TMI Blog2017 (9) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellant : Ms. Grishma Soni, AR For The Respondent : Shri Deepak Sutaria, Sr.DR ORDER PER PRADIP KUMAR KEDIA - AM: The captioned appeal by the Assessee is directed against the order of the Commissioner of Income Tax(Appeals)-Gandhinagar, [CIT(A) in short] dated 01/10/2014 for the Assessment Year (AY) 2005-06 arising as a result of assessment order under s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) dated 29/12/2011. 2. The assessee has filed grounds of appeal wherein the assessee has inter-alia challenged the assumption of jurisdiction under s.147 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) without applying with the provisions of section 147 r.w.s.151 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of four years from the end of the relevant AY 2005-06, the competent authority for obtaining such approval is Jt.CIT/Addl.CIT in distinction to the Commissioner even while he commands superior authority. Thus, in view of the wrong approval, the notice under s.148 of the Act is vitiated and consequently the entire re-assessment order is null and void. 4.1. The Ld.AR submitted that the accord of wrong approval will vitiate the assumption of jurisdiction under s.147 of the Act notwithstanding the fact that authorities superior to the competent authority designated for such approval has actually endorsed the action of the AO. It was stated that the identical issue has been dealt with in favour of assessee by the decision of the Coordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m Income-tax. The return of income filed has been processed u/s. 143(1) of the I.T. Act on 29.12.2005. An intimation dt. 16/03/2011 was received from Investigation Wing, Ahmedabad on 21/03/2011 giving details of information regarding beneficiaries of Mahasagar Securities Pvt. Ltd. (now known as Alang Securities Pvt. Ltd.) wherein details of group share scam was elaborated. From the details received, it is observed that search and seizure action 132 of the I.T. Act was undertaken in the case of M/s.Mahasagar Securities Pvt.Ltd. by the DDIT (Investigation), Unit-l(4), Mumbai on 25/11/2009. The search led to detailed investigation regarding transactions taken in the bank accounts of the concerned company and its sister concerns i.e. Gold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come has escaped assessment to the extent stated above. Proposal was sent for reopening of the assessment and the CIT, Gandhinagar vide letter No.CIT/GNR/148/HBS/2010-11 dated 30-3-2011 approved action U/s. 147 of the I T Act. Accordingly assessment has reopened U/s. 147 of the I T Act. 6. A bare reading of the aforesaid reasons recorded gives an unmistakable impression that the AO has proceeded on a wrongful belief of the case covered by first proviso to section 147 of the Act. In the absence of any assessment framed under s.143(3) of the Act, the assessment is not governed by first proviso to S.147. The AO also relied upon the satisfaction formulated by the CIT concerned under s.151 of the Act for the purposes of issuance of noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to assist the AO and have to dig out the old records for this purpose. Thus, the superior authority cannot grant requisite sanction in a light hearted manner and is duty bound to apply its mind before allowing the AO to proceed under s.147/148 of the Act. The act of sanction under s.151 without application of mind to issue notice under s.148 of the Act is bad in law. When reasons recorded as well as the approval obtained are read in combined manner, the conclusion is inescapable that the action of the AO is bad in law. Thus, jurisdiction usurped by the AO under s.147 is unsustainable in law. Consequently, the reassessment made pursuant thereto is devoid of legal sanction. Accordingly, we find merit in the preliminary objection raised b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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