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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: SHRI RAJPAL YADAV, VICE-Shri Omprakash Kanayalal Shah
(Applicant) (Responent) : Shrio P.F. Jain, AR Assessee by Revenue by : Shri R.R.Makwana, Sr.DR सुनवाई क� तार�ख/Date of Hearing : 24/05/2021 घोषणा क� तार�ख /Date of Pronouncement: 04/06/2021 आदेश/O R D E R Assessee is in appeal before the Tribunal against order of the ld.CIT(A)-6, Ahmedabad passed for the Asstt.Year 2010-11.
In the first ground of appeal, the assessee has pleaded as under:
1. The ld.CIT(A) has erred in law and facts in upholding the assessment order passed u/s.143(3) r.w.s. 147 inasmuch as that the reassessment proceedings initiated against the assessee are invalid, void ab-initio without jurisdiction.
Brief facts of the case are that the AO has issued a notice under section 148 of the Income Tax Act, 1961. According to him, this notice was issued on 30.3.2017 which was served upon the assessee. In response to the notice, the assessee has filed return of income on 23.9.2017 declaring total income of Rs.94,010/-. The ld.AO thereafter
20.12.2017 under section 143(3) r.w.s. section 147 of the Income Tax Act, 1961. He determined taxable income of the assessee at Rs.26,37,960/-. The ld.AO has made addition of Rs.25,43,950/- on account of unexplained cash deposit in the bank account. The appeal to the CIT(A) did not bring any relief to the assessee.
The ld.counsel for the assessee while impugning order of the Revenue authorities contended that notice under section 148 was issued to the assessee after recording reasons for reopening the assessment. Copy of such reason is available on page no.4 of the paper book. He drew our attention towards page no.1 of the paper book wherein copy of the notice under section 148 is being placed. According to him, this notice is dated 29.3.2017. Since the assessment involved herein is A.Y.2010-11 and the AO wants to issue notice after expiry of four years, therefore, for reopening assessment beyond four years from the end of the assessment year, a prior approval is required under section 151(1)/151(2) of the Act. The AO sought this approval, and the copy of proforma vide which this approval has been given placed at page no.2 and 3 of the paper book. The approval was granted by the Pr.CIT-6, Ahmedabad on 30.03.2017 and notice under section 148 was issued on 29.3.2017 i.e. one day prior to the approval granted by the competent authority. Thus, according to the ld.counsel for the assessee, notice under section 148 in itself is bad in law. He relied upon order of the Division Bench of the ITAT, Surat Bench in which was authored by me while sitting in the Division Bench. He placed on record copy of the Tribunal’s order. 2
On the other hand, the ld.DR contended that notice must have been issued on 30th March 2017. The proforma is printed one, where the AO failed to square off the date. Otherwise, there is no irregularity.
8. I have duly considered rival contentions and gone through the record carefully. Copy of the notice, and approval from the Pr.CIT-6, Ahmedabad read as under: “Office of the INCOME-TAX OFFICER, WARD-6(1)(3), Room No. 104, 1st Floor, Narayan Chambers, Nr. Nehru Bridge, Ahmedabad-380009 (Ph) 079-2657 6721 Notice Under Section 148 of the Income-Tax Act, 1961. Date: 29.03.2017 To Omprakash Kanayalal Shah 1226/5, Dahelawali Khadki, Shahpur, Ahmedabad - 380004 A.Y. 2010-11 PAN: AEAPS2498J Whereas I have reason to believe that your income chargeable to tax tor the Assessment Year 2010-11 has escaped assessment within the meaning of Section 147 of the Income-Tax Act, 1961. I, therefore, propose to assess the income for the Assessment Year 2010-11 and I hereby require you to deliver to me within 30 days from the date of service of this notice, a return in the prescribed form of your income for the Assessment Year 2010-11 in respect of which you are assessable for the said Assessment Year.
Sd/- (RANJIT SHAH) Income-Tax Officer, Ward-6(l)(3), Ahmedabad.
Form for recording the reasons for initiating proceedings under section 148 and for obtaining the approval of the Pr.Commissioner of Income-Tax-6, Ahmedabad.
Name and Address of the assessee Omprakash Kanayalal Shah 1226/5, Dahelawali Khadki, Shahpur, Ahmedabad - 380004 2 Permanent Account No. AEAPS2498J 3 Status Individual 4 Dist/ Circle/ Range Ward-6(l)(3), Ahmedabad.
5 A.Y. in respect of which it 2010-11 is proposed to issue Notice u/s. 148 6 If assessment already N.A. completed, mentioned order .under which assessment completed with date of order 7 The quantum of income which Rs.25,43,950/- has escaped assessment 8 Whether the provisions of Section Explanation 2 (a) to Sec. 14 7 147 (a) or 147(b) are applicable for both the sections.
9 Whether the assessment is Yes proposed to be made for the first time. If the reply is in the affirmative, please state- No (a) Whether any voluntary return had already been filed. (b)If so. The date of filing the - said return.
If the answer to Item 8 is in the negative, Please state, (a) The income regularly NA assessed whether it is a case of under assessment, assessment at too low rate, assessment which has been made the subject of excessive relief or allowing of excessive loss or depreciation.
11 Whether the provisions of section 150(1) are applicable. If the reply is in the affirmative N.A. 4 the releant facts may be stated against Item No.11 and it may also be brought out that the provision of section 150(2) would not stand in the way of initiating proceedings u/s.147 12. Reasons for the belief that As per Annexure “A”. income has escaped assessment.
Date : 28.03.2017 Sd/- (Ranjit Shah) Income-Tax Officer Ward-6(1)(3), Ahmedabad.
Whether the Addl.CIT is Yes, I am satisfied that this is fit case for satisfied on the reasons the issue of notice u/s.148 of the I.T.Act. recorded by the ITO that it is a fit case for the issue of notice u/s.148 of the I.T.Act. Sd/- Date: 29.03.2017 (P.S.Choudhary) Addl.Commissioner of Income-Tax Range-6(1), Ahmedabad.
Whether the Pr.CIT is satisfied Yes, I am satisfied on the reasons recorded by the ITO that it is a fit case for the issue of notice u/s.148 of the I.T.Act. Date: 30.03.2017 Sd/- (Ajai Das Mehrotra) Pr.Commississioner of Income-tax-6 Ahmedabad.”
A perusal of the above would indicate that approval under section 151(1) has been obtained by the ld.AO on 30.3.2017, but he has issued the notice on 29.3.2017. On that date he was not empowered to issue such notice. Therefore, the notice is without jurisdiction and on this very foundation, the reassessment order is not sustainable. An identical issue was considered by the ITAT, Surat Bench in the case of ITO Vs. Shri Ashok Jain, in order dated 14.11.2018. The discussion made by the Tribunal reads as under:
4. With the assistance of the ld.representatives, we have gone through the record carefully. Section 151 of the Income Tax Act, 1961 contemplates that no notice under section 148 shall be issued by the Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless necessary approval from Commissioner or competent authority is obtained. No doubt in the present case, the ld.AO has applied for such approval which was granted on 29.3.2017, but before grant of approval, the ld.AO has already issued notice on 28.3.2014 which is without any jurisdiction. He can issue notice only after getting approval. Thus, the ld.CIT(A) has rightly quashed the assessment because the very foundation for issuance of notice under section 148 is the approval from the competent authority, i.e. Commissioner of Income Tax, and in the absence of such, such notice is void ab initio. Considering the above, we do not find any merit in this appeal of the Revenue. It is dismissed.
In the light of the above order of the Tribunal, the facts in the present case on hand being identical, for the reasons stated hereinabove, I hold that the very action of the ld.AO in initiating the issuance of notice under section 148 is unsustainable and outside the jurisdiction, and therefore, I quash the impugned order passed under section 143(3) r.w.s.
Since I quash the reassessment order, all other issues raised in the grounds of appeal become infructuous and do not call for separate adjudication.
In the result, appeal of the assessee is allowed. Order pronounced in the Court on 4th June, 2021 at Ahmedabad.