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IN THE HIGH COURT OF DELHI
Manmohan, Navin Chawla, JJ.
Pr. Commissioner of Income Tax (Central) - Appellant
Versus
Suresh Kumar Gupta - Respondent
ITA 1 of 2020 & CM Appl. 40 of 2020, ITA 1000 of 2019 & CM Appl. 40 of 2020, ITA 1018 of 2019 & CM Appl. 55079 of 2019 and ITA 1024 of 2019 & CM Appl. 55466 of 2019
Decided On : 15-07-2021
The necessity for obtaining sanction from the Joint Commissioner instead of the CIT for reopening assessments under Section 151 was emphasized, invalidating notices issued otherwise.
Headnote:(A) Income Tax Act, 1961 - Section 151 - Challenge to reopening of assessment based on incorrect sanctioning authority - The court reaffirmed that for reopening assessments, the sanction must be obtained from the Joint Commissioner, not the CIT; sanction obtained from CIT rendered notices invalid. (Paras 18-20)
(B) Legal principles - The appellate court emphasized that statutory provisions must be adhered to strictly; any deviation undermining jurisdiction invalidates subsequent actions, reinforcing the principle of legality in administrative actions. (Paras 6-8)
Facts of the case:
The appellant challenged the ITAT's order quashing notices issued under Section 148 for failing to obtain proper sanction, arguing the initial assessments were conducted under Section 143(1).
Findings of Court:
The assessment orders were deemed unsustainable due to incorrect sanction; thus, the appeals from the assessing officer were dismissed.
Issues: The main issues included whether the satisfaction of the CIT versus Joint Commissioner was adequate for issuing notices under Section 148.
Ratio Decidendi: The court maintained that adherence to procedural correctness is vital, and any failure to obtain the proper sanction negates the legality of the administrative actions taken.
Result: Appeals of the assessee allowed; appeals of the assessing officer dismissed.
| Table of Content |
|---|
| 1. court procedures during video conferencing. (Para 1 , 2 , 3) |
| 2. appellant challenges itat's common order. (Para 4) |
| 3. arguments regarding sanction and authority. (Para 6 , 7) |
| 4. court dismisses appeals based on argument inconsistency. (Para 9 , 10) |
JUDGMENT
Manmohan, J.: (Oral)--The appeals have been heard by way of video conferencing.
2. Registry is directed to list connected appeals being ITA Nos.1000/2019, 1018/2019 and 1024/2019 today itself along with the present appeal.
3. With consent of learned counsel for the appellant, the present appeals are taken up for hearing.
4. It is pertinent to mention that the present appeals have been filed challenging the common order dated 21st December, 2018 passed by ITAT in ITA Nos. 3879/Del/2015, ITA No.3877/Del/2015, ITA No.3880/Del/2015 and ITA No.3878/Del/2015. The relevant portion of the impugned order is reproduced hereinbelow:-
"16. We 1st deal with the appeal of the assessee with respect to the sanction granted by the learned CIT under section 151 of the INCOME TAX ACT . According to the provisions of section 151 which provides as under:
"151.Sanction for issue of notice.- (1) In a case where an assessment under sub-section (3) of section 143 or section 147 has been made for the relevant assessment year, no notice shall be issued under section 148 except by an Assessing Officer, who is below the rank of Assistant Commissioner or Deputy Commissioner, unless the Joint Commissioner is satisfied on the reasons recorded by such Assessing Officer that it is a fit case for the issue of such notice:
Provided that, after the expiry of four years from the end of the relevant assessment year, no such notice shall be issued unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer aforesaid, that it is a fit case for the issue of such notice.
(2) In a case other than a case falling under sub-section (1), no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of Joint Commissioner, after the expiry of four years from the end of the relevant assessment year, unless the Joint Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice.
Explanation-For the removal of doubts, it is hereby declared that the Joint Commissioner, the Principal Commissioner or Commissioner or the Principal Chief Commissioner or Chief Commissioner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice under section 148, need not issue such notice himself."
17. The relevant extracts of the various assessment year about the assessment are as under:-
| Sr. | A.Y | Returned Income | Assessed Income | Assessed under section | Date of Issue of Notice | Sanction obtained by | Reference of sanction mentioned by AO | Sanction should have been obtained by |
| 1 | 2004-05 | 450313 | 450313 | 143 (1) | 25/8/10 | CIT | Para No.2.4 of the order | Joint CIT |
| 2 | 2005-06 | 855600 | 855600 | 143 (1) | 25/8/10 | CIT | Para No.2.4 of the order | Joint CIT |
| 3 | 2006-07 | 945320 | 945320 | 143 (1) | 25/8/10 | CIT | Para No.2.4 of the order | Joint CIT |
| 4 | 2007-08 | 747140 | 747140 | 143 (1) | 25/8/10 | CIT | Para No.2.4 of the order | Joint CIT |
18. From the about table, it is apparent that the learned assessing officer has obtained the sanction by the learned CIT whereas the sanction should have been obtained of Joint Commissioner of Income Tax. Identical issue arose before the honourable Delhi High Court in case of CIT vs Soyuz Industrial Resources Ltd 58 taxmann.com 336 wherein the honourable High Court held as under:-
"xxx xxx xxx
6. A plain textual analysis of the above provisions would indicate the following:-
(i) Where the original assessment is a result of scrutiny assessment [ Section 143 (3)] or made in the course of re-assessment proceedings (Section 147) our taxes build a Nation - but within the initial period, Section 151 (I) applies. The competen
