Reopening based on inquiries conducted without the authority of law is Invalid

Shri Parmod Kumar Sahai Vs ITO (ITAT Delhi)

No reopening permissible on basis of invalid enquiry made under section 133 without approval of competent authority when no proceedings were pending

We have perused second paragraph of the assessment order which refers to the inquiry made by the Assessing Officer before issue of notice u/s 148 of Income Tax Act on 07.12.2007. The Assessing Officer, in the absence of any proceedings pending before him, has no authority to conduct any inquiry, except when prior permission has been taken by the Assessing Officer for conducting the inquiry u/s 133 of I.T. Act from the competent authority specified in second proviso to Section 133 of I.T. Act. There is nothing on record to show that the Assessing Officer had obtained prior approval of the competent authority specified in second proviso to 5.133 of I.T.Act. to undertake such inquiry. As noted in foregoing paragraph no. 8 of this order, the ld. DR had admitted that no proceedings were pending before the AO prior to issue of notice u/s 148 of I.T.Act. Thus, we find that the Assessing Officer has conducted inquiries without authority of law before issue of notice u/s 148 of I.T.Act. Thus, the assumption of jurisdiction by the AO u/s 147 of I.T.Act read with section 148 of I.T.Act is based on inquiries conducted without the authority of law. We are of the firm view that assumption of jurisdiction u/s 147 r.w.s. 148 of I.T.Act on the basis of inquiries conducted without the authority of law lacks legitimacy Assumption of jurisdiction must be held to be unauthorized, when the inquiries made for assuming the jurisdiction were unauthorized in law; and the assessment order passed in pursuance of unauthorized assumption of jurisdiction u/s 147 r.w.s. 148 of I.T. Act, also lacks legitimacy. On this ground also, the assessment order dated 22.12.2008 deserves to be annulled. With the annulment of assessment order, grounds 2 and 3 of appeal are merely academic, hence not decided.

10. In view of the discussion in foregoing paragraphs (9) and (9.1) of this order; we set aside the impugned order dated 23.08.2013 of Ld. CIT(A); and annul the aforesaid assessment order dated 22.12.2008. For statistical purposes, the appeal is allowed. Order pronounced in the open court on 20/12/2019

FULL TEXT OF THE ITAT JUDGEMENT

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