CIT v. SPLs Siddhartha Ltd. - Taxpublishers.in

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The Tax Publishers2012 TaxPub(DT) 1806 (Del-HC) : (2012) 249 CTR 0357 : (2012) 070 DTR 0133 INCOME TAX 1961 --Reassessment--Validity of notice after time-limitApproval of competent authority--Notice under section 147 read with section 148 was issued for reassessment after the expiry of four years from the end of the relevant assessment year. Assessee contended that approval was not granted by the Joint Commissioner as required under section 151(1). Instead it was taken from the CIT, who was not competent to approve even when he was a higher authority than the competent authority. Revenue contended that the matter was routed through additional CIT and, therefore, it should be treated that Additional Commissioner had granted the requisite sanction. Held: </i.The Additional CIT did not apply his mind or gave any sanction. Instead, he requested Commissioner to accord the approval. Thus, it could not be said any rectifiable irregularity under section 292B. Hence, reassessment proceedings were quashed. Income Tax Act, 1961, Section 148 IN THE DELHI HIGH COURT A.K. SIKRI SIDDHARTHA MRIDUL CIT v. SPLS Siddhartha Ltd. ITA No. 836 of 2011 14 September, 2011 JUDGEMENT *A.K. Sikri, J.* 1. The notice issued by the assessing officer under section 147 read with section 148 of the Income Tax Act (hereinafter referred to as the Act) for reopening the assessment for the assessment year 2002-03 has been set aside by the Income Tax Appellate Tribunal (the Tribunal for brevity) on the ground that the requisite approval of Additional Commissioner of Income Tax, which is mandatorily required, was not taken. Income tax return in this case was filed on 26-9-2002 at the loss of Rs. 27.63 lacs. The same was processed under section 143(1) on 26-2-2003. Thereafter, notice under section 147 read with section 148 of the Act for reassessment was issued on 12-3-2009. This was much after the expiry of four years from the end of the relevant assessment year. The basis for issuance of the notice was that the inquiries conducted by Investment Wing of the Department had revealed that Mr. Dipak Gupta was indulging in providing the accommodation entries and he had admitted that he had taken cash from various parties and given them Demand Drafts/Cheques by charging commission. DDs/Cheques then were introduced as share capital or loan in their books of accounts. On that basis, it was alleged that insofar as the assessee is concerned, three bogus parties had given accommodation entries for a total sum of Rs.5 lacs. Since four years had elapsed, the assessing officer was required to take approval of the Competent Authority under section 151 (1) of the Act. This provision reads as under: SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2012 TaxPub(DT) 1806 (Del-HC) : (2012) 249 CTR 0357 : (2012) 070 DTR 0133

INCOME TAX 1961

--Reassessment--Validity of notice after time-limitApproval of competent authority--Notice under section 147 read with section 148 was issued for reassessment after the expiry of four years from the end of the relevant assessment year. Assessee contended that approval was not granted by the Joint Commissioner as required under section 151(1). Instead it was taken from the CIT, who was not competent to approve even when he was a higher authority than the competent authority. Revenue contended that the matter was routed through additional CIT and, therefore, it should be treated that Additional Commissioner had granted the requisite sanction. Held: </i.The Additional CIT did not apply his mind or gave any sanction. Instead, he requested Commissioner to accord the approval. Thus, it could not be said any rectifiable irregularity under section 292B. Hence, reassessment proceedings were quashed.

Income Tax Act, 1961, Section 148

IN THE DELHI HIGH COURT

A.K. SIKRI SIDDHARTHA MRIDUL

CIT v. SPLS Siddhartha Ltd.

ITA No. 836 of 2011

14 September, 2011

JUDGEMENT

A.K. Sikri, J.

1. The notice issued by the assessing officer under section 147 read with section 148 of the Income Tax Act (hereinafter referred to as the Act) for reopening the assessment for the assessment year 2002-03 has been set aside by the Income Tax Appellate Tribunal (the Tribunal for brevity) on the ground that the requisite approval of Additional Commissioner of Income Tax, which is mandatorily required, was not taken. Income tax return in this case was filed on 26-9-2002 at the loss of Rs. 27.63 lacs. The same was processed under section 143(1) on 26-2-2003. Thereafter, notice under section 147 read with section 148 of the Act for reassessment was issued on 12-3-2009. This was much after the expiry of four years from the end of the relevant assessment year. The basis for issuance of the notice was that the inquiries conducted by Investment Wing of the Department had revealed that Mr. Dipak Gupta was indulging in providing the accommodation entries and he had admitted that he had taken cash from various parties and given them Demand Drafts/Cheques by charging commission. DDs/Cheques then were introduced as share capital or loan in their books of accounts. On that basis, it was alleged that insofar as the assessee is concerned, three bogus parties had given accommodation entries for a total sum of Rs.5 lacs. Since four years had elapsed, the assessing officer was required to take approval of the Competent Authority under section 151 (1) of the Act. This provision reads as under: