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Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI
Before: N.K. BILLAIYA & SHRI SANJAY GARG
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee against the order dated 14.03.2012 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2005-06.
At the outset, the Ld. A.R. of the assessee has pointed out that the assessment proceedings in this case have been reopened under section 147 of the Act after more than four years from the end of the relevant assessment year. He has invited our attention to section 151(1) of the Act wherein it has been provided that no notice shall be issued under section 148 by Assessing Officer (hereinafter referred to as the AO) after the expiry of a period of four years from the end of the relevant assessment year unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied on the reasons recorded by the AO that it is a fit case
2 Capt. V. Vijay Kumar Nair for the issue of such notice. The Ld. A.R. has further invited our attention to the sanction letter bearing No.ACIT-2(2)(2)/ITAT Matter/2014-15 dated 27.01.2015 wherein the sanction has been granted by Additional Commissioner of Income Tax and not by the Commissioner of Income Tax and above as provided under section 151(1) of the Act. The Ld. A.R. has relied upon the decision of the Hon’ble Bombay High Court in the case of “DSJ Communications Ltd. vs. DCIT” (2014) 22 taxman.com 129 wherein the Hon’ble Bombay High Court has held that the sanction for issue of notice should be from the competent authority as provided under the provisions of the Act. The Hon’ble Bombay High Court has relied upon the decision of the Hon’ble Delhi High Court in the case of “CIT vs. SPL’s Siddhartha Ltd.” (2012) 17 taxman.com 138 wherein it has been held that the powers which are conferred on a particular authority have to be exercised by that authority and the satisfaction which the statute mandates of a distinct authority cannot be substituted by the satisfaction of another. Similar view has been taken by the Hon’ble Bombay High Court in the case of “Ghanshyam K. Khabrani vs. ACIT” (2012) 346 ITR 443 (Bom.).
In view of the above, the reassessment proceedings initiated pursuant to sanction obtained from another authority who was not competent to provide so, are held to be invalid and consequential additions pursuant to such reopened assessment are liable to be quashed. We order accordingly.
In the result, the appeal of the assessee is hereby allowed.
Order pronounced in the open court on 03.02.2016.