Commissioner inadequate remarks lead to setting aside of notice issued by AO.
Commissioner inadequate remarks lead to setting aside of notice issued by AO.
After search AO issued notice to assessee u/s 148 (of Income Tax Act, 1961). AO rejected assessee's object'n against it. On appeal CIT(A) quashed notice u/s 148 (of Income Tax Act, 1961). ITAT upheld it. On appeal HC found that while according sanct'n, Joint Commissioner, I.T has only recorded "Yes, I am satisfied".Thus, In view of findings recorded by appellate courts & law laid down in Arjun Singh v. Asstt. DIT [2000] 246 ITR 363(MP), no Q of law involved in matter, warranting reconsiderat'n.-000446
Facts in Brief:
1. A search was conducted at the residential and business premises of the assessee.
2. However, notice under section 148 (of Income Tax Act, 1961) was issued by the Assessing Officer, on the basis of certain reasons recorded.
3. The assessee objected to the same before the Assessing Officer, this was rejected by the Assessing Officer and he completed the assessment under section 143(3) (of Income Tax Act, 1961) read with section 147 (of Income Tax Act, 1961), of the Act.
4. Appeals were filed before the Commissioner of Income Tax (Appeals) and the Appellate Authority found that the reason recorded by the Joint Commissioner of Income Tax, for according sanction, it only stated that 'I am Satisfied'.
5. As this action for sanction was without application of mind and as this was done in a mechanical manner, following the law laid down in the case of Arjun Singh v. Asstt. DIT [2000] 246 ITR 363 (MP), the Commissioner quashed the notice under section 148 (of Income Tax Act, 1961), of the Act.
6. On appeal ITAT upheld it.
On appeal, HC held as under:
7. We have considered the rival contentions and we find that while according sanction, the Joint Commissioner, Income Tax has only recorded so "Yes, I am satisfied". In the case of Arjun Singh(supra), the same question has been considered by a Coordinate Bench of this Court and the following principles are laid down:—
'The Commissioner acted, of course, mechanically in order to discharge his statutory obligation properly in the matter of recording sanction as he merely wrote on the format "Yes, I am satisfied" which indicates as if he was to sign only on the dotted line. Even otherwise also, the exercise is shown to have been performed in less than 24 hours of time which also goes to indicate that the Commissioner did not apply his mind at all while granting sanction. The satisfaction has to be with objectivity on objective material.'
8. If the case in hand is analysed on the basis of the aforesaid principle, the mechanical way of recording satisfaction by the Joint Commissioner, which accords sanction for issuing notice under section 148 (of Income Tax Act, 1961), is clearly unsustainable and we find that on such consideration both the appellate authorities have interfered into the matter. In doing so, no error has been committed warranting reconsideration.
9. As far as explanation to Section 151 (of Income Tax Act, 1961), brought into force by Finance Act, 2008 is concerned, the same only pertains to issuance of notice and not with regard to the manner of recording satisfaction. That being so, the said amended provision does not help the revenue.
10. In view of the concurrent findings recorded by the learned appellate authorities and the law laid down in the case of Arjun Singh (supra), we see no question of law involved in the matter, warranting reconsideration.
11. The appeals are, therefore, dismissed.
Case Reference-Commissioner of Income-tax, Jabalpur v. S. Goyanka Lime & Chemicals Ltd
HIGH COURT OF MADHYA PRADESH
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