Can AO initiate proceedings u/s 148 of the IT Act once the proceedings u/s 147, 148, and 151 have been declared invalid?

This Income Tax Appellate Tribunal case concerns whether an Assessing Officer (AO) can initiate new proceedings under Section 148 of the Income Tax Act after previous proceedings under Sections 147, 148, and 151 were found to be invalid. The CIT(A) had previously ruled the notice under Section 148 invalid due to invalid prior sanction but directed the AO to issue a fresh notice following the correct procedure. The assessee argued that if the initial proceedings were invalid, no new direction could be issued.

THE INCOME TAX APPELLATE TRIBUNAL
DELHI “SMC-2” BENCH: NEW DELHI
(THROUGH VIDEO CONFERENCING)

BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER

ITA No.9687/Del/2019
Assessment Year : 2011-12

Munish Chander Khurana,
A-4/440, Paschim Vihar,
New Delhi-110063
PAN-AJYPK5166E
APPELLANT 

Vs

ITO,
Ward-41(3),
New Delhi.
RESPONDENT

Appellant by Sh. Lalit Mohan, CA
Respondent by Sh. R.K.Gupta, Sr.DR

Date of Hearing 25.05.2021
Date of Pronouncement 14.06.2021

ORDER

PER KUL BHARAT, JM :

 This appeal filed by the assessee for the assessment year 2011-12 is directed against the order of Ld. CIT(A)-14, New Delhi dated 28.10.2019. The assessee has raised following grounds of appeal:-

1. “That the learned Commissioner of Income Tax (Appeals)-14, New Delhi has erred both in law and, on facts in directing the learned Assessing Officer u/s 251 of the Act to issue notice u/s 148 of the Act in Assessment Year 2011-12 after following the procedure laid down u/s 147, 148 and 151 of the Act.

1.1. That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that once the initiation of proceedings u/s 147 of the Act and assessment framed u/s 147/143(3) of the Act was invalid no direction could be issued and as such the aforesaid impugned order is illegal, invalid and without jurisdiction for the instant assessment year.” 

2. The only effective ground raised in this appeal by the assessee is against the direction of Ld.CIT(A) issued notice to the Assessing Officer u/s 148 of the Income Tax Act, 1961 (“the Act”) for Assessment Year 2011-12 after following the procedure laid down u/s 147 & 148 of the Act.

3. Facts giving rise to the present appeal are that the case of the assessee was re-opened for assessment by issuing notice u/s 148 of the Act dated 26.08.2018. In response thereto, the assessee filed return of income declaring total income of Rs.5,62,070/-. The ground for re-opening of assessment was cash transaction exceeding Rs.10,00,000/-. Thereafter, the Assessing Officer proceeded to make assessment by observing that the assessee had deposited an amount of Rs.42,85,700/- in Saving Bank Account No.10005845133 with State bank of Patiala (now State Bank of India), Branch-B-2/2, Paschim Vihar, New Delhi. The Assessing Officer observed that the assessee failed to provide justification by supporting evidence and he made addition of Rs.42,85,700/- thereby, assessed income at Rs48,47,770/- against the returned income of Rs.5,62,070/-.

4. Aggrieved against this, the assessee preferred appeal before Ld.CIT(A) who after considering the submissions, allowed the appeal of the assessee for statistical purposes on the ground that the notice issued u/s 148 of the Act was bad in law as the requisite prior sanction of Ld. Pr.CIT was found to be invalid. However, Ld.CIT(A) directed the Assessing Officer to issue notice u/s 148 of the Act for Assessment Year under consideration after following the due procedure laid down u/s 147, 148 and 151 of the Act. 

To know more in details find the attachment file