When reasons recorded by AO for reassessment stand approved by JC, it cannot be said that provisions of Sec 151(2) were not fulfilled merely because file erroneously got placed before CIT who also recorded satisfaction: HC
AHMEDABAD,: THE ISSUE IS – Whether when reasons recorded by the AO for reopening the assessment stand approved by the Joint Commissioner, it can still be said that the requirements of Sec 151(2) were not fulfilled merely because the file erroneously got placed before the Commissioner who also recoreded his satisfaction. NO IS THE ANSWER.
Facts of the case:
The assessee has preferred the present appeal challenging the order passed by the Tribunal wherein, it was held even the Joint Commissioner could grant an approval to initiate reassessment proceeding u/s 151(2). In such matter, the Tribunal concluded by stating that merely because the Commissioner had also applied his mind, the same would not vitiate such proceedings.
High Court held that,
++ it is undisputable that Joint Commissioner had expressed his satisfaction that it was a fit case for issuing notice of reopening of the assessment.. This was on the basis of reasons recorded by the AO which were also furnished to him. His satisfaction and approval was therefore, complete. Sec. 151(2) provides that in cases specified therein, no notice u/s 148 would be issued by an AO who is below the rank of Joint Commissioner, unless the Joint Commissioner is satisfied, on the reasons recorded by the AO that it is a fit case for issuance of such notice. Hence, this requirement was fulfilled;
++ the legal proposition is that when the statute casts a duty on a certain administrative officer, the same must be performed by him and the satisfaction arrived at even by the higher authority would not be sufficient. However, in the present case, there was no lack of satisfaction or exercise of power by the Joint Commissioner. He in clear terms, expressed his satisfaction that on the basis of the reasons recorded by the AO, it was a fit case for issuance of notice u/s 148. Merely because the papers were thereafter for some erroneous reason also placed before the Commissioner who also recorded his similar satisfaction would not take away anything from the previous conclusion;
++ in case of Anirudhsinhji Karansinhji Jadeja, the sanction to be granted under the Terrorist and Disruptive Activities (Prevention) Act, 1987 had to be done by the D.S.P. Instead of exercising such powers, he made a report to the Additional Chief Secretary and asked his permission to proceed under the TADA Act. This was clearly found in breach of statutory requirement by the Supreme Court. Relying upon and referring to this judgment of Supreme Court, Delhi High Court in case of SPL’s Siddhartha Ltd, quashed the notice of reopening of assessment, in which satisfaction, as referred to in Sec. 151, was arrived at by the Commissioner, though the proper authority was Joint Commissioner. It was a case where the Joint Commissioner had not recorded any such satisfaction but merely placed the file before the Commissioner for his view. Both these cases are therefore, clearly distinguishable.
(See 2018-TIOL-957-HC-AHM-IT)
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