The Mumbai bench Income Tax Appellate Tribunal ( ITAT ) quashed the assessment order passed under section 147 of the Income Tax Act , 1961 on account of non-following safeguards provided in sections 148 of Income Tax Act , 1961
The Assessee Holiday Resort Corporation case was reopened after four years from the end of the relevant assessment year and,on the AIR information in respect of sale of immovable property. During the course of reassessment proceedings the assessee was asked to submit the details and documents related to the above transactions.
Accordingly Notice u/s. 148 of the Act is issued after obtaining the approval of the Joint Commissioner of Income Tax Range – 18(1), Mumbai.
Aggrieved by the order assesee filed an appeal before the CIT(A). The CIT(A) dismissed the appeal filed by the assessee . Thereafter the assessee filed an appeal before the tribunal.
During the adjudication Piyush Chajjed, the counsel for assessee argued that no specific satisfaction has been recorded by the competent/concerned authority that it is a fit case for issue of notice under section 148 of the Act, which goes to the root of the case and dent the assessment order itself.
Shambu Yadav, Department representatives argued that contentions raised by the Assessee are not in sync with the law and / or the provisions of section 148/151 of the Act. As it is not the case here that no approval is granted.
The tribunal observed that the High Court in the case of Kartik Suresh Chandra Gandhi vs ACIT ( 2023 ) 154 taxmann.com 193 (Bom) also dealt with the notice issued under section 148 of the Act for reopening of the case and ultimately quashed the notice under section 148A(d) of the Act, on non-following the safeguards provided in sections 148 & 151 of the Act.
In this case the bench observed that no specific satisfaction has been recorded and even otherwise there is nothing on record to suggest that specified Authority has elsewhere directly or indirectly recorded the satisfaction as mandated under Section 148 of the Act.
Thus directly or indirectly non-recording of satisfaction as mandated for issue of notice under Section 148 of the Act, not only dents the reopening of the case under Section 147/148 of the Income Tax Act and/or notice issued under Section 148 of the Income Tax Act but also make the assessment order as void-ab-initio.
After analyzing the submission of both parties, the bench comprising Narender Kumar Choudhry, ( Judicial Member ) & S Rifaur Rahman, ( Accountant Member ) quashed the assessment order passed under section 147 of the Income Tax Act on account of non-following safeguards provided in sections 148 of Income Tax Act
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