Addl. Commissioner is not ‘Proper Officer’ for Re-Opening of Assessment after 4 Years: ITAT [Read Order]

Addl. Commissioner - Proper Officer - Re-Opening - Assessment - ITAT - Taxscan

The Income Tax Appellate Tribunal (ITAT), Bangalore bench has held that the Addl. Commissioner is not a ‘Proper Officer’ for re-opening of assessment after 4 years under the Income Tax Act, 1961.

The assessee filed its return on fringe benefits for the year under appeal on 30.9.2009 declaring the total value of fringe benefits of Rs.1,73,35,689. The Assessing Officer completed the assessment under section 115WE(3) r.w.s. 115WG of the Act assessing the income of Rs.2,59,52,133 after making addition of towards fringe benefits of Rs.81,55,514 u/s. 115WC(1)(e), Rs.3,63,562 u/s. 115WB(2)(N) and Rs.97,368 u/s. 115WB(2) of the Act. The total demand raised was Rs.40,26,856. Later, the assessment was re-opened after the expiry of the limitation period.

The Tribunal bench comprising Shri Chandra Poojari, Accountant Member and Smt. Beena Pillai, Judicial Member approval held that the re-assessment was not granted by the Competent Authority.

“Being so, the assumption of jurisdiction by the AO is bad in law. This view of ours is fortified by the order of the coordinate Bench of the Tribunal in the case of Hi Gain Investment P. Ltd. v. ITO, 50 CCH 34 wherein the question as proposed does not give rise to any substantial question of law as the said issue has already been concluded against the Revenue in view of the decision of this Court in Ghanshyam K. Khabrani v. Asst. CIT,” the Tribunal said.

Quashing the re-assessment order, the Tribunal held that “In the present case also the reopening beyond 4 years has been done by getting the approval of Addl. Commissioner and not from the Commissioner or Pr. Commissioner or Pr. Chief Commissioner. Therefore, the initiation of the proceedings u/s 148 of the Act was invalid. In view of the above discussion, we are of the opinion that assumption of jurisdiction is improper in the present case so as to reopen the assessment. Accordingly, we quash the reassessment order u/s. 115WE(3) r.w.s. 115WG of the Act.”

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M N Dastur & Co Pvt. Ltd. vs The Deputy Commissioner of Income Tax

Counsel for Appellant:   B.K. Manjunatha

Counsel for Respondent:   Priyadarshini Mishra


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