R.LAKSHMINARAYANAMOORTHY,CHENNAI vs. DCIT CORPORATE CIRCLE 1, COIMBATORE

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ITA 1509/CHNY/2017Status: DisposedITAT Chennai23 August 2017AY 2009-106 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that for reassessment proceedings initiated after four years from the end of the assessment year, approval from the Principal Commissioner or Commissioner of Income Tax is mandatory as per Section 151(1) of the Act. Approval from an Additional Commissioner is insufficient.

What were the facts?

The assessee's original assessment was completed under Section 143(3). Reassessment proceedings were initiated via a notice under Section 148 after four years from the end of the assessment year. The approval for this notice was obtained from the Additional Commissioner of Income Tax.

What were the issues?

The primary issue was whether the reassessment notice issued after four years was valid, considering the level of authority that granted the approval. This involved interpreting the hierarchy of income tax authorities and the requirements of Section 151(1).

Which sections of the Income-tax Act were involved?

Section 143(3),Section 148,Section 151(1),Section 2(16),Section 116

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ (SMC

Before: SHRI ABRAHAM P. GEORGE]

For Respondent: Shri. B. Sagadevan, IRS, JCIT

आदेश / O R D E R

1.

In this appeal filed by the assessee, it has taken altogether eleven grounds of which ground No.2 assails the jurisdiction to do a reassessment.

Ld. Counsel for the assessee submitted that the original 2. assessment was completed u/s.143(3) of the Income Tax Act, 1961 (in

ITA No. 1509/Mds/2017. :- 2 -: short ‘’the Act’’) for the impugned assessment year. According to the ld. Authorised Representative reassessment proceedings were initiated through a notice dated 30.03.2016 issued u/s.148 of the Act. As per ld. Authorised Representative reassessment proceedings having been initiated after expiry of four years from the end of the impugned assessment year, it was necessary for the ld. Assessing Officer to comply with Sec. 151(1) of the Act. Ld. Authorised Representative pointed out that such Section stipulated approval of Chief Commissioner of Income Tax/ Principal Commissioner of Income Tax for issuing notice u/s. 148 of the Act after expiry of four years. As per ld. Authorised Representative, here, notice was issued after taking approval only from the Additional Commissioner of Income Tax. Thus according to him, reopening done was invalid.

3.

Per contra, ld. Departmental Representative submitted that whether the approval given by the Additional Commissioner of Income for issue of notice u/s. 148 of the Act was after getting concurrence from the jurisdictional Commissioner of Income Tax was not clear.

I have considered the rival contentions and perused the 4. orders of the authorities below. First sentence of para 2 of the assessment order is reproduced hereunder:-

ITA No. 1509/Mds/2017. :- 3 -:

‘’Further, after necessary approval received from the Additional Commissioner of Income Tax, Corporate Range (i/c), Coimbatore notice u/s. 148 dated 30.03.2016 was issued’’.

It is clear from the above that notice u/s. 148 of the Act dated 30.03.2016 was issued by the ld. Assessing Officer after getting approval from the Additional Commissioner of Income Tax. The impugned assessment year being 2009-2010, notice issued on 30.03.2016 was after expiry of four years. Section 151 of the Act which was relied on by the ld. Authorised Representative is reproduced hereunder:-

‘’(1) In a case where an assessment under sub-section (3) of section 143 or section 147 has been made for the relevant assessment year, no notice shall be issued under section 148 by an 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 Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer aforesaid, 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 5Joint Commissioner, after the expiry of four years from the end of the relevant assessment year, unless the Joint

ITA No. 1509/Mds/2017. :- 4 -:

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 the removal of doubts, it is hereby declared that the Joint Commissioner, the Principal Commissioner or Commissioner or the Principal Chief Commissioner or 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 issue such notice himself’’.

Sub-Section (1) of Sec.151 deals with the case where notice is issued after expiry of four years from the end of the assessment year. It is clear that such notice cannot be issued unless Principal Commissioner of Income Tax/ Chief Commissioner of Income Tax or Commissioner of Income Tax is satisfied that it is a fit case for issuing such notice. Sub Section (2) of Sec.151 of the Act deals with a case where four years have not expired and in such cases approval is required only from a Joint Commissioner of Income Tax. Definition of Commissioner as it appears in Sec. 2(16) of the Act is reproduced hereunder:-

‘’Commissioner’’ means a person appointed to be a Commissioner of Income Tax under sub-Section (1) of sec. 117’’. Hierarchy of Income Tax authorities u/s. 116 of the Act is reproduced hereunder:-

‘’There shall be the following classes of income-tax authorities for the purposes of this Act, namely:—

ITA No. 1509/Mds/2017. :- 5 -:

(a) the Central Board of Direct Taxes constituted under the Central Boards of Revenue Act, 1963 (54 of 1963), (aa) Principal Directors General of Income-tax or Principal Chief Commissioners of Income-tax, (b) Directors-General of Income-tax or Chief Commissioners of Income-tax, (ba) Principal Directors of Income-tax or Principal Commissioners of Income-tax, (c) Directors of Income-tax or Commissioners of Income-tax or Commissioners of Income-tax (Appeals), (cc) Additional Directors of Income-tax or Additional Commissioners of Income-tax or Additional Commissioners of Income-tax (Appeals), (cca) Joint Directors of Income-tax or Joint Commissioners of Income-tax ; (d) Deputy Directors of Income-tax or Deputy Commissioners of Income-tax or Deputy Commissioners of Income-tax (Appeals), (e) Assistant Directors of Income-tax or Assistant Commissioners of Income-tax, (f) Income-tax officers, (g) Tax Recovery officers, (h) Inspectors of Income-tax’’.

It is clear from the above hierarchy that Additional Commissioner of Income Tax is below the level of Commissioner of Income Tax. Thus in my opinion approval from the Additional Commissioner of Income Tax will not suffice for the purpose of Sec. 151(1) of the Act. In the circumstances, I am constrained to take a view that notice issued u/s. ITA No. 1509/Mds/2017. :- 6 -:

148 of the Act was invalid. Ex-consequenti reassessment order is set aside. Since the appeal is allowed on jurisdictional aspects, merits of the case are not considered.

5.

In the result, the appeal of the assessee is allowed.

Order pronounced on Monday, the 28th day of August of 2017, at Chennai.

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