ACIT, NEW DELHI vs. SH. JYOTINDER SINGH RANDHAWA, GURGAON

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ITA 2256/DEL/2014Status: DisposedITAT Delhi31 August 2016AY 2005-064 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the first appellate order, finding the reopening proceedings invalid due to improper approval under Section 151. This irregularity was deemed not curable under Section 292BB.

What were the facts?

The Revenue questioned the annulment of the assessment order. The reopening was initiated after four years, and approval was obtained from the Additional Commissioner instead of the Commissioner of Income Tax.

What were the issues?

The primary issue was the validity of the reassessment proceedings initiated after four years, specifically concerning the required approval under Section 151 and its curability.

Which sections of the Income-tax Act were involved?

Section 147,Section 151,Section 292BB

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, DELHI BENCH: ‘D’ NEW DELHI

Before: SH. G.D. AGARWAL & SH. I.C. SUDHIR

For Respondent: Dr. Rakesh Gupta, Adv. & Sh
Hearing: 20.06.2016Pronounced: 31.08.2016

ORDER PER I.C. SUDHIR, J.M.: The Revenue has questioned the first appellate order on several grounds involving the issue of validity of annulment of the assessment order.

1.

2. In support of the grounds, the learned Sr. Departmental Representative has basically placed reliance on the assessment order. He submitted that the Assessing Officer has invoked the provisions of Section 147 of the Income-tax Act, 1961 (for short “the Act”) within time with prior approval and insured service. He submitted that the assessee did not raise the Commissioner of Income Tax before the Assessing Officer and the entire assessment proceeded with his cooperation. It was at the best procedure lapse. He also referred the provisions of Section 292BB(c) of the Act to support his contention that appearance in proceedings or cooperation in any inquiry relating to assessment or re-assessment, it shall be deemed that any notice under any provisions of the Act which is required to be served on the assessee, has been duly served.

2.

Learned Authorized Representative, on the other hand, tried to justify the first appellate order with this contention that the original assessment was framed under Section 143(3) of the Act and reopening proceedings were initiated after four years from the end of the relevant assessment year; as per the first proviso to Section 147, there is no allegation in the reasons recorded that reopening was as a result of assessee’s failure to disclose material facts fully and truly; original assessment having been framed under Section 143(3) of the Act, mandatory satisfaction/approval under Section 151(1) was to be of Commissioner of Income Tax, whereas in this case it has been obtained from Addl. Commissioner of Income Tax and thus jurisdiction assumed under Section 147 was bad in law; and in the assessment order, it has been wrongly mentioned that the original assessment was done under Section 143(3) of the Act, which is contrary to the facts. He thus contended that this is a change of opinion on same set of facts as were in the original assessment proceedings. He placed reliance on the following decisions: i. Commissioner of Income Tax Vs. Kelvinator of Indian Learned, (2010) 320 ITR 561 (SC) ii. Commissioner of Income Tax Vs. Dumraon Cold Storage & Refrigeration Services, (1974) 97 ITR 137 (Pat.) iii. Commissioner of Income Tax Vs. Maharaja Pratap Singh, 41 ITR 421 (SC).

3.

Learned Authorized Representative further pointed out that the learned Commissioner of Income Tax (Appeals) in its order for the assessment year 2009-10 had accepted non- resident status of the assessee and had allowed benefit propounded in Explanation (a) to Section 6(a)(c) of the Act.

4.

Having gone through the orders of the authorities below as well as the decisions relied upon, we find that there is no dispute on the relevant facts of the case that the reopening notice was issued after expiry of four years from the end of the relevant assessment year and that the Assessing Officer had taken approval of Addl. Commissioner of Income Tax instead of Commissioner of Income Tax as prescribed under Section 151 of the Act. Learned Commissioner of Income Tax (Appeals) has held the initiation of reopening proceedings as invalid on the sole basis that the approval was not obtained from Commissioner of Income Tax but from the Addl. Commissioner of Income Tax. In this regard, he has followed the decision of Hon’ble Jurisdictional High Court of Delhi in the case of Commissioner of Income Tax vs. SPL’s Siddhartha Ltd., reported in 345 ITR 225(Del). The Hon’ble High Court in this case has also pleased to hold that such irregularity Section 292BB of the Act. Since the finding of the learned Commissioner of Income Tax (Appeals) is supported with the decision of the Hon’ble Jurisdictional High Court of Delhi in holding the re-assessment as not in accordance with the provisions of the Income-tax Act and thus it is null and void, we are not inclined to interfere with the first appellate order on the issue. The same is upheld and the grounds involving the issue are thus rejected.

5.

In the result, the appeal of the Revenue is dismissed. The decision is pronounced in the open court on 31st August, 2016.

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