IN HIGH COURT OF DELHI AT NEW DELHI Decided on 27th February, 2015 ITA 158/2015 COMMISSIONER OF INCOME TAX-8 (ERSTWHILE CIT-III) Appellant Through Ms. Suruchi Aggarwal, sr. standing counsel versus SOYUZ INDUSTRIAL RESOURCES LTD. Respondent Through Mr. Mayank Jain and Mr. Madhur Jain, Advs. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE R.K.GAUBA MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT) % 1. Revenue is aggrieved by order of Income Tax Appellate Tribunal (hereinafter referred to as ITAT ) dated 22.08.2014 dismissing its appeal ITA No. 3853/Del/2010. It urges that in given circumstances of case, ITAT s findings that Commissioner of Income Tax lacked authority to sanction re-assessment proceedings through issuance of notice under Section 148, was unjustified. 2. brief facts of case are that for Assessment Year (AY) 2002-03, assessee had filed its returns in normal course on 16.10.2002. assessment was framed under Section 143(1). Based upon information received by Assessing Officer (AO), satisfaction note was recorded sometime in early 2009 and notice was issued in 2009 i.e. four years beyond end of assessment year, under proviso to Section 147(1). re-assessment proceedings were completed on 31.12.2009. assessee in its appeal urged that notice under Section 147 was unsustainable for reason it was not ITA 158/2015 Page 1 approved by competent authority in accordance with Section 151 of Act. This argument ultimately found favour with ITAT which, inter alia, held as follows:- 8. We have heard rival submission and perused material on record. In instant case admittedly, neither assessment u/s 143 (3) nor u/s 147 was completed prior to issuance of notice u/s 148 of Act. notice u/s 148 of Act was issued on 25.3.2009 i.e. four years beyond end of assessment year. Therefore u/s 151 (2) of Act is applicable to facts of instant case Section 151(2) of Act read as under : "(2) In case other than case falling under sub- section (1), no notice shall be issued under section 148 by Assessing Officer, who is below rank of Joint Commissioner, after expiry of four years from end of relevant assessment year, unless Joint Commissioner is satisfied, on reasons recorded by such Assessing Officer, that it is fit case for issue of such notice." 8.1. Hence sanctioning authority as per section 151(2) of Act for issuance of notice u/s 148 ought to have been Joint Commissioner of Income Tax. However on perusal of assessment records which was placed before us, it is clear that sanction for issuance of notice u/s 148 was granted by Commissioner of Income Tax. copy of reason recorded for reopening assessment is placed at page 26 of paper book filed by assessee on 7.9.2010. Ld. DR's contention is that assessee did not raise any objection before AO on this issue. contention of Ld. DR is that once assessee submits to jurisdiction to AO then subsequently objection with reference to jurisdiction cannot be raised. sanction by competent authority, as mentioned in section 151 only can assign proper jurisdiction to Assessing Officer and if such sanction was not obtained, Assessing Officer lacked jurisdiction to complete reassessment proceedings. When legislature has specifically assigned jurisdiction to particular authority under Act to grant sanction then, if all other conditions are fulfilled, sanction has to be granted by that very authority. This ITA 158/2015 Page 2 function cannot be delegated to any other authority. It is legal duty cast upon that authority to perform said function. If that authority fails in performing his legal functions and same is performed by other authority then it goes to very root of proper assumption or jurisdiction by authority which was required to take that sanction. This is purely legal issue and can be raised at any stage of proceeding. 3. During course of contentions, Revenue had argued that even otherwise Section 292B of Act precluded assessee s objection as to jurisdictional infirmity of notice. This was repelled by ITAT itself. It relied upon Division Bench ruling in Commissioner of Income Tax V. S.P.L's Siddhartha Ltd. (2012) 345 ITR 223. 4. Revenue contends that ITAT fell into error and relies upon proviso to Section 151(1) to say that in all cases where re-assessment is proposed, approval of highest authorities such as Principal Chief Commissioner, Principal Commissioner or Commissioner, is essential and that in facts of this case such authorization had, in fact, been secured prior to issuance of notice. 5. Section 151 reads as follows:- 151. Sanction for issue of notice.- (1) In case where assessment under sub-section (3) of section 143 or section 147 has been made for relevant assessment year, no notice shall be issued under section 148 by Assessing Officer, who is below rank of Assistant Commissioner or Deputy Commissioner, unless Joint Commissioner is satisfied on reasons recorded by such Assessing Officer that it is fit case for issue of such notice : Provided that, after expiry of four years from end of relevant assessment year, no such notice shall be issued unless Chief Commissioner or Commissioner is satisfied, ITA 158/2015 Page 3 on reasons recorded by Assessing Officer aforesaid, that it is fit case for issue of such notice. (2) In case other than case falling under sub-section (1), no notice shall be issued under section 148 by Assessing Officer, who is below rank of Joint Commissioner, after expiry of four years from end of relevant assessment year, unless Joint Commissioner is satisfied, on reasons recorded by such Assessing Officer, that it is fit case for issue of such notice. 6. plain textual analysis of above provisions would indicate following:- (i) Where original assessment is result of scrutiny assessment [Section 143(3)] or made in course of re-assessment proceedings (Section 147) but within initial period, Section 151(1) applies. competent authority would then be Joint Commissioner; (ii) In same fact situation, in case notice is sought to be issued under Section 147 and proviso to Section 147(1) i.e. beyond extended four-year period, competent authority for prior approval to proposal would be Principal Chief Commissioner, or Chief Commissioner or Principal Commissioner or Commissioner; (iii) In case original assessment is completed other than i.e. otherwise than under Section 143(3) or during course of re- assessment proceedings, competent authority would be Joint Commissioner. 7. ITAT examined applicability of Section 292B based upon decision in S.P.L's Siddhartha Ltd.(supra), which rejected revenue s contention about its application holding that where jurisdictional infirmity ITA 158/2015 Page 4 strikes at root, invalidating issuance of notice, Section 292B cannot rescue it. 8. Revenue s argument seems plausible and even logical because Commissioner or Chief Commissioner is unarguably ranked higher in authority than Joint Commissioner. Yet at same time, this Court has to give effect to plain words of statute which unambiguously states that competent authority in such cases is Joint Commissioner (and not Chief Commissioner or Principal Commissioner). Revenue s submissions that all such cases, are covered under proviso to Section 147(1), competent authority for prior approval would be four superior officers, renders Section 151(2) superfluous. If anything Court is clear that it is not its job to render, in process of interpretation, entire provision academic or inoperative. This court is of opinion that accepting Revenue s position would result in that consequence. Court also invokes principle enunciated by Privy Council in Nazir Ahmad V. Emperor, AIR 1936 PC 253 : AIR 193 that if statute mandates that something be done in particular manner, it should be in that manner or not at all. In this case, since original assessment was completed other than eventualities contemplated in Section 151(1), i.e. it was processed under Section 143(1). Thus, clearly Section 151(2) applied. 9. For above reasons, Court holds that there is no infirmity in order of ITAT. No substantial question of law arises. appeal is therefore dismissed. S. RAVINDRA BHAT, J R.K.GAUBA, J FEBRUARY 27, 2015/vld ITA 158/2015 Page 5 Commissioner of Income-tax-8, (Erstwhile CIT-III) v. Soyuz Industrial Resources Ltd