IN THE HIGH COURT OF DELHI AT NEW DELHI
#8
ITA 1569/2010
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COMMISSIONER OF INCOME TAX ..... Appellant
Through Mr. Sanjeev Sabharwal, Adv.
versus
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SHARAT ANAND .....
Respondent
Through Mr. Prakash Kumar, Adv.
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CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE MANMOHAN
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O R D E R
08.10.2010
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Heard Mr. Sanjeev Sabharwal, learned counsel appearing for the revenue
and Mr. Prakash Kumar, learned counsel for the assessee ? respondent. In this
appeal preferred under Section 260A of the Income Tax Act, 1961 the number of
questions have been formulated by the revenue. Mr. Sanjeev Sabharwal, learned
counsel for the revenue only pressed question No.2.4 which is as follows:
?2.4 Whether learned ITAT erred in not considering that inspite of
Assessing Officer recording in its order that ?notice under Section 148 dated
6th February, 2001 was served after recording reasons? as far back on 27.03.2002
ought not to have entertained additional ground as to the challenge to the
notice under Section 148 of the Act??
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To appreciate whether the aforesaid question really raises a substantial
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question of law, the facts in brief are requisite to be stated. It is worth
noting that a notice under Section 148 of the Act was issued to the assessee.
The stand of the assessee on many a ground was rejected. Being grieved by the
order passed by the CIT(A), the assessee preferred an appeal before the
tribunal. A pure question of law was raised before the tribunal relating to the
factum that prior to issue of notice the satisfaction was not recorded. The
tribunal referred to the language employed in Section 148(2) of the Act and also
referred to the order passed by the Assessing Officer and came to hold as
follows:
?6. ?A copy of the reasons recorded has been placed before us, at page 4
of the assessee?s paper book. The date mentioned therein is ?6.12.2001?. The
notice issued to the assessee u/s 148 of the Act is dated 6.2.2001.
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7. Section 148(2) of the Act reads as follows:
?148(2) ? The Assessing Officer shall, before issuing any notice under this
section, record his reasons for doing so.?
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Therefore, it is the express provision of the Act, enshrined in Section 148(2)
thereof, that the reasons for initiating reassessment proceedings need must be
recorded prior to the issuance of any notice u/s 148. In the present case,
clearly, this provision has not been complied with. The notice u/s 148 of the
Act was thus issued to the assessee without recording any reasons. The
recording of reasons is a pre-requisite for initiating sine qua non is missing
in the present case. Once there is so, the notice u/s 148 itself becomes
invalid and we hold so. Proceedings pursuant to an invalid notice are
no
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proceedings in the eye of law and the assessment framed thereafter is no
assessment of law. Hence, this grievance of the assessee is accepted and the
notice dated 6.2.2001 issued to the assessee u/s 148 of the Act is quashed. As
a necessary corollary, assessment made in pursuance thereof is also held to be
invalid.?
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In view of the aforesaid analysis made by the tribunal, we do not
perceive any merit in this appeal and, accordingly, the same is dismissed
without any order as to costs.
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CHIEF JUSTICE
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MANMOHAN, J
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OCTOBER 08, 2010
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