Case Law Details
Sonu Khandelwal Vs ITO (ITAT Jaipur)
Section 150(1) provides exception to the limitation provided U/s 149 for issuing notice U/s 148. Therefore, Section 150 of the Act can be pressed into service in a particular case of reopening based on the directions or giving effect to the order of the appellate authority only when the time limitation provided U/s 149 has already expired. In the case in hand, the time limit provided U/s 149 of the Act was certainly not expired as on 31/4/2011, however, it is certainly after the expiry of four years from the end of the assessment year and therefore, as per the provisions of Section 151, the notice U/s 148 cannot be issued unless the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner or Commissioner is satisfied on the reasons recorded by the Assessing Officer that it is a fit case for issue of such notice. Therefore, the condition set out in Section 151 and particularly in the proviso to Section 150(1) of the Act as existed at relevant time is a mandatory condition for issuing notice U/s 148 of the Act. If such notice is issued after expiry of four years from end of the relevant assessment year Section 151 gives jurisdiction to the Assessing Officer to initiate the proceedings U/s 147 and in absence of the sanction of the authority provided U/s 151 of the Act, the notice issued by the Assessing Officer is invalid. The provisions of Section 150 of the Act is only an exception to the limitation provided U/s 149 and therefore, the said Section cannot be taken as an exception to Section 151 of the Act. Hence, we are of the considered view that even if the assessment is reopened to make reassessment in consequence of or to give effect to any finding or direction of the appellate authority the requirement of sanction U/s 151 is mandatory for issuing notice U/s 147 of the Act. Even otherwise from the plain reading of Section 150(1) of the Act, it is clear that it begins with non-obstante clause as far as the limitation provided U/s 149 of the Act and therefore, Section 150(1) has an overriding effect on Section 149 and not over Section 151 of the Act. The requirement of sanction U/s 151 of the Act is in the nature of check and balance and it is a measure against the misuse of power by the assessing authority for assessment or reassessment based the reasons not found satisfactory by the authorities provided U/s 151 of the Act. Accordingly, when the Assessing Officer admittedly issued notice U/s 148 after the four years from the end of the assessment year and without obtaining the sanction U/s 151 then such notice issued U/s 148 is in violation of provisions of Section 151 of the Act and consequently the same is invalid and the entire reassessment proceedings stand vitiated. Hence, we hold that the reopening of the assessee is not valid and the same is quashed. The consequential reassessment is also quashed.
FULL TEXT OF THE ITAT JUDGMENT
These two appeals by the assessee are directed against the two separate orders of ld. CIT(A)-I, Jaipur, both dated 07/08/2015 for the A.Y. 2006-07 and 2009-10 respectively. For the A.Y. 2006-07, the assessee has raised following grounds of appeal:
“1. In the facts and circumstances of the case and in law, the Id. CIT(A) has erred in confirming the action of the Id. AO in reopening the assessment u/s 147 of Income Tax Act, 1961. The action of the Id. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the reassessment proceedings being illegal and without any basis.
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