SHANTI CHOWDHRY,DELHI vs. INCOME TAX OFFICER, WARD 69(2), DELHI

The instant appeal filed by the assessee is directed against the order dated 23.04.2024 passed by Learned Commissioner of Income Tax(Appeals), National Faceless Appeal Centre(NFAC), Delhi, arising out of the order dated 27.12.2019 passed by the Income Tax Officer, Ward No.69(2), Delhi, under Section 147 r.w.s. 143(3) of the Income Tax Act, 1961(hereinafter referred to as the “Act”) for Assessment Year 2012-13.

The assessee before us has challenged the initiation of proceeding under Section 147 of the Act and sanction obtained under Section 151 Page1 of the Act for such re-opening. On the basis of the information received from JDIT(investigation), Unit-1, New Delhi, search and seizure operation was carried out by the Investigation Wing, New Delhi, in the case of one Shri Anand Kumar Jain and Shri Naresh Kumar Jain having business of providing accommodation entries to various beneficiaries through cheque/DD/RTGS in lieu of cash through various paper and dummy companies/concerns floated and controlled by them where Ms Shanti Chowdhary the assessee before us has been found to have been one of the beneficiaries for taking accommodation entries to the tune of Rs.10,00,055/- for the year under consideration. Notice under Section 133(6) of the Act dated 20.02.2019 was issued upon the assessee which was responded and the assessment was re-opened invoking the provision of Section 147 of the Act upon taking approval from the competent authority and notice under Section 148 of the Act dated 31.03.2019 was issued and served upon the assessee. Such re- assessment proceedings was culminated in the order of addition to the tune of Rs.10,00,055/- which was further confirmed by the First Appellate Authority. Hence the instant appeal before us.

The case of the Revenue is this that as per ITS data, assessee has not filed her Income Tax return for Assessment Year 2012-13 though it was duly filed by her on 08.08.2012. In this regard, the Learned AR Page2 has drawn our attention to the reasons recorded by the AO annexed to the paper book at page.6-7 therein and submitted that re-opening has been done on incorrect finding of facts. In this regard the Learned AR relied upon the judgment passed by the Hon’ble Delhi High Court in W.P.(C) 13342 of 2018 in the matter of Shree Tarlok Chand Lal Goyal vs ACIT. The Learned AR further joins issue on the so-called approval obtained under Section 151 of the Act from the Learned Principal Commissioner of Income Tax (in short PCIT) where the PCIT has not even mentioned the date of his approval on the Form for recording the reasons for initiating proceedings under Section 147 of the Act and for obtaining the sanction under Section 151 of the Act. In that view of the matter the sanction is also not in terms of law and is liable to be quashed as argued by him. In this respect he has drawn our attention to page-7 of the Paper Book perusal of which it appears that the Learned PCIT has not mentioned the date of sanction granted to the ITO for re-opening of assessment under Section 147/148 of the Act.

As per the provision of Section 151(i) of the Act no notice can be issued by an AO under Section 148 of the Act after the expiry of 4 years from end of relevant Assessment Year unless the Learned PCIT/CCIT is satisfied on the reasons recorded by the AO that it is a fit case for issuance of such notice. It appears that though sanction claimed to have been obtained from the Learned PCIT, for re-opening of Page3 assessment for Assessment Year 2012-13, document whereof annexed at page-7 of the Paper Book filed before us, no date has been mentioned by the Learned PCIT while granting such sanction under Section 151 of the Act. The same, thus, cannot be said to be a valid one and therefore, consequentially the notice under Section 148 of the Act dated 31.03.2019 on the basis of such invalid sanction is found to be illegal and void ab initio. The judgment relied upon passed by the Hon’ble High Court in the matter of Shree Tarlok Chand Lal Goyal vs ACIT(supra) has been duly considered wherein it is found that on the basis of wrong finding of fact that the assessee has not filed the return of income for the year under consideration reasons to believe was recorded whereas the assessee duly filed the return of income. As the foundation on the basis of which the assessee’s proceedings has been triggered against the assessee is found to be wrong, the entire assessment proceedings has been quashed as void ab initio by the Hon’ble High Court. Needless to mention that the ratio of the said judgment is squarely applicable to the case in hand; though the assessee duly filed its return of income it was mentioned categorically in the reasons recorded by the Learned AO appearing at page-7 of the Paper Book that the assessee has not filed her return of income and the assessment proceeding was initiated against the assessee. Thus the very foundation of the said re-assessment proceeding initiated against Page4 the assessee before us since not correct, in the absence of solid foundation, the entire proceeding is vitiated, void ab initio, bad in law and liable to be quashed. With the above observations the assessment proceeding is hereby quashed.

Hence, assessee’s appeal is, thus, allowed.