessment year unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the records. From the records, we find that the Notings dated 12.3.2009 was prepared by the AO after recording his reasons, insofar as seeking approval is concerned. Relevant portion of the Note is as under: Since 4 years have been elapsed, the assessment record is being submitted for kind perusal and approval of the Commissioner of Income tax, Delhi-Ill, New Delhi according to section 151(1) of the IT Act, 1961 for issuance of notice u/s 148 of the IT. Act. Sd/- (D.D. YADAV) Asstt. Commissioner of Income tax Circle 9(1), New Delhi. Addl. CIT. Range - 9, New Delhi CIT may kindly accord sanction. CIT-III. Delhi Sd/-12.03.09 4. The aforesaid noting in the file does not reflect what learned counsel for the Revenue argued. In the first instance, it would be seen that the AO had specifically sought the approval of the Commissioner only. Therefore, it cannot be said that the Joint Commissioner/Additional Commissioner had granted the approval. Further, no doubt, the file was routed through Additional Commissioner. However, he also, in turn forwarded the same to the Commissioner by giving the following endorsement: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded should be independent and not borrowed or dictated satisfaction. Law in this regard is now sell-settled. In Sheo Narain Jaiswal Ors. Vs. IJO, 176 ITR 35 (Pat.), it was held: Where the Assessing Officer does not himself exercise his jurisdiction under Section 147 but merely acts at the behest fof any superior authority, it must be held that assumption of jurisdiction was bad for non-satisfaction of the condition precedent. 5. The Apex Court in the case of Anirudh Sinhji Karan Sinhji Jadeja Vs. State of Gujarat, (1995) 5 SCC 302 has held that if a statutory authority has been vested with jurisdiction, he has to exercise it according to its own discretion. If discretion is exercised under the direction or in compliance with some higher authorities instruction, then it will be a case of failure to exercise discretion altogether. 6. We are, therefore, of the opinion that the Tribunal has rightly decided the legal aspect, keeping in view well- established principles of law laid down in catena of judgments including that of the Supreme Court. 7. No question of law arises. This appeal is accordingly dismissed. 12(i) Hon'ble Delhi High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority would then be the Joint Commissioner; (ii) In the same fact situation, in case the notice is sought to be issued under Section 147 and the proviso to Section 147(1) i.e. beyond the extended four-year period, the competent authority for prior approval to the proposal would be the Principal Chief Commissioner, or Chief Commissioner or Principal Commissioner or Commissioner; (iii) In case the original assessment is completed other than i.e. otherwise than under Section 143(3) or during the course of re- assessment proceedings, competent authority would be the Joint Commissioner. 7. The ITAT examined the applicability of Section 292B based upon the decision in S.P.L's Siddhartha Ltd.(supra), which rejected the revenue's contention about its application holding that where a jurisdictional infirmity ITA 158/2015 Page 4 strikes at the root, invalidating the issuance of notice, Section 292B cannot rescue it. 8. The Revenue's argument seems plausible and even logical because the Commissioner or a Chief Commissioner is unarguably ranked higher in authority than a Joint Commissioner. Yet at the same time, this Court has to give effect to plain words ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end of the relevant assessment year, therefore, the satisfaction of the Joint Commissioner of Income Tax on the reasons recorded by the Assessing Officer that it is a fit case for issuing of such notice is required, however, in the present case, no satisfaction on such reasons recorded by the Assessing Officer have been obtained from the JCIT. In the notice under section 148, the approval from the Commissioner of Income Tax, Chandigarh is mentioned and in another satisfaction, the Addl. CIT accorded his approval on 26.03.2008 after issue of notice under section 148 which is wholly null and void. The Assessing Officer, therefore, did not have jurisdiction to issue notice under section 148 of the Act without obtaining the approval and sanction of the Jt. CIT. The above decisions squarely apply to the facts and circumstances of the case. The decision relied upon by ld. DR in the case of Rajesh Jhaveri Stock Brokers Pvt. Ltd. (supra) is distinguishable on facts and is not relevant to the point in issue. 14. Considering the above discussion and in the absence of any approval/sanction of JCIT on the reasons recorded by the Assessing Officer that it is a fit case for issue of such not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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