TaxTMI 
TaxTMI 
TaxTMI 
2022 (2) TMI 1094
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.... Laxmi Trading Company (LTC) and petitioner held the balance 15% interest in LTC. During the previous year relevant to the assessment year 2006-2007, LTC gave an advance of Rs. 1,25,00,000/- to P&A on behalf of Shivum. The accumulated profits of Shivum as on 31st March 2006 were Rs. 3,38,53,410/-. 2. On 29th July 2006 petitioner filed return of income for Assessment Year 2006-2007. An assessment order dated 25th November 2008 came to be passed under Section 143(3) of the Income Tax Act, 1961 (the said Act). In the meanwhile, an assessment order dated 20th June 2008 under Section 143(3) of the said Act came to be passed in the case of P&A holding that the amount advanced by LTC on behalf of Shivum to P&A constituted dividend in the hands of P&A under Section 2(22)(e) of the said Act. 3. On 17th February 2009 Commissioner of Income Tax (Appeals) [CIT(A)] decided P&A's appeal against the Revenue holding that addition under Section 2(22)(e) cannot be made in the hands of P&A since P&A was not a shareholder of Shivum. The other contentions of P&A challenging the correctness of the treatment of the amounts advanced as dividend were not adjudicated. The view of CIT(A) was not accepted b....
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....ions of petitioner but later, on or about 13th December 2013, transferred the case records of petitioner to respondent no.1 in Mumbai, who is the Jurisdictional Assessing Officer (JAO) of petitioner. 7. Respondent no.1, thereafter, issued a notice dated 10th January 2014 under Section 148 of the said Act to petitioner stating that he has reasons to believe that income chargeable to tax for Assessment year 2006- 2007 has escaped assessment within the meaning of Section 147 read with Section 150 of the said Act. In the said notice, it is also stated that the notice is issued under Section 148 read with Section 150 in view of the decision of the Hon'ble High Court, New Delhi in ITA No.1436 of 2010 dated 11th May 2011. Respondent no.1 subsequently also provided petitioner with the reasons for reopening the assessment recorded on 9th January 2014. The reasons were provided alongwith notice dated 27th January 2014 under Section 143(2) of the said Act. By a communication dated 4th February 2014 through his Chartered Accountants, petitioner objected to the validity of the notice. By an order dated 7th February 2014, the objections were rejected by respondent no.1. 8. Mr. Pardiwall....
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....essing Officer at Mumbai, the time limit of six years, as per Section 149 of the said Act, had already elapsed because of which respondent no.1 recorded fresh reasons and issued a fresh notice under Section 148 of the said Act dated 14th January 2014 well beyond six years. Therefore, the notice issued by the Assessing Officer at Mumbai was independent of the notice issued by the Assessing Officer at New Delhi and, therefore, the validity thereof has to be decided independently. In such circumstances, the notice must be held to be barred by limitation; (i) no sanction has been accorded before issuance of notice by the Assessing Officer at Mumbai under Section 151 of the said Act and, therefore, the impugned notice is invalid; (j) even the sanction issued to the Assessing Officer at New Delhi was invalid because the approval has been obtained from Additional Commissioner of Income Tax whereas, the approval ought to have been accorded by the Commissioner of Income Tax since the notice dated 22nd March 2013 was issued after a period of four years from the end of the relevant assessment year. As held in the case of Miranda Tools (P.) Ltd. V/s. Income Tax Officer (2020) 114 ta....
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.... or revision or by a Court in any proceeding under any other law. Hence, reassessment proceedings can be initiated by respondent no.1 even after March 2013; (d) since the reopening proceedings were initiated in view of directions of the Delhi High Court, there is no need to comply with the provisions of Section 151. 10. Having considered the rival submissions, we are satisfied that the notice dated 10th January 2014 impugned in this petition is barred by limitation since it is issued beyond a period of six years from the end of the relevant assessment year, the time limit prescribed under Section 149(1)(b) of the said Act. 11. Respondent is seeking to derive validity in view of Section 150 of the said Act. Section 150(1) reads as under : 150. Provision for cases where assessment is in pursuance of an order on appeal, etc. (1) Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal, referen....
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....ant Commissioner or other tribunals can issue under the powers conferred on him or them under the respective sections. Therefore, the expression "finding" as well as the expression "direction" can be given full meaning, namely, that the finding is a finding necessary for giving relief in respect of the assessment of the year in question and the direction is a direction which the appellate or revisional authority, as the case may be, is, empowered to give under the sections mentioned therein. The words "in consequence of or to give effect to" do not create any difficulty, for they have to be collated with, and cannot enlarge, the scope of the finding or direction under the proviso. If the scope is limited as aforesaid, the said words also must be related to the scope of the findings and directions". 14. In Rajinder Nath V/s. Commissioner of Income Tax (1979) 120 ITR 14 (SC), the Apex Court held as under : The expressions "finding" and "direction" are limited in meaning. A finding given in an appeal, revision or reference arising out of an assessment must be a finding necessary for the disposal of the particular case, that is to say, in respect of the particular assessee and in re....
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....t of petitioner. Therefore, none of the requirements of Section 150 are fulfilled. Therefore, Section 150 not being applicable to the matter at hand, it does not save the impugned notice from being barred by limitation. 16. Respondent's stand that the Assessing Officer at New Delhi had issued a notice under Section 148 of the said Act on petitioner on 22nd March 2013 before the limitation period expired and, therefore, the impugned notice issued by the Assessing Officer at Mumbai in continuation of the said proceedings must also be treated as valid and within time is misconceived. This is because we notice that the notice issued by the Assessing Officer at New Delhi itself was invalid and of no effect since it was issued by an officer who did not have jurisdiction over petitioner. We gather support from the case of Commissioner of Income Tax V/s. M.I. Builders (P.) Ltd. (Supra), the assessee had raised the objection with regard to continuation of the proceedings by Income Tax Officer - 1(I), Lucknow on the ground that the said proceedings are illegal as the notice under Section 148 of the said Act issued itself was devoid of proper jurisdiction and ab initio void. The Income Tax O....
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....ew Delhi. The notice issued by the Assessing Officer at New Delhi was after obtaining approval of Additional Commissioner of Income Tax, Range-14, New Delhi. Even that notice is invalid because the notice dated 22nd March 2013 was issued after a period of four years from the end of the relevant assessment year and, therefore, sanction ought to have been accorded by the Commissioner of Income Tax. The sanction accorded by the Additional Commissioner of Income Tax, therefore, would render the notice issued by the Assessing Officer at New Delhi itself bad in law and without jurisdiction. A Division Bench of this Court in Miranda Tools (P.) Ltd. V/s. Income Tax Officer (Supra) in paragraph 9 has held as under : 9. The next question arises is whether the sanction granted by the Chief Commissioner of Income Tax would fulfill the requirement of section 151. It is long been settled that when the statute mandates the satisfaction of a particular authority for the exercise of power then it has to be done in that manner only. Adopting this principle, the Division Benches of this Court in the case of Ghanshyam K. Khabrani v. Asst. CIT (2013) 34 taxmann.com 300 (Bombay) and CIT v. Aquatic Rem....
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....or that the proviso could be read or construed as amending those sections conferring on those bodies wider or different powers or jurisdiction. Learned counsel for the department expressly disclaimed any such submission. Therefore, the scope of the proviso cannot ordinarily exceed the scope of the jurisdiction conferred on an authority under the said provisions. (emphasis supplied) 20. Therefore, for a moment, even if accept Revenue's contention that the present proceedings are continuation of the proceedings initiated by the Assessing Officer at New Delhi vide notice dated 22nd March 2013, the proceedings would be invalid since the notice issued by the Assessing Officer at New Delhi itself was invalid inasmuch as sanction of the appropriate authority as per Section 151 was not obtained before issuing the notice. 21. On the submissions of Mr. Pardiwalla that respondent had issued impugned notice under Section 148 relying on the Delhi High Court order and judgment despite agitating the conclusion of the Delhi High Court before the Apex Court, Mr. Suresh Kumar submitted that an SLP has been filed against the decision of the Delhi High Court to cover the contingency of an adverse o....
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.... believe that income has escaped assessment. To accept the contention of the Revenue in the present case would be to allow a reopening of an assessment under Section 148 on the ground that the Assessing Officer is of the opinion that a contingency may arise in future resulting an escapement of income. That would, in our view, be wholly impermissible and would amount to a rewriting of the statutory provision. Moreover, the reliance which is sought to be placed on the provisions of Explanation 2(a) to Section 147 is misconceived. Explanation 2 provides a deeming definition of cases where income chargeable to tax has escaped assessment and clause (a) includes a case where no return of income has been furnished by the assessee although his income or the income of any other person in respect of which he is assessable exceeds the maximum amount which is not chargeable to tax. As the reasons which have been disclosed to the assessee would indicate, this is not a case where an assessee has not filed a return of income simplicitor. The whole basis of the reopening is on the hypothesis that if the provisions of Sections 61 to 63 are attracted as has been claimed by the assessee, and the in....