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Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL
Before: SHRI G.D. AGRAWALG.D. AGRAWAL & AND BEFORE SHRI G.D. AGRAWALG.D. AGRAWAL & AND SHRI SUDHANSHU SRIVASTAVA SHRI SUDHANSHU SRIVASTAVASHRI SUDHANSHU SRIVASTAVA SHRI SUDHANSHU SRIVASTAVA
PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP :- PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP This appeal by the assessee for the assessment year 2005-06 is directed against the order of learned CIT(A)-XI, New Delhi dated 31st January, 2013.
Ground No.1 of the concise grounds of appeal of the assessee reads as under:-
“1. That the learned Commissioner of Income Tax (Appeals) XI, New Delhi has grossly erred both in law and on facts in upholding the initiation of proceedings u/s 147 of the Act and assumption of jurisdiction to frame an assessment u/s 147/143(3) of the Act despite the fact that there was no material on record to form “reason to 2 ITA-2349/Del/2013 believe” that income of the appellant had escaped assessment and thus both deserve to be quashed as such.”
We have heard the arguments of both the sides and have perused relevant material placed before us. The copy of reasons records is placed at page 72 of the assessee’s paper book, which reads as under:-
“To The Principal Officer, M/s Shree Ram Straw Products Ltd., Chamunda Vihar, Ram Nagar Road, Kashipur, US Nagar, Uttrakhand.
Sir, Sub :- Seeking reasons for initiation proceedings u/s 148 of IT Act, for the AY 2005-06 – reg.
Please refer to your counsel letter No.127/CIT(A)/2005-06 dt. 12.1.2012 on the subject noted above.
In this regard, it is informed that the case was selected for scrutiny by issue of notice u/s 148 in pursuance of CBDT guidelines for selection of cases under “Compulsory Scrutiny category” where additions of Rs.10 lakhs or more was made and sustained by the CIT(A) in the preceding F.Y.” Yours faithfully Sd/- (Hari Bhushan) Income Tax Officer, Ward-8(3), New Delhi.
From the above, it is evident that Section 148 was utilized for the purpose of scrutiny of the case. Thus, the department issued notice u/s 148 for scrutiny of the case because notice u/s 143(2) could not be issued within the period of limitation prescribed for issuing notice u/s 143(2). In our opinion, Section 147 is not a substitute for getting more time for issue of notice u/s 143(2). Otherwise, there would be no sanctity of the time limit for issue of notice u/s 143(2). When the assessee has filed the return of income and the department wants to 3 ITA-2349/Del/2013 scrutinize the return, it must issue notice u/s 143(2) within the time limit prescribed in the said Section. In view of the above, we are of the considered opinion that notice u/s 148 cannot be issued for scrutiny of the case. In the reasons recorded, there is no satisfaction of the escapement of income which is a sine qua non for assuming jurisdiction u/s 148. In view of the above, we quash the notice u/s 148 and consequentially, the assessment order framed in pursuance to such notice is also quashed.
Since we have quashed the assessment order framed in pursuance to notice u/s 148, the other grounds raised by the assessee in this appeal have become infructuous and need no adjudication.
In the result, the appeal of the assessee is allowed. Decision pronounced in the open Court on 03.03.2016.