M/S. MOHIT DOLATRAI PATEL,,BHAVNAGAR vs. THE DCIT, CIRCLE-2, BHAVNAGAR

Brief facts in the case of Shri Mohit Dalatrai Patel are that the assessee has filed his return of income electronically on 12.9.2009 declaring total income at Rs.7,39,730/-. This return was processed under section 143(1) of the Income Tax Act on returned income. The assessment was reopened by issuance of notice under section 148 on 29.3.2016. Thereafter, the ld.AO has passed the impugned order on 21.12.2016. In the case of Shri Pankaj Nagindas Bhayani return was filed electronically on 22.9.2009 declaring total income at Rs.29,05,520/-. An assessment order was passed under section 143(3) on 30.11.2011. The AO thereafter reopened the assessment and issued notice under section 148 of the Act on 29.3.2016. The ld.counsel for the assessee at the very outset contended that notice under section 148 of the Act was issued upon both the assessees after expiry of four years from the end of the relevant assessment year. He took us through page no.58-59 of the paper book in the case of Pankaj Nagaindas Bhayani and submitted that the approval in this case for reopening of the assessment has been granted by the Jt. Commissioner whereas under section 151 of the Act, this approval was ought to be granted by the ld.Commissioner. Similarly, in the case of Mohit Dolatrai Patel copy of such reasons along with approval is being placed on page nos.18 and 19 of the paper book. The approval has been granted by the JCIT, Range-2, Bhavnagar. Thus, according to the and 2783/Ahd/2017 3 ld.counsel for the assessee, notice under section 148 was without jurisdiction and deserves to be quashed in both the cases.

The ld.DR, on the other hand, submitted that this plea was not taken by the assessee before the ld.CIT(A) though they have challenged reopening of the assessment, but it was not verified whether from this verification, some other details are available exhibiting that approval was granted by the competent authority.

We have duly considered rival submissions and gone through the record carefully. There is no dispute with regard to the proposition that if four years have expired from the end of the relevant assessment year, then notice under section 148 cannot be issued unless Pr.Chief Commissioner or Chief Commissioner, or Pr.Commissioner or Commissioner is satisfied on the reasons recorded by the AO that it is a fit case for the issue of such notice. In other words, unless the approval is being taken from these officials no notice can be issued. Prima facie from the perusal of the copy of proforma which have been transmitted by the AO for seeking approval, it is discernible that such approval by the JCIT, who is competent officer in the present case, but this plea was not taken before any of the authorities below, nor it was verifiable. Considering the above aspects, we deem it appropriate to set aside orders of the ld.CIT(A) in both the cases and remit the issue before the ld.CIT(A). The ld.CIT(A) is requested to verify the fact, whether approval has been taken from the ld.Pr.CIT/ Chief Commissioner or Pr.Commissioner/Commissioner before issuance of notice in both the cases. It is also observed that the assessee will be at liberty to raise any other plea regarding validity of re- opening of the assessment and the ld.CIT(A) would entertain all and 2783/Ahd/2017 4 such pleas while re-adjudicating the issue of reopening. In case prayer of the assessee is being accepted by the ld.CIT(A), then other issues would become redundant. But in case reopening is upheld in both the appeals, then the assessee will be at liberty to challenge such order of the ld.CIT(A) along with the issues relating to the addition on merit before the Tribunal, because in the present proceedings, we are not adjudicating the addition on merit. The observations made by us will not impair or injure the case of the AO and will not cause any prejudice to the defence/explanation of the assessee.

In the result, both appeals of the assessee are allowed for statistical purpose.