Commissioner of Income Tax vs Ladharam Lakhimal

The Income Tax Appellate Tribunal, Indore, has referred the following question for the opinion of this court :

"Whether, on the facts and circumstances of the case, the Tribunal is justified in holding that there was no approval by the Range Deputy Commissioner for issuance of notice u/s 143(2) of the Act ?"

It appears that the assessee filed a return of income for the assessment year 1985-86, which was accepted by the Assessing Officer u/s 143(1) on February 16, 1987. However, the Assessing Officer wanted to verify the correctness of the return and sent a proposal vide Section 143(2)(b) to the Range Deputy Commissioner for his approval of issue of notice which was allegedly granted on October 16, 1987. Accordingly, a notice u/s 143(2) was issued to the assessee and assessment made on a total income of Rs. 3,75,235.

The assessee took appeal against this which was allowed partly. The matter was carried to the Tribunal by the Revenue and it was found that the Revenue had not produced any order of the Range Deputy Commissioner despite opportunities granted to show that requisite approval was granted for issuance of notice u/s 143(2). The Tribunal accordingly quashed the assessment made u/s 143(3). The Revenue sought reference which was rejected and then filed an application for seeking reference upon which the Tribunal has submitted the statement of case.

In our view, the issue is factual in nature. Because so long as the Revenue had failed to show that requisite approval was granted for issuance of notice u/s 143(2) of the Act, it could not be presumed that such approval was granted and was in existence. There is no dispute that notice u/s 143(2)(b) could not be issued without such approval and once the requisite approval was found missing, the Tribunal was justified in setting aside the assessment made u/s 143(3). Reference is accordingly answered in the affirmative.