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Income Tax Appellate Tribunal, DELHI BENCHES : SMC-1 : NEW DELHI
Before: SHRI R.S. SYAL
Date of Hearing : 16.11.2016 Date of Pronouncement : 17.11.2016 ORDER
These two appeals by the Revenue relating to the assessment year 2007-08 involve two different, but, related assessees. Since the factual matrix and the grounds taken before the Tribunal in both the appeals are common, I am, therefore, proceeding to dispose them off by this consolidated order for the sake of convenience.
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 :-
“1. Keeping in view of the fact that the assessee has never objected to the validity of notice u/s 148 of the Income Tax Act, 1961 during the course of assessment proceedings the decision of CIT(A), Rohtak is not acceptable because as per section 292B (Sic 292BB) of the Income Tax Act, 1961 notice deemed to be valid in prevailing circumstances of the case.”
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 :-
`Sanction for issue of notice. 151. (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 Chief 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 Joint Commissioner, after the expiry of four years from the end of the relevant assessment year, 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.’
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.
Sub-section (2) of section 151, on the other hand, applies to cases not falling under sub-section (1). The effect of sub-section (2) is that where no assessment was earlier made, notice can be issued by an AO u/s 148 after the expiry of four years from the end of the relevant assessment year only after obtaining sanction from JCIT. Thus, it is apparent that there are two categories of cases requiring sanction for issue of notice u/s 148 viz., those in which assessment was earlier made u/s 143(3) or section 147, which are covered u/s 151(1) of the Act and rest of the cases, which are covered u/s 151(2) of the Act.
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.
The order pronounced in the open court on 17.11.2016.