Sunil Kumar Jain Vs ITO (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi, allowed the appeal of Sunil Kumar Jain for Assessment Year 2012-13 by quashing the reassessment proceedings initiated under Sections 147 and 148 of the Income-tax Act. The assessee, a Chartered Accountant carrying on his proprietorship concern, had originally filed his return of income declaring income from profession, capital gains and other sources. Subsequently, based on information received from the Investigation Wing, the Assessing Officer reopened the assessment alleging that the assessee had received commission for arranging accommodation entries for the Supreme Group through certain shell companies. The information also referred to statements recorded during investigation in which the assessee and his partner were stated to have admitted involvement in facilitating accommodation entries and earning commission therefrom. Pursuant to the notice under Section 148, the assessee filed a return declaring the same income as originally returned. The Tribunal noted that the assessee did not press the additional ground relating to the absence of a Document Identification Number (DIN) on the reassessment order. Instead, the dispute centred on the validity of the assumption of jurisdiction under Section 147.
On examining the reassessment records, the Tribunal observed that the recorded reasons did not quantify the income alleged to have escaped assessment and were undated. More importantly, the Tribunal accepted the assessee’s contention that the approval obtained under Section 151 of the Act had not been supplied along with the reasons recorded for reopening. Relying on the Delhi High Court judgment in Tia Enterprises Pvt. Ltd. v. ITO (468 ITR 5), the Tribunal held that the statutory approval under Section 151 forms part of the reassessment process and must be furnished to the assessee together with the recorded reasons. The Tribunal also noted that the Special Leave Petition filed against the Delhi High Court judgment had been dismissed by the Supreme Court in 468 ITR 10 (SC).
