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Income Tax Appellate Tribunal, MUMBAI BENCHES “D”, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI N.K. PRADHAN
ORDER PER N.K. PRADHAN, A.M The appeal has been filed by the assessee. The relevant assessment year is 2007-08. The appeal is directed against the order of the learned CIT(A)
– 29 at Mumbai, and arises out of assessment completed by the Assessing Officer (AO) under section 147 r.w.s 148 of the Income Tax Act 1961 (hereinafter ‘the Act’).
Ground No. 1 of the appeal raised by the assessee is that the learned CIT(A) erred in holding that the AO had validly assumed jurisdiction under section 147 of the Act, and accordingly erred in holding that the re- assessment made was valid.
Briefly stated, the facts are that the assessee filed his return of income for the AY 2007-08 on 28/10/2007 showing income of Rs. 94,48,796/-. The AO made an assessment under section 143(3) on 14/12/2009 determining the income at Rs. 97,17,350/-. Subsequently the AO reopened the assessment by issuing notice under section 148 on 18/10/2011. This reopening made by the AO by issuing notice under section 148 is the crux of ground no. 1 filed by the assessee. The learned CIT(A) dismissed the appeal filed by the assessee against the said reopening made by the AO .
The learned counsel of the assessee took us to the reasons of reopening recorded by the AO and the satisfaction signed by the Addl. Commissioner of Income Tax, Range 17(2) (Addl. CIT), Mumbai. It was stated by him that the Addl. CIT has only signed at column 12 and he has not at all mentioned whether he is satisfied on the reasons recorded by the AO that it is a fit case for the issue of a notice u/s 148. The learned counsel then relied on the judgment in the case of CIT vs. S. Goyanka Lime & Chemical Ltd. [2015] 231 Taxman 73 (MP) &[2015] 64 taxman. com 313 (SC)
The learned DR supported the order passed by the learned CIT(A).
After considering the rival submissions and perusing the relevant material on record we observe that the Addl. CIT has only put his signature on the proposal sent by the AO for reopening the assessment. He has not mentioned whether he is satisfied with the reasons given by the AO that it is a fit case for issue of a notice under section 148. We may now refer to the decision in the case of S.Goyanka Lime & Chemical Ltd. (supra). In the said case the Joint Commissioner had accorded the sanction for reopening the assessment under section 147 by stating ‘I am satisfied’. The Hon’ble High Court followed the decision of a Coordinate Bench in the case of Arjun Singh vs. Assistant Director of Income Tax [2000] 246 ITR 363 (MP) wherein the following principles are laid down :
“The Commissioner acted, of course, mechanically in order to discharge his statutory obligation properly in the matter of recording sanction as he merely wrote on the format “Yes, I am satisfied” which indicates as if he was to sign only on the dotted line.” Against the above judgement, the Revenue filed SLP before the Supreme Court. The SLP was dismissed by the Hon’ble Supreme Court.
6.1 We may mention here that in the instant appeal the Addl. CIT has not mentioned anything while putting his signature in Column 12. He has not given his satisfaction on the reasons recorded by the AO that it is a fit case for the issue of a notice under section 148. He is totally silent on this.
6.2 Respectfully following the judgement in the case of S.Goyanka Lime & Chemical Ltd.(supra), we come to a finding that the reassessment proceeding based on the notice issued under section 148 is bad in law. We, therefore, set aside the findings of the learned CIT(A) and quash the re- assessment order made by the AO under section 147 r.w.s 148 of the Act.
6.3 As we have quashed the reassessment order, we do not find it necessary to go into the merit of the case.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court 24/08/2016