Brief Facts of the Case and Question of Law
The brief facts of the case are that for Assessment Year (AY) 2002-03, the assessee had filed its returns in a normal course on 16.10.2002. The assessment was framed under Section 143(1). Based upon information received by the Assessing Officer (AO), a satisfaction note was recorded sometime in early 2009 and a notice was issued in 2009 i.e. four years beyond the end of the assessment year, under proviso to Section 147(1). The re-assessment proceedings were completed on 31.12.2009. The assessee in its appeal urged that the notice under Section 147 was unsustainable for the reason it was not approved by the competent authority in accordance with Section 151 of the Act.
Question of Law
Whether notice under section 148 can be issued by Commissioner who is ranked higher in authority than the required Joint Commissioner authority as mentioned in law?
Contention of the Assessee
The assesse submitted that neither assessment u/s 143 (3) nor u/s 147 was completed prior to issuance of notice u/s 148 of the Act. The notice u/s 148 of the Act was issued on 25.3.2009 i.e. four years beyond the end of the assessment year. Therefore u/s 151 (2) of the Act is applicable which states that “In a case other than a case falling under subsection (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.”
Hence the sanctioning authority as per section 151(2) of the Act for issuance of notice u/s 148 ought to have been the Joint Commissioner of Income Tax. However on perusal of the assessment records which was placed before us, it is clear that the sanction for issuance of notice u/s 148 was granted by the Commissioner of Income Tax. Hence the notice and the resultant assessment is bad in law as, the sanction by competent authority, as mentioned in section 151 only can assign proper jurisdiction to the Assessing Officer and if such sanction was not obtained, the Assessing Officer lacked the jurisdiction to complete the reassessment proceedings.
Contention of the Revenue
The Revenue contented that Commissioner is ranked higher in authority than the Joint Commissioner whose approval is required by law. Moreover, the assessee did not raise any objection before the AO on this issue. The contention of the Ld. DR is that once the assessee submits to the jurisdiction to the AO then subsequently objection with reference to jurisdiction cannot be raised.
The Revenue further argued that even otherwise Section 292B of the Act precluded the assessee’s objection as to the jurisdictional infirmity of the notice.
Held by the High Court
The Revenue’s argument seems plausible and even logical because the Commissioner or a Chief Commissioner is unarguably ranked higher in authority than a Joint Commissioner. Yet at the same time, this Court has to give effect to plain words of the statute which unambiguously states that the competent authority in such cases is the Joint Commissioner (and not the Chief Commissioner or the Principal Commissioner).
The Court also invokes the principle enunciated by the Privy Council in Nazir Ahmad V. Emperor, AIR 1936 PC 253 : AIR 193 that if the statute mandates that something be done in a particular manner, it should be in that manner or not at all.
For the above reasons, the Court holds that there is no substantial question of law arises. The appeal is therefore dismissed.