ALAUDDIN FAKIR,KOLKATA vs. ACIT, C.C.- IV, , KOLKATA

Assessment Year: 2007-2008 Alauddin Fakir 2. Ld. Counsel for the assessee drew our attention towards Interim Order of ITAT dated 4th April, 2022, which reads as under:- “04.04.2022 : The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals)-20, Kolkata dated 12th April, 2019 passed for A.Y. 2007-08. Though the assessee has taken five grounds of appeal, but his grievance revolves around two issues, namely (a) reopening of assessment was invalid in the eyes of law as well as bad in law; (b) ld. CIT(Appeals) has erred in confirming the addition of Rs.5,00,554/-. The ld. counsel for the assessee at the very outset submitted that scrutiny assessment was framed under section 143(3) on 30.12.2009. The Assessing Officer has reopened the assessment by issuance of a notice under section 148 of the Income Tax Act on 16.02.2012. According to him, as per section 151 before reopening an assessment, a prior approval at the end of ld. JCIT is to be obtained. In the present case, an approval has been given by the ld. Commissioner, which is not in consonance with law as contemplated in section 151. On the other hand, ld. D.R. has applied for adjournment.

In response to this order, Department has taken 6-7 opportunities but did not submit anything. On record, ld. Counsel for the assessee has placed a copy of the notice issued under section 148 of the Income Tax Act by the ld. Assessing Officer. A perusal of this notice would indicate that an approval was taken from ld. Commissioner of Income Tax, Central-1, Kolkata, whereas as per section Assessment Year: 2007-2008 Alauddin Fakir 151, the approval ought to have been taken from the ld. Joint Commissioner of Income Tax. For buttressing his contention, ld. Counsel for the assessee relied upon the judgment of the Hon’ble Bombay High Court in the case of Miranda Tools Pvt. Limited –vs.- Income Tax Officer rendered in Writ Petition No. 2240 of 2019. The Hon’ble High Court has considered an identical issue and the brief finding recorded by the Hon’ble Court reads as under:- “6. We will take up the ground of invalidity of sanction first for consideration as, if the Petitioner succeeds on this ground, it is not necessary to decide the other grounds raised

Two questions arise. Firstly, whether the communication dated 13 February 2019 accords a final approval. This question we answer in the negative. Though the words “I feel that this is a fit case” are used in the communication, the further part of the communication seeks an approval of the Chief Commissioner of Income Tax, Therefore, this opinion was subject to the approval of the Chief Commissioner of Income Tax. The communication dated 13 February 2019 cannot, therefore, be considered as a final sanction.

The next question arises is whether the sanction granted by the Chief Commissioner of Income Tax would fulfill the requirement of section 151. It is long been settled that when the statute mandates the satisfaction of a particular authority for the exercise of power then it has to be done in that manner only. Adopting this principle, the Division Benches of this Court in the case of Ghanshyam K. Khabrani v. Asst. CIV and CIT v. Aquatic Remedies P.Ltd.1 have held that sanction for issuance of reopening notice has to be obtained from the Authority mentioned in Section 151 and not from any other officer including a superior officer. In the present case the Chief Commissioner of Income tax is not the officer specified in section 151 of the Act. There is thus a breach of requirement of section 151(2) of the Act regarding sanction for issuance of notice under section 148 of the Act. Consequently, the impugned notice and the impugned order cannot be sustained in law. The Petitioner, therefore, is entitled to succeed.

Accordingly, the impugned notice dated 26 February 2019 and the impugned order dated 15 July 2019 are quashed and set aside. The petition is disposed of accordingly. Sd/- Sd/- NITIN JAMDAR, J. M.S. SANKLECHA, J.”