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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’ NEW DLEHI
Before: SHRI C.M. GARG
This appeal filed by the assessee is directed against the order dated 12.07.2016 passed by ld. CIT(A)-33, New Delhi for the assessment year 1998-99 on the following grounds : “1. 1) The order of the learned CIT (Appeal) is bad in law and on the facts of the case.
2) That once the appeal is filed before the Honorable ITAT, the learned CIT (Appeal) has no power to enhance the income in the remand proceeding. This is because the order of the learned Assessing Officer has already merged with the original order of first appellate authority.
3) That the learned CIT (Appeal) has to review the addition made in the original appeal order and not to go beyond that jurisdiction. The direction by the Honorable ITAT is limited to the ground of appeals raised in second appeal.
4) That the learned CIT(Appeal) failed to consider the request of the assessee to call for the record relating to the reason recorded by the learned Assessing officer for the issue of notice u/s 148 of The Income Tax Act,1961.
5) That notice u/s 148 of The Income Tax Act, 1961. Dated 30.03.2005 was issued in the name of Harsharan Singh and not in the name of assessee. As such the proceedings against the assessee were invalid. 6) a)That all the particulars of the income were declared before the learned assessing officer including sale of jewellery under reference during the assessment proceeding. There was no escapement of any Income. It was merely a change of opinion. b) That the notice issued under section 148 was beyond the period of limitations as per section 149 of The Income Tax Act, 1961.
7) That the assessee had made declaration as per VDS of the Income Tax Act, 1961 and paid due taxes thereon. The jewellery under reference were sold out of the declared items. The same items cannot be taxed twice.
8) The assumption of learned CIT (Appeal) (Parall.5) that the assessee has not disclosed the sale of jewellery in the original return is contrary to the facts of the case. No inaccurate particulars of income were furnished. The details of jewellery sale were submitted at the time of original assessment. As such time limitation of 4 years is applicable for the issue of notice u/s 148 of The Income Tax Act, 1961.
9) The contention of the learned assessing officer that the details of items of jewellery sold were not produced to co-ordinate with VDS certificate is not correct. The computation of income had the full details. Further the learned assessing officer had in his possession copy of bill no. 3559 dated 25.03.1998 for Rs. 327800/-.
10) That M/S Bishan Chand Mukesh Kumar were registered with the Sale Tax department under registration No LC/16/175815/09/94 and has been filling sale tax returns regularly along with the payments of tax due.
11) Further items declared were mentioned in the VDS certificate and valuation report. There was no failure on the behalf of the assessee to produce any required documents. No additional evidence was produced before the learned CIT (Appeal).
12) That the assessee craves leave to add, amend or withdraw any ground of appeal at the time or before the hearing of appeal.”
Learned counsel for the assessee submitted that the reopening of assessment u/s. 147 of the Income-tax Act, 1961 (“the Act” for short) and issuance of notice u/s. 148 of the Act is not only barred by limitation as per section 149 of the Act, but there was no approval of competent authority u/s. 151 of the Act. Therefore, the impugned notice and all subsequent assessment and first appellate order may kindly be quashed.
Ld. Counsel of the assessee took us through the assessment order and submitted that there is no mentioning in the assessment order dated 31.10.2005 regarding approval of competent authority u/s. 151 of the Act before issuing notice u/s. 148 of the Act. Therefore, it has to be presumed that the reopening has been made and notice u/s. 148 of the Act has been issued without obtaining approval u/s. 151 of the Act beyond prescribed time limit.
On being asked by the Bench, ld. Sr. DR could not show us any copy of satisfaction note as well as approval u/s. 151 of the Act obtained by the Assessing Officer before issuing notice u/s. 148 of the Act. On the copy of notice u/s. 148 of the Act dated 30.03.2005 (page 42 & 43 of the paper book), it is clear that in the relevant column there is no mentioning of necessary satisfaction/approval prior to issuing notice to the assessee u/s. 148 of the Act. From the copy of the letter submitted before the Income-tax Officer dated 28.04.2005 (page 44 of the paper book), it is also clear that the assessee requested the Assessing Officer to provide particulars of income that have escaped assessment, if any, and requested to intimate the same to him but the ld. Sr. DR despite having complete assessment record in his hands, could not show us any copy of satisfaction note and approval u/s. 151 of the Act to substantiate that prior to initiation of proceedings u/s. 147 and issuance of notice u/s. 148 of the Act, the Assessing Officer recorded proper and valid satisfaction and obtained approval from the competent authority u/s. 151 of the Act. Recording satisfaction and approval u/s. 151 of the Act is a mandatory condition for reopening of assessment u/s. 147 and issuing notice u/s. 148 of the Act, which has not been complied by the authorities below in the present case. Therefore, legal ground of the assessee is allowed and notice u/s. 148 and reassessment order u/s. 143(3)/147 of the Act are hereby quashed. Accordingly, the appeal of the assessee is allowed on legal ground. 5. Since, we have allowed the appeal of the assessee on legal ground, therefore, other grounds of assessee on merits become academic and I am not adjudicating the same, as having become infructuous. 6. In the result, appeal of the assessee is allowed. Order pronounced in the open court on 04/05/2022. Sd/- (C.M. GARG) JUDICIAL MEMBER Dated: 04/05/2022 ‘aks’