Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: SH. RAVISH SOOD & DR. M. L. MEENA
him in the assessment order was obtained only as on 29.03.2017, therefore, he had invalidly assumed jurisdiction for reopening the case of the assessee u/s 147 of the Act. On the basis of his aforesaid contention, it was, inter alia, submitted by the ld. A.R that as the order u/s 143(3) r.w.s 147, dated 22.11.2017 was based on invalid assumption of jurisdiction by the A.O, viz. ITO, Ward-1(3), Bathinda, as the Notice u/s 148, dated 24.03.2017 was issued by him pre-empting the grant of the requisite sanction u/s 151 of the Act by the Pr. CIT, Bathinda, which as per the records was only granted as on 29.03.2017, therefore, the same could not 10 Sh. Ramesh Kumar Vs. ITO, Ward-1(3), Bathinda A.Y 2010-11 be sustained and, on the said count itself was liable to be vacated. Apart from that, it was submitted by the ld. A.R, that as was discernible from the ‘reasons to believe’, dated 14.03.2017 recorded by the A.O, i.e, ITO, Ward- 1(3), Bathinda, though the reassessment proceedings were initiated qua the cash deposits of Rs. 34,13,125/- in the assessee’s bank a/c with State Bank of Patiala, Branch: Grain Market, Bathinda, however, the addition was thereafter made by him vide his order passed u/s 143(3) r.w.s 147, dated 22.11.2017, not as regards the said cash deposits, but on the basis of the reasons as per which the assessee’s case was thereafter reopened by the ITO, Ward-II(1), Bathinda, vide his ‘reasons to believe’, dated 24.03.2017.
Our attention was drawn by the ld. A.R to the respective “reasons to believe” recorded by the aforementioned officers, as well as the addition made by the A.O, i.e, the ITO, Ward-1(3), Bathinda while framing the assessment u/s 143(3) r.w.s 147, dated 22.11.2017. In sum and substance, it was the claim of the ld. A.R, that as the A.O had failed to make any addition qua the “reason” on the basis of which he had reopened the case of the assessee, therefore, the assessment order passed by him u/s 143(3) r.w.s 147, dated 22.11.2017 could not be sustained and was 11 Sh. Ramesh Kumar Vs. ITO, Ward-1(3), Bathinda A.Y 2010-11 liable to be vacated. Apart from that, the ld. A.R had assailed the addition made by the A.O on merits.
Per Contra, the ld. Departmental representative supported the orders of the lower authorities. It was submitted by the ld. D.R that as the A.O had validly assumed jurisdiction and framed the assessment vide his order passed u/s. 143(3) r.w.s 147, dated 22.11.2017, therefore, no infirmity did emerge therefrom. Rebutting the claim of the ld. A.R that the A.O had obtained the requisite sanction u/s 151 from the Pr. CIT on 29.03.2017, i.e, subsequent to the issuance of Notice u/s 148, dated 24.03.2017, it was submitted by the ld. D.R that the said claim was based on misconceived facts. Elaborating on his aforesaid contention, it was submitted by the ld. D.R that the approval u/s 151 of the Act, dated 29.03.2017 was in context of the reopening of the assessee’s case by the earlier A.O, i.e, the ITO, Ward-II(1), Bathinda, who had initiated the reassessment proceedings by recording the requisite “reasons to believe”, dated 24.03.2017 (Page 3 of “APB”). It was submitted by the ld. D.R, that the ITO, Ward-II(1) subsequent to obtaining the requisite sanction u/s 151 from the Pr. CIT, Bathinda on 29.03.2017, had issued the Notice u/s 148, dated 29.03.2017
12 Sh. Ramesh Kumar Vs. ITO, Ward-1(3), Bathinda A.Y 2010-11 (Page 1 of “APB”). On being confronted with the fact that the A.O passing the order u/s 143(3) r.w.s 147, dated 22.11.2017, i.e, the ITO, Ward-1(3), Bathinda had categorically stated in his assessment order that the Notice u/s 148 was issued to the assessee on 29.03.2017 with the prior approval of the Pr. CIT, Bathinda vide his office letter No. Pr.
CIT/BTI/Tech/151/2016-17/3749, dated 29.03.2017, it was submitted by the ld. D.R that the said approval was given in context of the “reasons to believe”, dated 24.03.2017 recorded by the ITO, Ward II(1), Bathinda, on the basis of which the latter had thereafter issued Notice u/s 148, dated 29.03.2017. On a further query by the bench as to whether the ITO, Ward- 1(3), Bathinda, i.e, the jurisdictional A.O who had framed the assessment u/s 143(3) r.w.s 147, dated 22.11.2017 had prior to issuance of the Notice u/s 148, dated 24.03.2017 obtained the statutory sanction of the prescribed authority, i.e, the Pr. CIT, Bathinda, as envisaged in Sec. 151 of the Act, the ld. D.R failed to reply to the same. It was, however, submitted by the ld. D.R, that the A.O framing the assessment had validly assumed jurisdiction and, reopened the case of the assessee and framed the assessment vide his order passed u/s 143(3) r.w.s 147, dated 22.11.2017.
Rebutting the claim of the ld. A.R, that the A.O having failed to make any 13 Sh. Ramesh Kumar Vs. ITO, Ward-1(3), Bathinda A.Y 2010-11 addition qua the “reason” on the basis of which he had reopened the case of the assessee, therefore, the assessment order therein passed by him u/s 143(3) r.w.s 147, dated 22.11.2017 could not be sustained and was liable to be vacated, it was submitted by the ld. D.R, that as the cash deposits of Rs. 34,13,125/- (supra) in the assessee’s bank account with State Bank Of Patiala, Branch : Grain Market, Bathinda, on the basis of which the case of the assessee was reopened u/s 147 of the Act, formed part of the sale consideration of Rs. 70,84,580/- (supra), therefore, it was incorrect on the part of the ld. A.R to claim that no addition was made w.r.t the reason on the basis of which the assessee’s case was reopened u/s 147 of the Act. In order to fortify his aforesaid contention the ld. D.R had taken us through the relevant extract of the “Cash book” that was filed by the assessee’s counsel in the course of hearing of the appeal before us.
We have heard the ld. Authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. As the assessee has assailed the validity of the jurisdiction
14 Sh. Ramesh Kumar Vs. ITO, Ward-1(3), Bathinda A.Y 2010-11 assumed by the A.O, viz. ITO, Ward-1(3), Bathinda for reopening the assessee’s case u/s 147 of the Act, therefore, we shall first deal with the same.
As is discernible from the records, the ITO, Ward-II(1), Bathinda, holding a belief that the sale consideration of Rs. 70,84,580/- received by the assessee on sale of his share of land, i.e, 194,3/8 part of the total sale transaction of Rs. 2.45 crore had escaped assessment, as the assessee had not filed his return of income for the year under consideration, thus, reopened his case u/s 147 of the Act by recording the “reasons to believe”, dated 24.03.2017. As can be gathered from the records, the A.O, i.e, ITO, Ward-II(1), Bathinda had as on 29.03.2017 obtained the requisite sanction u/s 151 of the Act from the Pr. CIT, Bathinda, and had thereafter issued the Notice u/s 148, dated 29.03.2017. Admittedly, the ITO, Ward-II(1), Bathinda had prima facie complied with the requisite conditions for reopening the case of the assessee u/s 147 of the Act, but the fact that he was not vested with the jurisdiction over the case of the assessee, was a bottle neck in framing of the assessment by him, therefore, the case records of the assessee, as stated by him in his aforesaid letter dated
15 Sh. Ramesh Kumar Vs. ITO, Ward-1(3), Bathinda A.Y 2010-11 16.08.2017 (supra), were transferred to the ITO, Ward-1(3), Bathinda, i.e, the A.O having jurisdiction in the case of the assessee. Accordingly, as noticed and purposively culled out by us hereinabove, the ITO, Ward-II(1), Bathinda, vide his order dated 16.08.2017 (supra), while disposing off the objections of the assessee qua the reasons recorded u/s 147 of the Act, had observed, that the case as per the request of the assessee was being transferred to the ITO, Ward-1(3), Bathinda a/w the requisite information available with his office, vide a letter No. 547, dated 08.08.2017, and had further directed that both the files available with the officers be clubbed for framing the assessment. Thereafter, as is the fact borne from the record, the ITO, Ward-1(3), Bathinda, i.e, the A.O having jurisdiction over the case of the assessee, had thereafter framed the assessment vide his order passed u/s 143(3) r.w.s 147, dated 22.11.2017. Admittedly, the ITO, Ward-1(3), Bathinda had after recording his “reasons to believe”, dated 14.03.2017 (Page 7 of “APB) had issued a Notice u/s 148, dated 24.03.2017 (Page 6 of “APB”). Although in the Notice u/s 148, dated 24.03.2017, it is mentioned that the prior approval for issue of Notice u/s 148 had been obtained from the Pr. CIT, Bathinda, however, neither any reference of having obtained the said approval is discernible from the 16 Sh. Ramesh Kumar Vs. ITO, Ward-1(3), Bathinda A.Y 2010-11 assessment order, nor anything in support thereof was placed on our record by the ld. D.R. In fact, as observed by us hereinabove, the A.O, i.e the ITO, Ward-1(3), Bathinda, in his order passed u/s 143(3) r.w.s 147, dated 22.11.2017, had referred about the approval that was obtained from the Pr. CIT, Bathinda vide the latter’s office letter No. Pr. CIT/BTI/Tech /151/2016-17/3749, dated 29.03.2017. However, as observed by us hereinabove, i.e, while rebutting the claim of the ld. A.R that the ITO, Ward-1(3), Bathinda had issued the Notice u/s 148 of the Act on 24.03.2017, i.e, prior to obtaining of the approval u/s 151 by him on 29.03.2017, we had noticed that the said approval was in context of the Notice u/s 148, dated 29.03.2017 that was issued by the ITO, Ward-II(1), Bathinda. As the fact as regards the obtaining of the approval by the A.O, i.e, ITO, Ward-1(3), Bathinda could not be gathered from the body of the assessment order, therefore, in all fairness the ld. D.R was directed to produce the assessment record. On the next date of hearing of the appeal, the ld. D.R, as directed, produced the assessment records. After perusing the assessment records, the case of the revenue was not placed on any better footing, as we failed to come across any approval obtained by the A.O, i.e ITO, Ward-1(3), Bathinda from the sanctioning authority, i.e, the 17 Sh. Ramesh Kumar Vs. ITO, Ward-1(3), Bathinda A.Y 2010-11 Pr. CIT, Bathinda. On being confronted with the said factual position the ld. D.R could not rebut the same. Only claim of the ld. D.R, as it earlier was, that the A.O, i.e. ITO, Ward-1(3), Bathinda must have obtained the requisite sanction from the Pr. CIT, Bathinda, i.e, prior to issuing the Notice u/s 148, dated 24.03.2017.
As we have perused the assessment records and, no material is discernible therefrom which would support the claim of the ld. D.R that the A.O, i.e. ITO, Ward-1(3), Bathinda, prior to issuance of Notice u/s 148 had obtained the requisite sanction from the Pr. CIT, Bathinda, therefore, we are constrained to proceed with on the said factual matrix. Admittedly, the assessment order passed by the ITO, Ward 1(3), Bathinda u/s 143(3) r.w.s 147, dated 22.11.2017 only makes a reference of the sanction obtained from the Pr. CIT, Bathinda vide his office letter No. Pr. CIT/BTI/Tech /151/2016-17/3749, dated 29.03.2017. Although, at the first blush, the reference of the aforesaid sanction of the Pr. CIT, dated 29.03.2017 in the body of the assessment order passed u/s 143(3) r.w.s 147, dated 22.11.2017 by the ITO, Ward-1(3), Bathinda, as claimed by the ld. A.R, would appear to be in context of the reopening of the assessee’s case by 18 Sh. Ramesh Kumar Vs. ITO, Ward-1(3), Bathinda A.Y 2010-11 the A.O framing the assessment, i.e, ITO, Ward-1(3), Bathinda, but after considering the facts as are discernible from the records, we are of the considered view that the same is in context of the Notice u/s 148, dated 29.03.2017 that was issued by the ITO, Ward-II(1), Bathinda. Backed by the aforesaid facts, we hold a conviction that there can be two set of situations possible in the case before us, viz. (i). that the A.O, i.e, ITO, Ward 1(3), Bathinda, i.e the A.O having jurisdiction over the case of the assessee had failed to obtain the requisite sanction u/s 151 of the Act from the Pr. CIT, Bathinda qua his ‘reasons to believe’, dated 14.03.2017, and had issued the Notice u/s 148, dated 24.03.2017 ; or (ii) that the A.O, i.e, ITO, Ward 1(3), Bathinda had proceeded with on the basis of the sanction u/s 151, dated 29.03.2017 that was obtained by the ITO, Ward-II(1), Bathinda, and dispensing with the statutory requirement of obtaining any separate sanction qua the ‘reasons to believe’, dated 14.03.2017, that were recorded by him, had issued Notice u/s 148, dated 24.03.2017 and framed the assessment vide his order passed u/s 143(3) r.w.s 147, dated 22.11.2017. In either of the situations the assumption of jurisdiction by the A.O, i.e, ITO, Ward-I(3), Bathinda, de hors obtaining of the requisite sanction u/s 151 of the Act, would be devoid and bereft of any force of 19 Sh. Ramesh Kumar Vs. ITO, Ward-1(3), Bathinda A.Y 2010-11 law. A far fetched situation that had been canvassed by the ld. A.R before us, i.e, the ITO, Ward-I(3), Bathinda had pre-empted the grant of sanction by the Pr. CIT, Bathinda u/s 151 of the Act, and prior to obtaining of the same on 29.03.2017 issued the Notice u/s 148, dated 24.03.2017, though being beyond comprehension had been rejected by us, but then, if that be so, then too the assumption of jurisdiction by the A.O, i.e, issuance of Notice u/s 148, dated 24.03.2017 without obtaining the requisite sanction u/s 151 of the Act, i.e, prior to issuance of the said notice would be bad in the eyes of law. Be that as it may, we are of the considered view, that as the A.O in the present case before us had failed to obtain the approval of the prescribed authority as contemplated u/s 151 of the Act, i.e, qua the ‘reasons to believe’ recorded by him on 14.03.2017, that it is a fit case for issuance of Notice u/s 148 of the Act, therefore, he had wrongly assumed jurisdiction and de hors satisfaction of the aforesaid statutory requirement issued Notice u/s 148, dated 24.03.2017 and framed the assessment u/s 143(3) r.w.s 147, dated 22.11.2017. We, thus, in terms of our aforesaid observations hold the Notice u/s 148, dated 24.03.2017 issued by the A.O, i.e, ITO, Ward-1(3), Bathinda as invalid in the eyes of law and quash the assessment framed by him u/s 143(3) r.w.s 147, dated 22.11.2017.
20 Sh. Ramesh Kumar Vs. ITO, Ward-1(3), Bathinda A.Y 2010-11 Accordingly, the order passed by the CIT(A) is set-aside and, the assessment framed by the A.O u/s 143(3) r.w.s 147 of the Act, dated 22.11.2017 is quashed for want of valid assumption of jurisdiction by him.
As we have in terms of our aforesaid observations quashed the assessment framed by the A.O u/s 143(3) r.w.s 147, dated 22.11.2017, for want of jurisdiction on his part, therefore, we refrain from adverting to and therein adjudicating the other contentions so raised by him as regards the validity of the jurisdiction assumed by the A.O for framing the impugned assessment, as well as those advanced by him as regards the sustainability of the addition on the merits of the case, which, thus, are left open.
Resultantly, the appeal filed by the assessee is allowed in terms of our aforesaid observations.
Order pronounced under rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1962, by placing the details on the notice board.