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Income Tax Appellate Tribunal, DELHI BENCH: ‘G’: NEW DELHI
Before: SH. VIJAY PAL RAO & SH. O.P. KANT
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘G’: NEW DELHI BEFORE SH. VIJAY PAL RAO, JUDICIAL MEMBER AND SH. O.P. KANT, ACCOUNTANT MEMBER ITA No. 5122/Del/2013 Assessment Year: 2000-01 Income Tax Officer, Ward 9(2), Vs. M/s. Stellar Capital Services Pvt. New Delhi Ltd., 325, Vardhman Grand Plaza, Mangalam Place, Sector-3, Rohini, New Delhi (PAN: AAACS3356A) (Appellant) (Respondent)
Appellant by Sh. Anima Barnwal, Sr. DR Respondent by Sh. Kapil Goyal, Adv. Date of hearing 23.12.2015 Date of pronouncement 24.02.2016 ORDER PER O.P. KANT, A.M.: The present appeal by the Revenue is directed against the order dated 13.06.2013 of learned Commissioner of Income Tax(Appeals)-XII, New Delhi, passed for the assessment year 2000-01. The Revenue raised the following grounds of appeal: 1) “The learned Commissioner of Income Tax (Appeals) has erred in law and on facts in condoning the delay in filing appeal before the Commissioner of Income Tax (Appeals). 2) The learned Commissioner of Income Tax (Appeals) has erred in law and on facts in quashing the proceeding u/s 147 of the Income Tax Act, 1961, thereby deleting the addition made by the Assessing Officer.
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3) The appellant craves to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal.
The facts in brief are that the assessment was reopened by issue of a notice under Section 148 of the Income-tax Act, 1961 (for short “the Act”) on 08.03.2007. After repeated reminders and summons, the assessee filed a letter on 13.08.2007 stating to treat the return filed for the year on 29.11.2000 as return filed in response to the notice issued under Section 148 of the Act. Subsequently, notice under Section 143(2) of the Act was issued on 20.08.2007. Though there was non-compliance of the notices issued under Section 143(2) and 142(1) of the Act, the assessment was finally completed at an assessed income of Rs. 90,93,313/-. Aggrieved, the assessee filed an appeal before the learned Commissioner of Income Tax (Appeals) along with the request for condonation of delay of around 1500 days. The learned Commissioner of Income Tax (Appeals) condoned the delay. In view of the fact that there was change of Management in the Company and the new management was not aware of the assessment proceedings in the case and they came to know after a substantial delay. The learned Commissioner of Income Tax (Appeals) also relied on the following judgments for condoning the delay: 1. The Hon’ble Supreme Court in the case of Ram Nath Sao @ Ram Nath Sahu and Ors. Vs. Gobardhan Sao and Ors.) 2002) 3 SCC 195; 2. The Hon’ble Supreme Court in the case of N. Balakrishnan Vs. M. Krishnamurthy, 2002-TIOL-737-SC-IT; and
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The Hon’ble Jurisdictional High Court of Delhi in its recent order in the case of Narinder Kumar & Others Vs. Commissioner of Income Tax, reported in 2012-TIOL-320-HC-Del-IT. 3. Before the Commissioner of Income Tax (Appeals), the assessee challenged the assessment order on legality as well as on merit. The learned Commissioner of Income Tax (Appeals) quashed the re-assessment proceedings and did not adjudicate on merit. Aggrieved, the Revenue is before us. 4. In respect of ground no. 1 qua the condonation of delay, the learned Commissioner of Income Tax (Departmental Representative) objected for condonation of delay of around 1500 days by the learned Commissioner of Income Tax (Appeals) without sufficient ground. 4.1 On the other hand, learned Authorized Representative submitted that there was valid ground for condonation of delay and submitted that the Commissioner of Income Tax (Appeals) has rightly condoned the delay. 4.2 We have heard the rival submissions and perused the material on record. In our view, Commissioner of Income Tax (Appeals) looking into the facts and circumstances and relying upon the judicial precedents has decided the issue judiciously. The relevant finding of the learned Commissioner of Income Tax (Appeals) is reproduced as under: “I have perused the facts stated in the petition for condonation for delay in filing of appeal as well as the facts stated in affidavits and the submissions filed by the assessee, Remand Report of the Assessing Officer, comments of the assessee, the assessment order as well as the assessment record. In the interest of justice the delay in filing of appeal is being condoned, as there exist a bonafide cause as mentioned in the affidavit at the page no. 9, 10 & 11 of my order as well as the
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submissions of the assessee. There was a change in management and the new management took over on 10.11.2010 as evident from the form no. 18 and 32 filed with ROC. The appeal could not filed by the previous management due to the negligence of the counsel as evident from their affidavit. The present management after obtaining certified copy of the assessment order and Penalty Order on 20.03.2012 filed the appeal immediately on 29.03.2012. Hence, the delay is being condoned as there was sufficient cause which was bonafide hence the appeal is allowed.” 4.3 The finding of the ld. CIT(A) on this issue is well reasoned and, therefore, no interference is required and hence, this ground raised by the Revenue is dismissed. 5. In respect of ground no. 2 qua the quashing of proceedings under Section 147 of the Act, the ld. Sr. DR submitted that the Assessing Officer was in doubt whether the scrutiny proceedings in the case were completed or not and, therefore, the permission was sought from the Commissioner of Income Tax instead of the Joint/Additional Commissioner of Income-tax. He further submitted that as the permission was obtained from a higher authorities should be treated as compliance of the provisions of the Act. 5.1 On the other hand, the ld. Authorized Representative relied on the findings of the CIT(A). 5.2 In this case, the original return of income was filed on 29.11.2000 and, thereafter, the notice under Section 148 of the Act was not issued on 08.03.2007. According to Section 151(2) of the Act, in cases other than the proceedings completed under Section 143(3)/147 of the Act, no notice under Section 148 of the Act could be issued by the Assessing Officer, who is below the rank of Joint
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Commissioner of income-tax, after expiry of the 4 years from the end of the relevant assessment year unless the Joint Commissioner of Income Tax is satisfied on the reasons recorded by such Assessing Officer that it is fit case for issue of such a notice. In this case, notice has been issued after expiry of four years i.e. on 8.03.2007, from the end of the relevant assessment year i.e. 31.03.2001 and, therefore, satisfaction of the Joint Commissioner was required. The ld. AR referred to a later dated 01.03.2007 issued by the Income Tax officer in the Headquarter of the Commissioner of Income Tax-III, New Delhi, wherein he has conveyed the approval of the Commissioner of Income Tax under Section 151(1) in the case to the assessee. In view of the fact, it is undisputed that the approval was granted by the Commissioner of Income Tax as against the approval required from Joint Commissioner of the Income Tax as per law. This issue is squarely covered by the judgment of the Hon’ble Jurisdictional High Court in the case of CIT Vs. SPL’s Siddhartha Ltd. (345 ITR 223) (Delhi). The findings of the ld. CIT(A) on the issue in dispute are reproduced as under:
“There is no statutory provision here under which a power to be exercised by an officer can be exercised by a superior officer. When the statute mandates the satisfaction of a particular functionary for the exercise of a power, the satisfaction must be of that authority. Where a statute requires something to be done in a particular manner, it has to be done in that manner. Further, the reasons recorded by the Assessing Officer is vague and has also not stated that he is satisfied that it is a fit case for reopening. In view of all these facts the Assessing Officer lacks jurisdiction hence the proceeding initiated u/s 147 of the Act and completion of assessment u/s 147/143(3) of the Act is illegal, ab-intio void and is quashed.” 5.3 In view of above discussion, we are of the opinion that the CIT(A)’s findings are well reasoned and no interference is required by us in those findings
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and accordingly, we uphold the same. The ground of the appeal is thus accordingly dismissed. 6. In the result, the appeal filed by the Revenue is dismissed. The decision is pronounced in the open court on 24th February, 2016.
Sd/- Sd/- (VIJAY PAL RAO) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 24th February, 2016. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi