ITO, ROHTAK vs. SMT. NANDINI SINGLA, ROHTAK

Briefly stated, the facts of the appeal in the case of Shri Lalit Singla are that notice u/s 148 of the Income-tax, 1961 (hereinafter also called ‘the Act’) was issued on 29.3.2014 requiring the assessee to file his return of income for the AY 2007-08. The AO completed the assessment u/s 144 by making an addition of Rs.39,07,975/- towards unexplained source of investment in property. The ld. CIT(A) quashed the notice issued u/s 148 by finding that this case was covered by section 151(2) and the AO got the approval from CIT before issuing notice u/s 148 instead of JCIT/Addl.CIT. The Revenue is aggrieved as under :-

I have heard the rival submissions and perused the relevant material on record. Material part of section 151, prior to its substitution by the Finance Act, 2015, reads as under :-

A bare perusal of sub-section (1) of section 151 reveals that sanction for issue of notice should be obtained by the AO from JCIT. In case a period of four years from the end of the relevant assessment year has expired and the original assessment was made u/s 143(3) or section 147, then, no notice can be issued without seeking sanction from the Chief Commissioner of Income-tax or Commissioner of Income-tax.

Adverting to the facts of the instant case, it is found as an admitted position that the assessment of the assessee was not made earlier u/s 143(3) or section 147. In that view of the matter, the case being covered u/s 151(2), it was obligatory on the part of the AO to obtain sanction for issuance of notice from JCIT as the period of four years from the end of the relevant assessment year stood expired at the time of issuance of notice on 29.3.2014. As the AO in the instant case obtained sanction from the CIT and not the JCIT, it did not confer a valid jurisdiction to him to proceed with the assessment. The Hon’ble jurisdictional High Court in CIT VS. SPL’s Siddhartha Ltd. (2012) 345 ITR 223 (Del) dealt with almost similar situation as is prevailing before me. The AO in that case sought approval of Commissioner only. The Hon’ble High Court held that it could not be said that the Joint Commissioner/Additional Commissioner had granted the approval and accordingly set aside the notice and the consequential assessment.

Section 292B invoked by the ld. DR also does not come to the rescue of the Revenue because it simply provides that no notice, etc., shall be invalid merely by reason of any mistake, defect or omission in such notice, etc., if such notice, etc., is in substance and in effect in conformity with or according to the intent and purpose of the Act. It is simple and plain that lack of jurisdiction cannot be made good by virtue of the provisions of section 292B. As the AO in the extant case obtained sanction from the CIT before issuing notice u/s 148 instead of the JCIT, the issue of notice and the consequential assessment, in my considered opinion, have rightly been quashed by the ld. CIT(A). I, therefore, endorse the view taken by the ld. first appellate authority.

Both the sides are in agreement that the facts and circumstances of the other assessee, namely, Smt. Nandini Singla, who is wife of Shri Lalit Singh, are identical. Following the view taken hereinabove, I countenance the view taken by the ld. CIT(A).

In the result, both the appeals are dismissed.