ACIT CIR-1 , DHANBAD V. M/S BHARAT COOKING COAZL LTD , DHANBAD

ITA 301/RAN/2017

AI Insights

The case involves cross appeals by M/s Bharat Coking Coal Ltd. and the A.C.I.T., Circle-1, Dhanbad, along with a cross objection by the assessee against the orders of the CIT(A), Dhanbad. The primary legal issue was the validity of the reopening of the assessment for the Assessment Year 2010-11 under Section 148 of the Income Tax Act, 1961. The assessee contended that the reopening was invalid as the necessary approval was not obtained from the correct authority (JCIT) but from the CIT instead. The Tribunal examined the procedural compliance with Section 151 of the Income Tax Act, particularly the requirement for approval from the appropriate authority for reopening assessments.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717074 (ITAT-RANCHI)
• Duration Of Justice: 7 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 23-11-2017
• Other Referred Cases: CIT vs. Aquatic Remedies Pvt. Ltd, Yum Restaurants Asia Pte Ltd. V. Deputy Director of Income-tax (No. 1), DSJ Communication Ltd. v. DCIT, Circle -2(1), Ghanshyam K. Khabrani vs. Asstt. CIT, CIT v. SPL'S Siddhartha Ltd., CIT vs. Suman Waman Chaudhary
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revised return; Reopening of assessment; Tangible material; Borrowed satisfaction
• Section: 148; 143(3)

Judgement Text

"P a g e 1 | 6 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER ITA Nos. 292/Ran/2017 (Assessment Year: 2010-11) M/s Bharat Coking Coal Ltd., Finance Directorate, Koyla Bhawan, Koyla Nagar, P.O. BCCL, township, Dhanbad-826005. PAN No. AAACB 7934 M Vs. A.C.I.T., Circle-1, Dhanbad. Appellant/ Assessee Respondent/ Revenue ITA No. 301/Ran/2017 (Assessment Year: 2010-11) A.C.I.T., Circle-1(1), Dhanbad. Vs. M/s Bharat Coking Coal Ltd., Koyla Bhawan, Koyla Nagar, Dhanbad-826005. PAN No. AAACB 7934 M Appellant/ Revenue Respondent/ Assessee C.O. No. 10/Ran/2018 (Arising out of ITA No. 301/Ran/2017) (Assessment Year: 2010-11) M/s Bharat Coking Coal Ltd., Finance Directorate, Ground Floor, Koyla Bhawan, Koyla Nagar, P.O Dhanbad-826005. PAN No. AAACB 7934 M Vs. A.C.I.T., Circle-1, Dhanbad. Objector/Assessee Respondent/Revenue Assessee represented by Shri M.K. Choudhary A.R. with Shri Devesh Poddar, A.R. Department represented by Shri Rajat Datta, CIT-DR Date of hearing 19/08/2025 Date of pronouncement 19/08/2025 O R D E R PER: BENCH 1. These are the cross appeals filed by the assessee and the revenue and the cross objection by the assessee against the orders of the ld. CIT(A), Dhanbad both dated 20/09/2017 for the A.Y. 2010-11. As all the issues in these appeals of the assessee and revenue relate to the common issues, therefore, they are being disposed off by this common order. Printed from counselvise.com ITA No.292 & 301/Ran/2017 & CO 10/Ran/2018 M/s BCCL Vs ACIT P a g e 2 | 6 2. Shri M.K. Choudhary, ld. A.R. with Shri Devesh Poddar, ld A.R. are represented on behalf of the assessee and Shri Rajat Datta, ld. CIT-DR is represented on behalf of the revenue. It was submitted by the ld. AR that the assessee is a public sector undertaking. The assessee had filed its return of income for the impugned assessment year on 24/09/2010 and revised return on 21/09/2011. The assessment came to be completed under Section 143(3) on 13/03/2013. Subsequently, notice under Section 148 came to be issued on the assessee on 09/09/2014. It was the submission that the approval for the said notice under Section 148 which was supposed to be taken from the ld. JCIT was, however, taken from the ld. CIT being CIT, Dhanbad. It was a submission that the approval taken from the ld. CIT is invalid in so far as it is the JCIT who can give the approval. The ld. AR drew our attention to the notice issued under Section 148 which reads as follows: Printed from counselvise.com ITA No.292 & 301/Ran/2017 & CO 10/Ran/2018 M/s BCCL Vs ACIT P a g e 3 | 6 It was the submission that the said notice also specifically mentions that the approval and sanction has been taken from the ld. CIT, Dhanbad. The ld. AR has also filed written submissions as follows: “1. Original assessment was completed u/s 143(3) on 13.03.2013. 2. The case was reopened by issue of notice u/s 148 on 09.09.2014, i.e. in the 3rd year i.e. within 3 years after approval from CIT, Dhanbad instead of from JCIT, as per section 151 prevailing at that time before amendment w.e.f. 01.06.2015. 3. As per reasons recorded (paper Book pg. no. 21-24) - It has been recorded that from the report of Investigation Directorate, Panta, during the search on Sri Lal Bahadur Singh on 23.11.2011 and thereafter, it was revealed that during FY 2010-11 & 2011-12 the group has disclosed abnormally high rate of profit margin of nearly 100%, which indicate that no work was completed. This is the very basis of reopening of the assessments of past years. As far as the year under consideration is concerned, from paper book pg. No. 23 (reasons) read with pg. No-19 (report of DGIT), it will appear that even in the case of Sri Lal Bahadur Singh during the year under consideration i.e. in AY 2010-11, even after disclosure of additional income before Settlement commission, during the year under consideration the Rate of profit disclosed by Lal bahadur Singh has been reported at 6.20% (which is normal rate of profit), as against 98.16% in AY 2011-12 and 78.43% in AY 2012- 13. As such even on facts, prima fade there was no cogent, tangible material, in possession of the IT department, of any escapement for the year under consideration. 4. As such the reasons recorded, within 3 years from the end of relevant Assessment year, suffers from the following infirmities in law :- i. The approval has not been taken from the ICIT, as per mandate of section 151 of the IT Act, 1961. ii. Borrowed satisfaction of DG1T(Inv.) Patna and information of Central circle in the case of L. B. Singh, without application of own mind of Ld. AO.] Printed from counselvise.com ITA No.292 & 301/Ran/2017 & CO 10/Ran/2018 M/s BCCL Vs ACIT P a g e 4 | 6 iii. Prima facie no cogent, tangible material of escapement for the year under consideration. iv. There is no finding of Ld. AO that that the appellant had not disclosed all material facts, truly and fully at the time of original assessment. 5. Hence, even on facts and in law, the Notice u/s 148 issued on 09.09.2014, alongwith subsequent proceedings are liable to be quashed. The ld. AR drew our attention to the approval granted which reads as follows: Printed from counselvise.com ITA No.292 & 301/Ran/2017 & CO 10/Ran/2018 M/s BCCL Vs ACIT P a g e 5 | 6 It was a submission that the approval having been granted by the ld. CIT, Dhanbad, the same is invalid. The ld. AR drew our attention to the following decisions which has been filed before us. CIT vs. Aquatic Remedies Pvt. Ltd [2018] 96 taxmann.com 609/258 Taxman 357/406 ITR 545 (Bom.) SLP dismissed in [2020] 113 taxmann.com 451 (SC) Yum Restaurants Asia Pte Ltd. V. Deputy Director of Income-tax (No. 1) [2017] 397 ITR 639 (Delhi) DSJ Communication Ltd. v. DCIT, Circle -2(1) (2014) 222 Taxman 129 (Bombay) Ghanshyam K. Khabrani vs. Asstt. CIT (2012) 346 ITR 443 (Bom.) CIT v. SPL'S Siddhartha Ltd. [2012] 345 ITR 223 (Del) CIT vs. Suman Waman Chaudhary (2010) 321 ITR 495 (Bom.) SLP rejected on 12.2.2008 SLP No. 6757 of 2009 (2009)312 ITR (St) 339 It was the submission that the approval having been taken from the wrong authority, the reopening is liable to be quashed. 3. In reply, the ld. CIT-DR for the revenue submitted that the approval has been taken from a superior officer and therefore, the same is liable to be upheld. Ld. CIT-DR vehemently supported the orders of the Assessing Officer and the ld. CIT(A). 4. We have considered the rival submissions. On perusal of the facts in the present case clearly shows that the approval was required to be taken from the ld. JCIT for the reopening of the assessment, however, the approval has been taken from the ld. CIT, Dhanbad. A perusal of the decisions as quoted by the ld. AR also clearly shows that when the powers are conferred upon a particular authority it has to be exercised by that authority and cannot be substituted by the satisfaction of another. The Hon’ble Delhi High Court in the Printed from counselvise.com ITA No.292 & 301/Ran/2017 & CO 10/Ran/2018 M/s BCCL Vs ACIT P a g e 6 | 6 case of Yum Restaurants Asia Pte Ltd. Vs DCIT 397 ITR 639 has categorically held that where approval for reopening of assessment should be by an officer of rank of Joint Commissioner, approval granted by an officer superior to Joint Commissioner would not satisfy requirement of Section 151(2). In the present case, as the approval has been granted by the ld. CIT, Dhanbad whereas the approval was to be granted by the ld. JCIT, we are of the view that the reopening is bad in law and consequently the same stands quashed. Consequently, the impugned assessment orders also stand quashed. 5. In the result, the appeal of the assessee in ITA No. 292/Ran/2017 stands allowed and ITA No. 301/Ran/2017 being the departmental appeal stands dismissed and the Cross objection No. 10/Ran/2018 filed by the assessee also stands allowed. Order announced in open court on 19th August, 2025. Sd/- Sd/- (RATNESH NANDAN SAHAY) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Ranchi, Dated: 19/08/2025 *Ranjan Copy to: 1. Assessee 2. Revenue 3. CIT 4. DR By order 5. Guard File Sr. Private Secretary, ITAT, Ranchi Printed from counselvise.com "