Reassessment can’t be vitiated on ground that Sec. 151 approval letter was received by AO after issuing notice: HC

Case Details: Sahara Credit Cooperative Society Ltd. v. DCIT - [2022] 141 taxmann.com 384 (Allahabad)

Judiciary and Counsel Details

• • Devendra Kumar Upadhyaya & Subhash Vidyarthi, JJ.
  • Waseeq Uddin Ahmed for the Petitioner.
  • Manish Misra & Dr Ravi Kumar Mishra for the Respondent.

Facts of the Case

Assessee was a multi-state co-operative society. It had filed its return of income which was processed and an assessment order was passed.

Later, a reopening notice was issued on the ground that the identity, creditworthiness, and genuineness of deposits received from its members and shareholder’s fund were not verified with relevant documents.

Assessee filed writ petition contended that notice was issued on 22-3-2021 by DCIT whereas letter written by member CIT communicating approval under section 151 for issuance of notice was received by Assessing Officer (AO) on 24-3-2021. Thus, on the date of issuance of notice i.e., on 22-3-2021, AO was not having any approval/sanction.

High Court Held

The Allahabad High Court held that there was no need for the paper containing approval to be received physically before issuing the notice. AO can proceed to issue a notice under section 148 if the approving authority has granted his approval and such approval has been communicated to AO in any manner including by uploading it on the portal of the department.

The notice issued under section 148 is not vitiated on the ground that the paper containing approval under section 151 was received by AO after issuing the notice.

Thus, notice issued under section 148 as well as all the procedures undertaken in consequence of the notice did not suffer from any such illegality to warrant any interference by High Court.

List of Cases Reviewed

• • Raymond Woollen Mills Ltd. v. ITO [1999] 236 ITR 34 (SC) (para 12)
  • CIT v. P.V.S. Beedies (P.) Ltd. [1999] 103 Taxman 294/237 ITR 13 (para 21)
  • Asstt.CIT v. Rajesh Jhaveri Stock Brokers (P.) Ltd. [2007] 161 Taxman 316/291 ITR 500 (SC) (para 22)
  • Phool Chand Bajrang Lal v. ITO [1993] 69 Taxman 627/203 ITR 456 (SC) (para 23)
  • Sri Krishna (P.) Ltd. v. ITO [1996] 87 Taxman 315/221 ITR 538 (SC) (para 24)
  • CIT v. Kelvinator of India Ltd. [2010] 187 Taxman 312/320 ITR 561 (SC) (para 27)
  • New Delhi Television Ltd. v. Dy. CIT [2020] 116 taxmann.com 151/271 Taxman 1/424 ITR 607 (SC) (para 28)
  • ITO v. Tech Span India (P.) Ltd. [2018] 92 taxmann.com 361/255 Taxman 152/404 ITR 10 (SC)
  • Asstt. CIT v. Marico Ltd. [2020] 117 taxmann.com 244/272 Taxman 179 (SC) (para 29) followed

List of Cases Referred to

• • Raymond Woollen Mills Ltd. v. ITO [1999] 236 ITR 34 (SC) (para 12)
  • CIT v. P.V.S. Beedies (P.) Ltd. [1999] 103 Taxman 294/237 ITR 13 (para 20)
  • Asstt.CIT v. Rajesh Jhaveri Stock Brokers (P.) Ltd. [2007] 161 Taxman 316/291 ITR 500 (SC) (para 22)
  • Phool Chand Bajrang Lal v. ITO [1993] 69 Taxman 627/203 ITR 456 (SC) (para 23)
  • Sri Krishna (P.)Ltd. v. ITO [1996] 87 Taxman 315/221 ITR 538 (SC) (para 24)
  • CIT v. Kelvinator of India Ltd. [2010] 187 Taxman 312/320 ITR 561 (SC) (para 27)
  • New Delhi Television Ltd. v. Dy. CIT [2020] 116 taxmann.com 151/271 Taxman 1/424 ITR 607 (SC) (para 28)
  • ITO v. Tech Span India (P.) Ltd. [2018] 92 taxmann.com 361/255 Taxman 152/404 ITR 10 (SC) (para 29)
  • Asstt. CIT v. Marico Ltd. [2020] 117 taxmann.com 244/272 Taxman 179 (SC) (para 29)