2024 (12) TMI 114
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..... 3. That the order passed is bad in law in as much as it has been passed by violating the principles of natural justice as despite specific request for granting more time, the same was negated and the appeal was decided ex-parte." 3. Briefly the facts of the case are that the assessee originally filed its return of income on 30/11/2015 declaring total income of Rs. 54,81,240/-. The case of the assessee was taken up for scrutiny and thereafter, assessment proceedings were completed under section 143(3) vide order dt. 27/03/2017 accepting the returned income. Thereafter, basis information received from the Investigation Wing, the AO observed that the assessee has done transactions in equity / derivative trading and generated BSE Currency Derivative fictitious losses in equity / derivative trading via broker, M/s Master Capital services Ltd. As per AO, the assessee has claimed to generate losses of speculative trades amounting to Rs. 3,78,93,875/- which are actually fictitious profits and the objective of the assessee was to bring the unaccounted income into books without payment of tax. The AO accordingly stated that the income to the extent of Rs. 3,78,93,875/- has escaped asses....
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....at since the notice so issued on 30/03/2021 has been issued after the expiry of four years from the end of the assessment year under consideration, in terms of provision of Section 151 of the Act, the competent authority to grant the sanction for issue of notice under Section 148 is Principal Commissioner or Chief Commissioner or Principal Chief Commissioner or Commissioner. However in the instant case, admittedly the approval has been obtained by the AO from and sanctioned by JCIT Range-1, Ludhiana. It was accordingly submitted that in view of the lack of approval from the competent authority, the very initiation of proceedings under section 147 are vitiated and are bad in law and therefore the subsequent proceedings also deserves to be quashed. 7. In this regard, our reference was drawn to the submissions dt. 28/02/2022 filed before the AO wherein the assessee has submitted that while issuing notice under section 148 dt. 30/03/2021 for A.Y. 2015-16, four years had already lapsed from the end of the relevant assessment year and as such the approval under section 151 was required from CIT/CCIT instead of from Joint/ Additional CIT and therefore the notice so issued under section 1....
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....r Ltd. Vs. Asst. CIT (2018) 400 ITR 397. 11. The Ld. CIT/DR is heard who has relied on the reasons so recorded and the order so passed by the AO. Regarding sanction of the competent authority under section 151, the Ld. CIT DR submitted that it is not in dispute that the notice u/s 148 has been issued after the expiry of four years from the end of the impugned assessment year and as far as the authority which has granted the necessary sanction u/s 151, it was submitted that the assessment record needs to be examined to verify the particulars of the authority who has actually granted the necessary sanction. 12. In his rejoinder, the Ld. AR submitted that there is no dispute in this regard as the AO in the reasons so recorded has talked about getting the sanction from JCIT, Range -1 Ludhiana. Further, he furnished and placed on record, a copy of the said approval under section 151 granted by the JCIT, Range-1, Ludhiana dt. 30/03/2021 and it was submitted that in view of the same, there doesn't remain any dispute that the approval under section 151 has been granted by the JCIT Range-1, Ludhiana and in view of the same, the very initiation of proceedings under Section 147 is vitiated ....
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....t case, provision of sub-section (1) of Section 151 are applicable as the notice has been issued on 30/03/2021 after the expiry of period of four years from end of the relevant assessment year 2015-16 which expires on 31/03/2020, therefore, in such a case, the competent authority to grant the sanction u/s 151 is PCCIT, CCIT, Pr.CIT or Commissioner. 16. In the instant case, it is an admitted and undisputed fact that the AO has sought sanction for issue of notice from the JCIT vide proposal dt. 30/03/2021 enclosing copy of the reasons so recorded and the approval has been granted by the JCIT Range-1, Ludhiana stating that she was satisfied with the reasons recorded by the AO that it is a fit case for issuance of notice u/s 148 of the Act on the same date vide DIN & Doc No. ITBA/AST/S/118/2020-21/1031915722(1) dt. 30/03/2021. We therefore find that the approval from the competent authority as so prescribed before the issue of notice under section 148 has not been obtained in the instant case and therefore, the very initiation of proceeding under section 147 stands vitiated. 17. In this regard, we refer to the decision of the Hon'ble Allahabad High Court in case of Dr. Shashi Kant Ga....
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....t it is a fit case for reopening. Therefore, the satisfaction of the Chief Commissioner or the Commissioner is a sine- qua- non before issuance of a notice under section 148 by the AO. It was held that the AO may be of the rank of an Income Tax Officer or the Assistant Commissioner or the Deputy Commissioner, but when such notice is to be issued after the expiry of four years after the end of the relevant assessment year, the sanction of the Chief Commissioner or the Commissioner is a pre- condition and it was accordingly held in the said case that the notice issued under section 148 beyond four years after the end of the relevant assessment year is bad in law in as much as the sanction of the Chief Commissioner or the Commissioner was not obtained before issuance of the notice. 19. Similar legal proposition has been laid down by the Hon'ble Orissa High Court in case of Ambika Iron and Steel Pvt. Ltd. (supra). Similarly, in case of Maruti Clean Coal and Power Ltd. (supra), the Hon'ble Chhattisgarh High Court referring to the provisions of Section 151 states that the said provision specifically deals with the Chief Commissioner or the Commissioner to be satisfied on the reasons rec....