TaxTMI 
TaxTMI 
2021 (4) TMI 1002
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.... of notice u/s 148 were not supplied to the assessee. (ii) Sustaining the proceedings of section 147/148 as the Notice issued u/s 148 is without the mandatory sanction / approval of the Commissioner of the Income Tax, therefore it is without jurisdiction and proper authority of law as such is ab-initio void and the assessment completed on the basis of this notice is also ab-initio void. (iii) Sustaining the addition so made are purely illegal and against the law as the assessing officer himself rejected the books of account and for making additions relying on the same set of books of accounts. (iv) Sustaining the additions of Rs. 6,17,900/- on account of anonymous donation as the assessee explained the same during the course of assessment. (v) Sustaining the addition of Rs. 4,24,205/- on account of difference in cost of construction because the copy of valuation report was not provided to verify the alleged difference and addition made without confronting the valuation report to the assessee. (vi) Sustaining the addition of Rs. 445000/- on account of payment given for purchase of land. (vii) Sustaining the addition of Rs. 16,53,....
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....efore the ld. CIT(A) and also relied upon the written submissions filed before the Bench and the said is reproduced below: The Ld. A.O. initiated the action u/s 147 and issued notice u/s 148 on 25.03.2019. The assessee specifically requested the A.O. to supply the reasons for issue of notice u/s 148 vide letter dated 24.05.2019 which is available in the file of A.O., the copy of the same is attached herewith for ready reference of the Hon'ble Bench. It is once again requested vide letter 17.10.2019 which was served on the office of the A.O. on 18.10.2019, the copy of the letter dated 17.10.2019 and the proof of service are also attached herewith for ready reference of the Hon'ble Bench. From the perusal of the same the Hon'ble Bench will observe that the assessee made specific request and sought the reasons for reassessment, but the A.O. not supplied the reasons recorded for issue of notice u/s 148. In this connection it is worthwhile to submit that it is law of land that the reasons recorded for issue of notice u/s 148 are required to be supplied suo-moto to the assessee or he demands and if the same are not supplied then entire reassessment proceedings ....
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....e Ld. CIT(A) but not considered / appreciated in judicious manner. The Ld. A.O. in his remand report stated that the letter dated 17.10.2019 not served and also submitted the copy of Dak receipt register. In this connection it is stated that the submission of the Ld. A.O. is not correct, this letter was served on to the Ld. A.O., which is very well evident from the proof of service provided by the Courier agency, the copy of the same were submitted to the Ld. CIT(A) but not appreciated, the same are attached herewith for ready reference of the Hon'ble Bench. From the perusal of the same the Hon'ble Bench will observe that the submission of the Ld. A.O. is not correct. The findings of the Ld. CIT(A) is unjustified and also not in accordance with the law as well as various judicial pronouncements. It is need less to submit that the Judgment of the Hon'ble Supreme Court and the other higher courts are having binding nature on all the subordinate authorities. But here in this case this principle is also completely disobeyed. The Ld. CIT(A) not considered the evidences submitted by the assessee during the course of hearing. The assessee submitted the proof of ....
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....aipur on 27.03.2019 and the seal of office of ITO dated 27.03.2019 was there on this letter. This fact can be easy to understand in the following table:- Date Issued by whom Issued to whom Purpose 22.03.2019 online proposal The Income Tax Officer (Exemption), Ward-2, Jaipur Addl. Commissioner of Income Tax (Exemption), Jaipur For approval for issue of notice u/s 148. 22.03.2019 No.1079 Addl. Commissioner of Income Tax (Exemption), Jaipur Commissioner of Income Tax (Exemption), Jaipur Received on 22.03.2019 For approval u/s 151 on the reasons recorded by the A.O. 26.03.2019 No. 9548 Commissioner of Income Tax (Exemption), Jaipur Addl. Commissioner of Income Tax (Exemption), Jaipur Received on 26.03.2019 Conveying the approval 26.03.2019 No. 1093 Addl. Commissioner of Income Tax (Exemption), Jaipur Income Tax Officer (exemption),Ward-2, Jaipur Received on 27.03.2019 Giving the approval to the A.O. Therefore, this is very well established that the notice u/s 148 was issued on 25.03.2019 was without the approval/sanction of Commissioner of Income Tax, which is mandatory as per the provisions of section 151 of....
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....o then it goes to show that the mandate of section 151 of the Act was not followed in letter and spirit for the reasons mentioned hereinabove and also for the reason that prior to initiation of proceedings two conditions are necessary viz. satisfaction of the PCIT/CCIT/CIT that it is a fit case for issue of such notice and sanction of the notice is on the basis of satisfaction, the so impugned computer generated print out submitted by the Ld. A.O. lacks both these conditions. By merely pointing out "Approved" cannot be termed as satisfaction as it is a mandatory word of the section 151 of the Act. In other words it can safely be understood that the whole proceedings which are said to be carried out by the Ld. A.O. are in mechanical manner without there being any application or independent application of judicious mind by the concerned authority. The approval so given by the CIT (Exemption) for issue of notice u/s 148 is not in proper manner. The approval so given is purely a mechanical approval, without stating any reasoning behind that. The copy of the approval is being enclosed herewith for ready reference, from the perusal of the same, the Hon'ble Bench will ob....
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....d by the authorities below as well as cited before us and we have also gone through the orders passed by the revenue authorities. As per facts of the present case, the assessee is a Registered Society engaged in educational activities at Village Bhadhadhar, Distt. Sikar. The A.O. issued notice u/s 148 of the Act to the assessee on 25.03.2019. The reason for issue of notice u/s 148 is high value transactions with banking company, as mentioned in the assessment order. The assessee filed its return of income declaring total income of Rs. 128680/- on 24.05.2019 in compliance to the notice u/s 148. Thereafter notices u/s 143(2) and 142(1) were issued and replied by the assessee time to time. The A. O. also invoked the provisions of Section 145(3) of the Act and rejected the books of account of the assessee. After rejection of the books of account the A.O. made following additions and out of them some has been deleted by the Ld. CIT(A) tabulated as under :- S. No. Head of additions Addition by A.O. Amount Deleted by CIT(A) amount Sustained by CIT(A) Amount 1. anonymous donation shown as Corpus Donation. 6,17,900.00 - 6,17,900.00 2. difference in cash d....
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.... be provided has been settled by the Judgment of Hon'ble Delhi High Court as well as the Judgment of Hon'ble Supreme Court. The Hon'ble Supreme Court in case of Pr Commissioner of Income Tax V/s V. Ramaiah reported in 103 Taxmann.com 202 (SC) dismissed the SLP filed by the department against the Judgment of Hon'ble High Court. The Hon'ble High Court held that supply of reasons is mandatory and without supply of reasons the reassessment proceedings are liable to be quashed. The Hon'ble High Court upheld the order of the ITAT. The relevant Para of the Judgment of Hon'ble High Court are being reproduced here under :- "9. In the present case, admittedly, such reasons were not supplied to the assessee during the contemporary period before going ahead with the reassessment proceedings. Therefore, the Tribunal in our opinion was perfectly justified in quashing such reassessment order. 10. We do not find any substantial question of law arising in the matter. Therefore, the appeal of the Revenue stands dismissed. No costs." The Hon'ble Allahabad High Count in case of Mithilesh Kumar Tripathi V/s Commissioner of Income Tax and others reported in 280 ITR Page 16 (All) has....
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....Court make it clear that issuance of the notice and the communication and furnishing of reasons would go hand in hand. The reasons are to be supplied to the assessee before the expiry of period of 6 years. If it has not been done then validity u/s 148 could not be upheld. It is not in the income tax proceeding alone. In any proceedings say, civil or criminal, if a summon is issued to the defendant/ respondent, is not accompanied with the copy of plaint or complaint then it is to be construed that no valid service of notice has been effected upon the defendant or the respondents whichever may be the case. The notice could be served at any point of time before the expiry of 6 years, if AO has reasons to believe that income has escaped assessment but, such reasons are also to be communicated to the assessee before the expiry of the limitation otherwise validity of such notice could not be sustainable. Being a subordinate authority to the Hon'ble High Court, we are bound to follow the authoritative exposition of law at the end of Hon'ble High Court. In view of the above discussion, we allow ground No.2 of the assessee wherein he has pleaded that notice u/s 148 has not been served withi....
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....are unjustified and also not in accordance with the law as well as various judicial pronouncements. It is need less to submit that the Judgment of the Hon'ble Supreme Court and the other higher courts are having binding nature on all the subordinate authorities. But here in this case this principle has also been completely disobeyed. The Ld. CIT(A) had not considered the evidences submitted by the assessee during the course of hearing. The assessee submitted the proof of receipt of the letter sent in by placing on record the copy of receipts provided by the courier company, but the Ld. CIT(A) has completely brushed aside the evidences so submitted by the assessee and ld. CIT(A) also approved the act of the A.O., which is unjustified and contrary to the law. 12. We also observe that the A.O. has failed to provide the reasons despite the specific request of the assessee made to the A.O. twice, first just after filing of return u/s 148 and again during the course of assessment. It is needless to mention that without supply of reasons the entire assessment proceedings should be liable to be declared as illegal and bad in the eyes of law. 13. It has been submitted by the ld. AR th....
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....to the A.O. It was submitted that the notice u/s 148 issued on 25.03.2019 was without the approval/sanction of Commissioner of Income Tax, which is mandatory as per the provisions of section 151 of the Act. Here as per facts and documents in this case the Commissioner of Income Tax (Exemption) granted the approval on 26.03.2019 and communicated the same to the ITO on 27.03.2019 through proper channel. Therefore in this way, the notice issued on 25.03.2019 was without jurisdiction as well as without any sanction as required u/s 151. For acquiring the jurisdiction to issue notice u/s 148 the prior sanction / approval of the Commissioner of Income Tax is mandatory. 14. We observe from perusal of the record that the A.O. in his remand report submitted that the approval given by the Commissioner of Income Tax (Exemption), Jaipur before the date of issue of notice. In this respect, we have gone through the remand report dated 09/03/2020 submitted by the JCIT(Exemption) to the CIT(Appeal) and the contents of which are as under: "The assessee has also argued that notice u/s 148 was issued prior to receipt of sanction of competent authority u/s 151 of the Act. In this connect....
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....r the reason that prior to initiation of proceedings U/s 148 of the Act, necessary satisfaction of PCIT/CCIT/CIT was mandatorily required to the effect that it is a fit case for issuance of such notice. In the present case, impugned computer generated print out submitted by the A.O. lacks with the mandatory condition, in our view, by merely pointing out "Approved" cannot be termed as 'satisfaction' which is a mandatory requirement of Section 151 of the Act. In other words, it can safely be understood that the whole proceedings which are said to be carried out by the A.O., were carried out in 'mechanical manner' without there being any application or independent application of judicious mind by the concerned authorities. The approval so given by the ld. CIT (Exemption) for issuance of notice u/s 148 is not in accordance with law and the approval so given by the ld. CIT(E) was a mechanical approval without stating any reason for reaching to that conclusion. Since, the requirement for issuance of notice was not complied with, therefore, notice in the present case is required to be declared as void ab initio in absence of proper approval. We are of the considered view that only mention....
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....11. Section 151 of the Act clearly stipulates that the CIT(a), who is the competent authority to authorize the reassessment notice, has to apply his mind and form an opinion. The mere appending of the expression 'approved' says nothing. It is not as if the CIT(A) has to record elaborate reasons for agreeing with the noting put up. At the same time, satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner. In the present case, the exercise appears to have been ritualistic and formal rather than meaningful, which is the rationale for the safeguard of an approval by a higher ranking officer, for these reasons, the Court is satisfied that the findings by the ITAT cannot be disturbed." (B). Hon'ble High Court of Madhya Pradesh in the case of CIT vs. S. Goyanka Lime & Chemicals Ltd. reported in (2015) 56 taxmann.com 390 (MP) has held as under:- "7. We have considered the rival contentions and we find that while according sanction, the Joint Commissioner, Income Tax has only recorded so "Yes, I am Satisfied". In the case of Arjun Singh vs. Asstt. DIT (2000) 246 ITR 363 (MP), the same question has been considered by a Coordi....