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Income Tax Appellate Tribunal, DELHI BENCH “E”, NEW DELHI
Before: SHRI H.S. SIDHU & SHRI O.P. KANTDR. SHYAMA PRASAD MUKHERJEE,
per the powers given to them in specified
circumstances. If a statutory authority has been vested with jurisdiction, he has to exercise it according to its own discretion. If discretion is exercised under the direction or in compliance with some higher authorities instruction, then it will be a case of failure to exercise discretion altogether.
Held, that under section 151 of the Act, it was only the Joint Commissioner or Additional
Commissioner, who could grant the approval for issue of notice under section 148. The approval was not granted by the Joint Commissioner.
Instead, it was taken from the Commissioner of Income-tax. This was not an irregularity curable under section 292B. The notice was not valid."
5.3 The case record did not dispute the fact that the approval of the Addl. CIT was not obtained.
Undisputedly, the original assessment was completed u/s 143(3) in the appellant's case for the relevant AY and also 4 years have passed from the end of the AY before issuance of notice u/s 148. However, the legal requirement of satisfaction/approval of the CIT was not obtained before Issuance of notice u/s 148. Therefore, after careful consideration of the facts and decision of jurisdictional High Court as mentioned above, the reopening is held invalid and is liable to be quashed. In view of the above discussion, I am of the considered view that the reassessment in pursuance of notice u/s 148 is not in accordance with the provisions of Income Tax Act and accordingly, the consequential reassessment is held to be null and void.
In view of above, the other grounds are not being considered worth to be adjudicated here as now these are of academic importance only.”
After going through the findings of the Ld. CIT(A), as aforesaid, we are of the view that in this case satisfaction for reopening the assessment after completion of original assessment u/s. 143(3) of the Act has been obtained from the Additional Commissioner of Income Tax in contravention to the provisions of section 151 of the Act. However, the original assessment was completed on 31.3.2003 u/s. 143(3) of the Act in assessee’s case for the relevant AY and also 4 years have passed from the end of the AY before issuance of notice dated 28.3.2008 u/s. 148.
Secondly, the legal requirement of satisfaction / approval of the CIT was not obtained before issuance of notice u/s. 148. Therefore, Ld. CIT(A) has rightly held the reopening as null and void by following the Hon’ble Delhi High Court decision in the case of CIT vs. SPL’s Siddhartha Ltd. 345 ITR 223 wherein the Hon’ble High Court has upheld the cancellation of assessment. The heads note of the said case are reproduced as under:-
"When a statute requires a thing to be done in a certain manner/ it shall be done in that manner alone and the court would not expect its being done in some other manner/ Section 116 of the Income-tax Act, 1961/ defines the income-tax authorities as different and distinct authorities.
Such different and distinct authorities have to exercise their powers in accordance with law as
per the powers given to them in specified
circumstances. If a statutory authority has been vested with jurisdiction, he has to exercise it according to its own discretion. If discretion is exercised under the direction or in compliance with some higher authorities instruction, then it will be a case of failure to exercise discretion altogether.
Held, that under section 151 of the Act, it was only the Joint Commissioner or Additional
Commissioner, who could grant the approval for issue of notice under section 148. The approval was not granted by the Joint Commissioner.
Instead, it was taken from the Commissioner of Income-tax. This was not an irregularity curable under section 292B. The notice was not valid."
7.1 In the background of the aforesaid discussions and respectfully following the precedent of the Hon’ble High Court of Delhi in the case of CIT vs. SPL’s Siddartha ltd. (Supra), we are of the considered view that Ld. CIT(A) has passed a well reasoned order which does not need any interference on our part, hence, we uphold the finding of the Ld. CIT(A) in quashing the reassessment and dismiss the grounds raised by the Revenue.
In the result, the appeal of the Revenue is dismissed.
Order pronounced in the Open Court on 08/08/2016.