2022 (3) TMI 1388 - HC - Income Tax

Court scrutinizes case reopening without approval, highlights procedural lapses & CBDT instructions breach under

The court addressed the issue of reopening a case without the Chief Commissioner's prior approval, emphasizing procedural lapses in not following CBDT ... Reopening of assessment u/s 147 - As contented that the exercise of reopening in the present case is not in consonance with the instructions dated 04.03.2021 issued by the CBDT and further clarified on 12.03.2021 inasmuch as the prior approval of the Chief Commissioner, Income tax had not been accorded - HELD THAT:- As asserted that as per the afore-noticed instructions the CCIT was enjoined to call for the list of the potential cases along with details and evidences from the Subordinate Authorities and thereafter upon careful examination was to suggest to the A.O. the potential cases to be taken for consideration for action u/s148 - Still further subsequent to the issuance of notice under Section 148 of the Act, the A.O. was required to upload all the underlying/relevant documents relied upon as also the satisfaction recorded. It is the categoric submission made by counsel that such procedure has been given a complete go-by. Reliance has also been placed upon judgment of the Apex Court in UCO Bank vs. Commissioner of Income Tax [1999 (5) TMI 3 - SUPREME COURT] to argue that the circulars issued under Section 119(1) of the Act would have binding effect and are enforceable. Notice of motion returnable for 18.07.2022. Further proceedings in the meanwhile shall be kept in abeyance. Issues:1. Reopening of case without prior approval of Chief Commissioner, Income Tax.2. Alleged non-compliance with instructions issued by the CBDT.3. Reliance on circulars issued under Section 119(1) of the Act.Analysis:1. The judgment addresses the issue of reopening a case without the prior approval of the Chief Commissioner, Income Tax. The petitioner contends that the exercise of reopening in the present case does not align with the instructions issued by the CBDT. The petitioner argues that according to the instructions, the Chief Commissioner, Income Tax was required to call for a list of potential cases with details and evidence from Subordinate Authorities. Subsequently, after careful examination, the Chief Commissioner was to suggest potential cases for consideration under Section 148 of the Act. The petitioner asserts that this procedure was not followed in the present case, highlighting a procedural lapse.2. The judgment also discusses the alleged non-compliance with the instructions issued by the CBDT. The petitioner emphasizes that after the issuance of a notice under Section 148 of the Act, the Assessing Officer (A.O.) was required to upload all underlying documents and the satisfaction recorded. The petitioner argues that this procedural requirement was not adhered to in the present case. The petitioner relies on the judgment of the Apex Court in UCO Bank vs. Commissioner of Income Tax to support the argument that circulars issued under Section 119(1) of the Act have a binding effect and are enforceable.3. Furthermore, the judgment touches upon the issue of reliance on circulars issued under Section 119(1) of the Act. The petitioner argues that these circulars have a binding effect and should be enforced. The petitioner's submission is supported by the judgment referenced in the case. The court has scheduled a notice of motion returnable for a specific date and ordered that further proceedings be kept in abeyance until then. The case is also to be listed along with another related case for further consideration.