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Income Tax Appellate Tribunal, DELHI BENCHES : E : NEW DELHI
Before: SHRI R.S. SYAL & SMT. BEENA A. PILLAI
ORDER PER R.S. SYAL, VP: This appeal by the Revenue and the Cross Objection by the assessee are directed against the order dated 30.07.2015 passed by the CIT(A) in relation to the assessment year 2006-07.
The Revenue is aggrieved against the annulling of reassessment by the ld. CIT(A).
Briefly stated, the facts of the case are that the assessee filed its return and the assessment was completed u/s 143(3) of the Income-tax Act, 1961 (hereinafter also called `the Act’) on 16.12.2008. Thereafter, some information was received from ITO, Ward-1, Ghaziabad, vide letter dated 24.01.2013, who, in turn, had received information from the Directorate of Revenue Intelligence, vide its letter dated 23.01.2013, that the assessee mis- declared the actual transaction value for the Bill of Entry dated 15.06.2005 inasmuch as the rate as declared by the importer was USD 500 per MT and 2
CO No.139/Del/2018 actual rate was USD 1100. Based on this, the Assessing Officer initiated reassessment and completed the re-assessment by making an addition of Rs.27,63,588/- on this count. The assessee challenged the initiation of re- assessment proceedings before the ld. CIT(A), who annulled the assessment by noticing that the approval for initiation of re-assessment ought to have been taken from Commissioner/Chief Commissioner as per proviso to section 151(1), whereas the Assessing Officer actually sought approval u/s 151(2) from Addl. CIT. The Revenue is aggrieved against the annulling of re-assessment by the ld. first appellate authority.
We have heard both the sides and perused the relevant material on record. It is observed from reasons for reassessment dated 22.03.2013, whose copy has been placed on record, that the approval was sought by the Assessing Officer from the Addl. CIT u/s 151(2) for issuing notice u/s 148 of the Act for the assessment year under consideration. Admittedly, original assessment in this case was completed u/s 143(3) on 16.12.2008, which fact has also been acknowledged in the assessment order. In such a situation, it becomes relevant to consider the mandate of section 151 of the Act, as applicable at the material time, reading as under:- 3
CO No.139/Del/2018 Section 151 - (1) In a case where an assessment under sub-section (3) of section 143 or section 147 has been made for the relevant a.y., no notice shall be issued under section 148 [by the Assessing Officer, who is below the rank of Assistant Commissioner [or Deputy Commissioner], unless the [Joint] Commissioner is satisfied on the reasons recorded by such Assessing Officer that it is a fit case for the issue of such notice]: Provided that, after the expiry of four years from the end of the relevant assessment year, no such notice shall be issued unless the Chief Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer that it is a fit case for the issue of such notice. (2) In a case other than a case falling under sub-section (1), no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of [Joint] Commissioner, after the expiry of four years from the end of the relevant assessment year, unless the [Joint] Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice.] [Explanation – For removal of doubts, it is hereby declared that the Joint Commissioner, the Commissioner of the Chief Commissioner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice under section 148, need not issued such notice himself.]”
It is apparent from the prescription of section 151 of the Act that the proviso to sub-section (1) gets attracted where notice u/s 148 is issued after the expiry of four years from the end of relevant assessment year. In such a scenario, approval has to be mandatorily taken from the Commissioner or Chief Commissioner. On the other hand, sub-section (2) of section 151 is triggered when a case does not fall under sub-section (1) of section 151, in CO No.139/Del/2018 which case approval is required to be obtained from the Joint Commissioner.
Adverting to the facts of the instant case, we find that original assessment was made u/s 143(3). Notice u/s 148 was, admittedly, issued after recording of reasons dated 22.03.2013. This transpires that a period of four years from the end of the relevant assessment year 2006-07 had already expired at the time of issuing notice. Going by the mandate of the proviso to sub-section (1) of section 151, the Assessing Officer was required to seek approval from the Commissioner/Chief Commissioner before issuing notice u/s 148 of the Act. As against that, the AO actually sought approval of the Addl. CIT u/s 151(2) of the Act, which is patently incorrect.
The Hon'ble Bombay High Court in Ghanshyam K. Khabrani vs. CIT & Ors. (2012) 346 ITR 443 (Bom), has held that the powers which are conferred upon a particular authority have to be exercised by that authority and the satisfaction, which the statute mandates of a distinct authority, cannot be substituted by the satisfaction of another. Similar view has been taken by the Hon'ble Delhi High Court in Yum Restaurants Asia Pte Ltd.
CO No.139/Del/2018 vs. DDIT (2017) 397 ITR 639 (Del). In view of the foregoing discussion, we are satisfied that the ratio decidendi of these judgment explicitly vindicate the view of ld. CIT(A) in annulling the assessment. His view is, ergo, countenanced.
The ld. AR did not press the Cross Objection, which is also dismissed.
In the result, both the appeal as well as the Cross Objection are dismissed.
The order pronounced in the open court on 01.10.2018.