M/s. Virat Credit & Holdings Pvt. Ltd., New Delhi V. ITO, New Delhi

CO 57/DEL/2012

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3553 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 10 month(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 31-07-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 19-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Unexplained cash credit; Search and seizure; Question of law; Accommodation entries; Assessment record; Block assessment; Reassessment proceedings
• Section: 69C; 143(3); 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.89/DEL./2012 (ASSESSMENT YEAR : 2005-06) ITO, WARD 17 (4), VS. M/S. VIRAT CREDIT & HOLDINGS PVT.LTD., NEW DELHI. 208, WADHWA COMPLEX, D 288/289, LAXMI NAGAR, DELHI. (PAN : AAACV3010G) CO NO.57/DEL/2012 (IN ITA NO.89/DEL./2012) (ASSESSMENT YEAR : 2005-06) M/S. VIRAT CREDIT & HOLDINGS PVT.LTD., VS. ITO, WAR D 17 (4), 208, WADHWA COMPLEX, NEW DELHI. D 288/289, LAXMI NAGAR, DELHI. (PAN : AAACV3010G) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHWANI TANEJA, ADVOCATE SHRI SHANTANU JAIN, ADVOCATE REVENUE BY : SHRI VIJAY VERMA, CIT DR SHRI AMIT JAIN, SENIOR DR DATE OF HEARING : 05.12.2017 DATE OF ORDER : 09.02.2018 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : ITA NO.89/DEL/2012 CO NO.57/DEL/2012 2 THE AFORESAID APPEAL FILED BY THE REVENUE AND CROSS OBJECTIONS FILED BY THE ASSESSEE ARE BEING DISPOSED OFF BY WAY OF CONSOLIDATED ORDER TO AVOID REPETITION OF DISCUSSIO N. 2. THE APPELLANT, INCOME-TAX OFFICER, WARD 17 (4), NEW DELHI (HEREINAFTER REFERRED TO AS THE REVENUE) BY FILIN G THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 31.10.2011 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)- XIX, NEW DELHI QUA THE ASSESSMENT YEAR 2005-06 ON THE GROUND S INTER ALIA THAT :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT (A) AS ERRED IN DELETING THE ADDITION OF RS.1,04,50,0001- MADE U/S 68 OF THE INC OME TAX ACT, 1961 TREATING THE CREDIT IN THE BOOKS OF T HE ASSESSEE AS UNEXPLAINED SHOWN AS RECEIPT OF SHARE APPLICATION MONEY. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LEARNED CIT (A) HAS ERRED IN APPRECIATING T HAT THE ASSESSEE COMPANY HAD NOT DISCHARGED ITS ONUS OF PROVING THE CREDITABILITY OF THE APPLICANTS FROM WH OM THE MONEY WAS ALLEGED TO HAVE BEEN RECEIVED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION MADE U/S 69C OF RS.1,04,500/- ON ACCOUNT O F COMMISSION PAID FOR OBTAINING THE ACCOMMODATION ENTRIES. 3. THE OBJECTOR, M/S. VIRAT CREDIT & HOLDINGS PVT. LTD., BY FILING THE PRESENT CROSS OBJECTIONS CHALLENGED THE ASSESSMENT ORDER ITA NO.89/DEL/2012 CO NO.57/DEL/2012 3 DATED 30.12.2010 PASSED BY THE ASSESSING OFFICER QU A THE ASSESSMENT YEAR 2005-06 ON THE GROUNDS INTER ALIA T HAT :- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN QUASHING THE IMPUGNED ASSESSMENT ORDER PASSED BY LD . AO WITHOUT COMPLYING WITH THE MANDATORY REQUIREMENTS OF SECTION 147 TO 151 OF THE INCOME TA X ACT, 1961 AND WITHOUT RECORDING VALID APPROVAL AS P ER LAW AND PASSING THE IMPUGNED ORDER THAT TOO WITHOUT INDEPENDENT APPLICATION OF MIND. 2. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER ACTION OF LD. CIT (A) IN NOT QUASHING THE ASSESSMEN T ORDER IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICATION OF THE CONTROVERSY AT HAND ARE : ON RECEIPT OF INFORMATION FROM ADDITIONAL CIT, RANGE-1, NEW DELHI VIDE LETTER DATED 11/14.01. 2008 THAT ASSESSEE COMPANY HAS PROVIDED ACCOMMODATION ENTRIES TO DIFFERENT PERSONS, THE ASSESSING OFFICER REOPENED THE ASSESSM ENT BY INITIATING THE PROCEEDINGS U/S 148 OF THE INCOME-TA X ACT, 1961 (FOR SHORT THE ACT) BY ISSUANCE OF NOTICE DATED 25.03. 2010 AND COMPLETED THE ASSESSMENT U/S 143 (3) AND THEREBY MA DE AN ADDITION OF RS.1,04,50,000/- ON ACCOUNT OF OBTAINING ACCOMMO DATION ENTRIES UNDER THE GARB OF SHARE APPLICATION MONEY F ROM DIFFERENT PERSONS AS UNEXPLAINED CASH CREDIT U/S 68 OF THE AC T AND MADE FURTHER ADDITION OF RS.1,04,500/- AS UNEXPLAINED EX PENDITURE U/S 69C OF THE ACT. ITA NO.89/DEL/2012 CO NO.57/DEL/2012 4 5. ASSESSEE CARRIED THE MATTER BY WAY OF FILING APP EAL BEFORE THE LD. CIT (A) WHO HAS DELETED THE ADDITION OF RS. 1,04,50,000/- AND RS.1,04,500/- BY PARTLY ALLOWING THE APPEAL. H OWEVER, THE LD. CIT (A) HAS NOT DECIDED THE LEGAL ISSUE OF REOPENIN G OF THE ASSESSMENT CHALLENGED BY THE ASSESSEE COMPANY. FEE LING AGGRIEVED, THE REVENUE HAS COME UP BEFORE THE TRIBU NAL BY FILING THE APPEAL CHALLENGING THE DELETION OF ADDITIONS MA DE BY THE AO AND THE ASSESSEE COMPANY FILED CROSS OBJECTION CHAL LENGING THE REOPENING OF THE ASSESSMENT BY THE AO. 6. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. UNDISPUTEDLY, THE ASSESSMENT OF THE ASSESSEE FOR AY 2005- 06 WAS FRAMED U/S 143 (3) VIDE ORDER DATED 04.12.20 07. IT IS ALSO NOT IN DISPUTE THAT LD. CIT (A) HAS GIVEN A RELIEF TO THE ASSESSEE COMPANY ON MERITS WITHOUT DECIDING THE LEGAL ISSUE OF REOPENING. THE AO ON RECEIPT OF INFORMATION FROM ADDL.CIT, RAN GE-1, NEW DELHI REOPENED THE ASSESSMENT BY ISSUING A NOTICE D ATED 25.03.2010 U/S 148 OF THE ACT BY RECORDING FOLLOWIN G REASONS :- REASONS RECORDED UNDER SECTION 147 FOR ISSUE OF N OTICE UNDER SECTION 148 OF THE IT ACT IN THE CASE OF M/S VIRAT HOLDING & CREDIT PVT LIMITED (AAACV3010G) ITA NO.89/DEL/2012 CO NO.57/DEL/2012 5 FOR ASSESSMENT YEAR 2005-06 THE ASSESSEE FILED RETURN OF INCOME ON 31/3/2006 VI DE RECEIPT NO 3122 DECLARING INCOME OF RS.31490/-. DUR ING THE YEAR THE ASSESSEE COMPANY HAS RAISED SHARE APPLICATION M ONEY AMOUNTING TO RS.12261500/-. THE ASSESSMENT WAS COMP LETED UNDER SECTION 143(3) OF THE IT ACT VIDE ORDER DATED 4/12/2007 AT RETURNED INCOME OF RS.31490/-. LATER ON INFORMATION RECEIVED FROM OFFICE OF THE AD DL CIT RANGE-1 NEW DELHI THAT DURING THE ASSESSMENT PROCEE DINGS OF M/S AANCHAL NET TECHNOLOGIES PVT LTD, THE ITO WARD 1 (1), NEW DELHI, CAME ACROSS THE 7 CASES OF FOLLOWING COMPANI ES, WHICH WERE INVOLVED IN PROVIDING BOGUS ENTRIES: I) M.S ANCHAL NET TECHNOLOGIES PVT LTD II) M/S ANCHAL BUILDCON PVT LTD III) M/S ANCHAL CONTRACTORS PVT LTD IV) M/S ANCHAL TOWNSHIP PVT LTD V) M/S ANCHAL INFO SYSTEM PVT LTD VI) M/S ANCHAL PROJECTS PVT. LTD. VII) M/S ANCHAL INFRASTURALS PVT. LTD. THE ABOVE COMPANIES WERE HAVING THEIR OFFICE ADDRES SES EITHER AS '88, BALDEV PARK, PARWANA ROAD, KHUREJI K HAS DELHI' OR AS 'PLOT NO 55, PATPARGANG INDUSTRIAL AREA, DELH I'. IT WAS FOUND THAT ONE SH P K JINDAL WAS RUNNING A RACKET O F PROVIDING ACCOMMODATION ENTRIES. BESIDES THE ABOVE 7 COMPANIE S, HE WAS ALSO UTILIZING MANY MORE COMPANIES. HE CONTROLLED MOST OF THE COMPANIES. IN SOME OF THE COMPANIES HE HIMSELF WAS THE DIRECTOR. IN OTHER COMPANIES THERE WERE DUMMY DIREC TORS AND SH JINDAL WAS ACTUALLY CONTROLLING THE AFFAIRS OF T HOSE COMPANIES. SH PK JINDAL FURNISHED A LIST OF COMPANI ES, WHICH WERE NOT DOING ANY REAL BUSINESS ACTIVITIES BUT WER E ENGAGED IN PROVIDING ACCOMMODATION ENTRIES. SH JINDAL ALSO FUR NISHED A LIST OF BENEFICIARIES, WHO GOT THE ACCOMMODATION ENTRIES IN FORM OF SHARE APPLICATION MONEY AFTER MAKING CASH PAYMENT T O THE COMPANIES (OR THEIR DUMMY DIRECTORS) ENGAGED IN PRO VIDING ACCOMMODATION ENTRIES. PERUSAL OF ASSESSMENT RECORDS OF THE ASSESSEE COMPA NY REVEALED THAT ITS NAME WAS APPEARING IN THE LIST OF BENEFICIARIES. IT WAS FURTHER NOTICED THAT THE ASSESSEE COMPANY HA S RECEIVED SHARE APPLICATION MONEY AMOUNTING TO RS.10450000/- DURING THE YEAR UNDER CONSIDERATION FROM THE FOLLOWING COMPANI ES APPEARING IN THE LIST OF COMPANIES ENGAGED IN PROVI DING ACCOMMODATION ENTRIES: 1 2 3 ITA NO.89/DEL/2012 CO NO.57/DEL/2012 6 SL.NO NAME OF THE COMPANY PROVIDING ACCOMMODATION ENTRIES AMOUNT OF SHARE APPLICATION MONEY RECEIVED THROUGH ACCOMMODATION ENTRY (RS) 1. INSTANT TRAVELING AND TOURS PVT. LTD. 9 LAC 2. LUSTER FINLEASE INVESTMENT PVT. LTD. 5 LAC 3. JUNNON CAPITAL SERVICES PVT. LTD. 10 LAC 4. AANCHAL BUILDCON PVT. LTD. 27.50 LAC 5. JUNEJA NAGPAL CONSTRUCTION PVT. LTD. 8 LAC 6. PRASANDI LEASING & FINANCE PVT. LTD. 5 LAC 7. DUME FOOTWEAR PVT. LTD. 25LAC 8. AKIK EDUCATION CENTRE PVT. LTD. 5 LAC 9. GAURAV HOLDING PVT. LTD. 10 LAC TOTAL 104.50 LAC IT MAY BE MENTIONED THAT AS PER INFORMATION RECEIVE D, THE ASSESSEE COMPANY IS BENEFICIARY FOR RS.27.50 LAC RE CEIVED THROUGH ACCOMMODATION ENTRY FROM AANCHAL BUILDCON P VT LTD. HOWEVER AS PER DETAILS GIVEN ABOVE, THE ASSESSEE HA S RECEIVED RS.104.50 LAC IN THE GRAB OF SHARE APPLICATION MONE Y THROUGH ACCOMMODATION ENTRIES, WHICH IS APPARENTLY ASSESSEE ' OWN UNACCOUNTED MONEY INTRODUCED IN ITS BOOKS OF ACCOUN TS THROUGH INTERMEDIARIES I.E. ACCOMMODATION ENTRY PROVIDERS. IN VIEW OF THE ABOVE FACTS I HAVE REASONS TO BELIEV E THAT ASSESSEE INCOME AMOUNTING TO RS.104.50 LAC CHARGEAB LE TO TAX HAS ESCAPED ASSESSMENT FOR THE ASSESSMENT YEAR 2005 -06. SUBMITTED TO THE ADDL COMMISSIONER RANGE-17 FOR HER PERUSAL AND SANCTION UNDER SECTION 151 FOR ISSUE OF NOTICE UNDER SECTION 148 OF THE IT ACT. 8. THE LD. AR FOR THE ASSESSEE CHALLENGING THE REOP ENING CONTENDED THAT ADDL.CIT HAS ACCORDED SANCTION WITHO UT APPLYING JUDICIAL MIND WHICH IS NOT SUSTAINABLE; THAT AO HAS NOT APPLIED HIS INDEPENDENT JUDICIAL MIND WHILE RECORDING REASONS T O REOPEN THE ITA NO.89/DEL/2012 CO NO.57/DEL/2012 7 ASSESSMENT RATHER REASONS ARE BASED UPON THE ALLEGE D ADMISSION OF ONE SHRI P.K. JINDAL; THAT THE AO HAS NOT DISPOSED OF ALL THE PRELIMINARY OBJECTIONS RAISED BY THE ASSESSEE COMPA NY FOR REOPENING; THAT THE ENTIRE ENQUIRY / INVESTIGATION HAS BEEN MADE BY THE AO AT THE BACK OF THE ASSESSEE COMPANY; THAT JU NEJA NAGPAL CONSTRUCTION PVT. LTD. WAS NOT DOING ANY BUSINESS. 9. HOWEVER, ON THE OTHER HAND, THE LD. DR TO REPEL THE ARGUMENTS ADDRESSED BY THE LD. AR FOR THE ASSESSEE COMPANY CONTENDED THAT ONLY PRIMA FACIE MATERIAL IS TO BE S EEN FOR THE PURPOSE OF REOPENING; THAT SANCTION HAS BEEN ACCORD ED BY ADDL. CIT FOR REOPENING AFTER DULY APPLYING HIS MIND. 10. FIRST OF ALL, LD. AR FOR THE ASSESSEE COMPANY D REW OUR ATTENTION TOWARDS SANCTION ACCORDED BY THE ADDL.CIT FOR REOPENING OF THE ASSESSMENT OBTAINED BY MOVING AN APPLICATION UNDER RIGHT TO INFORMATION ACT, 2005, AVAILABLE ON FILE AS ANNE XURE A. PERUSAL OF THE SANCTION ACCORDED BY ADDL. CIT IN TH E PRESCRIBED PROFORMA SHOWS THAT THERE IS A QUESTION NO.13 VIZ. : 13. WHETHER THE ADDL. CIT IS SATISFIED ON THE REAS ONS RECORDED UNDER SECTION 147 THAT IT IS A FIT CASE FO R ISSUE OF NOTICE UNDER SECTION 148 OF THE IT ACT. ITA NO.89/DEL/2012 CO NO.57/DEL/2012 8 11. IN RESPONSE TO AFORESAID QUESTION NO.13 IN THE PRESCRIBED PROFORMA, ADDL. CIT HAS WRITTEN YES. I AM SATISFIED. NO DOUBT, COLUMNS OF REASONS RECORDED WAS THERE AND IT IS ALS O MENTIONED IN COLUMN NO.12 THAT REASONS FOR BELIEF THAT INCOME HA S ESCAPED ASSESSMENT ARE AS PER ANNEXURE ENCLOSED BUT SUCH AN NEXURE HAS NOT BEEN PRODUCED BEFORE THE BENCH FOR PERUSAL. 12. APPARENTLY, FROM THE APPROVAL RECORDED AND WORD S USED THAT YES. I AM SATISFIED., IT HAS PROVED ON RECORD THAT THE SANCTION IS MERELY MECHANICAL AND ADDL.CIT HAS NOT APPLIED INDE PENDENT MIND WHILE ACCORDING SANCTION AS THERE IS NOT AN IO TA OF MATERIAL ON RECORD AS TO WHAT DOCUMENTS HE HAD PERUSED AND WHAT WERE THE REASONS FOR HIS BEING SATISFIED TO ACCORD THE SANCT ION TO INITIATE THE REOPENING OF ASSESSMENT U/S 148 OF THE ACT. 13. EVEN AO WHILE RECORDING THE REASONS FOR INITIAT ING THE REOPENING OF ASSESSMENT HAS NOT APPLIED HIS MIND IN DEPENDENTLY. WHEN WE PERUSE THE REASONS RECORDED, AVAILABLE AT P AGES 31-32 OF THE PAPER BOOK, THE ENTIRE REASONS HAVE BEEN BASED ON THE STATEMENT OF ONE SHRI P.K. JINDAL, WHO HAS FURNISHED THE LIST OF COMPANIES STATED TO BE NOT DOING ANY BUSINESS ACTIVITIES BUT ENGAGED IN PROVIDING ACCOMMODATION ENTRIES. BEFORE ISSUING TH E NOTICE AO APPEARED TO HAVE NOT EXAMINED THE PROFILE OF THE SA ID COMPANIES TO ARRIVE AT A LOGICAL CONCLUSION SO AS TO ISSUE THE N OTICE U/S 148 OF THE ITA NO.89/DEL/2012 CO NO.57/DEL/2012 9 ACT. WHEN THIS FACT IS EXAMINED IN THE LIGHT OF TH E COMPLETED ASSESSMENT OF THE ASSESSEE U/S 143 (3), ALL THE DOC UMENTS CONCERNING SHARE APPLICATION MONEY, NOW AVAILABLE A T PAGES 1 TO 30 OF THE PAPER BOOK, WERE SUPPLIED TO THE AO. THIS F ACT HAS NOT BEEN TAKEN INTO CONSIDERATION BY THE AO BEFORE INITIATIN G THE PROCEEDINGS U/S 147/148 OF THE ACT. HOWEVER, SINCE REOPENING OF ASSESSMENT IN THIS CASE IS OTHERWISE NOT SUSTAINABL E, WE ARE NOT ENTERING INTO ANY MERITS. 14. HONBLE SUPREME COURT IN CASE CITED AS CIT VS. S. GOYANKA LIME & CHEMICAL LTD. (2015) 64 TAXMANN.COM 313 (S C) EXAMINED THE IDENTICAL ISSUE AS TO ACCORDING THE SA NCTION FOR REOPENING THE ASSESSMENT U/S 148 OF THE ACT BY MERE LY RECORDING YES. I AM SATISFIED. AND HELD THAT REOPENING ON T HE BASIS OF MECHANICAL SANCTION IS INVALID BY RETURNING FOLLOWI NG FINDINGS :- SECTION 151, READ WITH SECTION 148 OF THE INCOME- TAX ACT, 1961 - INCOME ESCAPING ASSESSMENT - SANCTION FOR IS SUE OF NOTICE (RECORDING OF SATISFACTION) - HIGH COURT BY IMPUGNE D ORDER HELD THAT WHERE JOINT COMMISSIONER RECORDED SATISFACTION IN MECHANICAL MANNER AND WITHOUT APPLICATION OF MIND T O ACCORD SANCTION FOR ISSUING NOTICE UNDER. SECTION 148, REO PENING OF ASSESSMENT WAS INVALID - WHETHER SPECIAL LEAVE PETI TION FILED AGAINST IMPUGNED ORDER WAS TO BE DISMISSED - HELD, YES [IN FAVOUR OF ASSESSEE] SEARCH AND SEIZURE-PROCEDURE FOR BLACK ASSESSMENT- SEARCH WAS CONDUCTED AT RESIDENTIAL AND BUSINESS PR EMISES OF ASSESSEE AND NOTICE FOR BLOCK ASSESSMENT U/S. 158-B C WAS ISSUED- FOR BLOCK PERIOD, RETURNS WERE FILED THAT WERE PROC ESSED U/S. 143 (1)- HOWEVER, NOTICE U/S. 148 WAS ISSUED BY AO, ON BASIS OF CERTAIN REASONS RECORDED-ASSESSEE OBJECTED TO SAME BEFORE AO, THAT WAS REJECTED AND ASSESSMENT WAS COMPLETED U/SS . 143(3) AND ITA NO.89/DEL/2012 CO NO.57/DEL/2012 10 147-CIT(A) FOUND THAT REASON RECORDED BY JOINT COMM ISSIONER OF INCOME TAX, FOR ACCORDING SANCTION, WAS MERELY R ECORDING I AM SATISFIED'-ACTION FOR SANCTION WAS ALLEGED TO BE WITHOUT APPLICATION OF MIND AND TO BE DONE IN MECHANICAL MA NNER-HELD, WHILE ACCORDING SANCTION, JOINT COMMISSIONER, INCOM E TAX ONLY RECORDED 'YES, I AM SATISFIED'-MECHANICAL WAY OF RE CORDING SATISFACTION BY JOINT COMMISSIONER, THAT ACCORDED S ANCTION FOR ISSUING NOTICE U/S. 147, WAS CLEARLY UNSUSTAINABLE- ON SUCH CONSIDERATION, BOTH APPELLATE AUTHORITIES INTERFERE D INTO MATTER- NO ERROR WAS COMMITTED WARRANTING RECONSIDERATION-A S FAR AS EXPLANATION TO S. 151, BROUGHT INTO FORCE BY FINANC E ACT, 2008 WAS CONCERNED, SAME ONLY PERTAINED TO ISSUANCE OF N OTICE AND NOT WITH REGARD TO MANNER OF RECORDING SATISFACTION-AME NDED PROVISION DID NOT HELP REVENUE-NO QUESTION OF LAW I NVOLVED IN MATTER, THAT WARRANTED RECONSIDERATION-REVENUE'S APPEALS DISMISSED. 15. THE HONBLE DELHI HIGH COURT HAS ALSO DECIDED T HIS LEGAL ISSUE IN CASE CITED AS PR. CIT VS. N.C. CABLES LTD. IN ITA 335/2015 ORDER DATED 11.01.2017 BY RETURNING FOLLOWING FINDI NGS :- REASSESSMENT-ISSUANCE OF NOTICE-SANCTION FOR ISSU E OF NOTICE-ASSESSEE HAD IN ITS RETURN FOR A Y 2001-02 C LAIMED THAT SUM OF RS. 1 CRORE WAS RECEIVED TOWARDS SHARE APPLI CATION AMOUNTS AND A FURTHER SUM OF THIRTY FIVE LAKHS WAS CREDITED TO IT AS AN ADVANCE TOWARDS LOAN-ORIGINAL ASSESSMENT W AS COMPLETED U/S 143(3)-HOWEVER, PURSUANT TO REASSESSM ENT NOTICE, WHICH WAS DROPPED DUE TO TECHNICAL REASONS, AND LAT ER NOTICE WAS ISSUED AND ASSESSMENTS WERE TAKEN UP AFRESH-AFTER C ONSIDERING SUBMISSIONS OF ASSESSEE AND DOCUMENTS PRODUCED IN REASSESSMENT PROCEEDINGS, AO ADDED BACK A SUM OF RS.1,35,00,000-CIT(A) HELD AGAINST ASSESSEE ON LEGA LITY OF REASSESSMENT NOTICE BUT ALLOWED ASSESSEE'S APPEAL O N MERITS HOLDING THAT AO DID NOT CONDUCT APPROPRIATE ENQUIRY TO CONCLUDE THAT SHARE INCLUSION AND ADVANCES RECEIVED WERE FRO M BOGUS ENTITIES-TRIBUNAL ALLOWED ASSESSEE'S APPEAL ON MERI TS-REVENUE APPEALED AGAINST APPELLATE ORDER ON MERITS-ASSESSEE 'S CROSS APPEAL WAS ON CORRECTNESS OF REOPENING OF ASSESSMEN T- TRIBUNAL UPHELD ASSESSEE'S CROSS-OBJECTIONS AND DISMISSED RE VENUE'S APPEAL HOLDING THAT THERE WAS NO PROPER APPLICATION OF MIND BY CONCERNED SANCTIONING AUTHORITY U/S SECTION 151 AS A PRE- CONDITION FOR ISSUING NOTICE U/S 147/148-HELD, SECT ION 151 STIPULATES THAT CIT (A), WHO WAS COMPETENT AUTHORIT Y TO AUTHORIZE REASSESSMENT NOTICE, HAD TO APPLY HIS MIND AND FORM OPINION- MERE APPENDING OF EXPRESSION 'APPROVED' SAYS NOTHIN G-IT WAS NOT AS IF CIT (A) HAD TO RECORD ELABORATE REASONS FOR A GREEING WITH NOTING PUT UP-AT SAME TIME, SATISFACTION HAD TO BE RECORDED OF ITA NO.89/DEL/2012 CO NO.57/DEL/2012 11 GIVEN CASE WHICH COULD BE REFLECTED IN BRIEFEST POS SIBLE MANNER- IN PRESENT CASE, EXERCISE APPEARS TO HAVE BEEN RITU ALISTIC AND FORMAL RATHER THAN MEANINGFUL, WHICH WAS RATIONALE FOR SAFEGUARD OF APPROVAL BY HIGHER RANKING OFFICER-RE VENUE'S APPEAL DISMISSED. 16. FURTHERMORE, PERUSAL OF THE NOTING SHEET DATED 09.03.2010 TO 30.12.2010 MADE AVAILABLE TO THE BENCH FOR PERUSAL SHOWS THAT ONLY AO HAS RECORDED THAT ADDL.CIT HAS CONSIDERED T HE REASONS RECORDED BEFORE ACCORDING THE SANCTION, HOWEVER EVE N NO PRIMA FACIE MATERIAL IS THERE, IF ADDL.CIT HAS APPLIED HI S MIND BY CONSIDERING THE REASONS RECORDED BEFORE ACCORDING T HE SANCTION. WE ARE OF THE CONSIDERED VIEW THAT THE AO WHO HAS R ECORDED THE REASONS CANNOT ENTER INTO THE MIND OF THE SANCTIONI NG AUTHORITY (ADDL.CIT) DISCHARGING THE QUASI-JUDICIAL FUNCTION FOR ACCORDING VALID SANCTION FOR REOPENING THE ASSESSMENT. 17. MOREOVER, ACCORDING SANCTION IS NOT A SUPERVISO RY ROLE RATHER IT IS A QUASI-JUDICIAL FUNCTION TO BE PERFORMED BY THE ADDL.CIT AS REQUIRED U/S 151 OF THE ACT. WHEN THE REVENUE DEPA RTMENT IS MANNED BY HIGHLY QUALIFIED OFFICERS THEY ARE TO EVO LVE LEGALLY SUSTAINABLE STANDARD OPERATING PROCEDURE FOR DISCHA RGING QUASI- JUDICIAL FUNCTION. 16. HONBLE HIGH COURT OF DELHI IN CASE CITED AS SABH INFRASTRUCTURE LTD. VS. ACIT IN WP (C) 1357/2016 OR DER DATED 25.09.2017 HAS ISSUED GUIDELINES TO THE REVENUE AUTHORITIES W HILE ITA NO.89/DEL/2012 CO NO.57/DEL/2012 12 DECIDING THE ISSUE OF REOPENING U/S 147/148 OF THE ACT. OPERATIVE PART OF WHICH IS REPRODUCED AS UNDER:- 19. BEFORE PARTING WITH THE CASE, THE COURT WOULD LIKE TO OBSERVE THAT ON A ROUTINE BASIS, A LARGE NUMBER OF WRIT PETITIONS ARE FILED CHALLENGING THE REOPENING OF ASSESSMENTS BY THE REVENUE UNDER SECTIONS 147 AND 148 OF THE ACT AND DESPITE NUMEROUS JUDGMENTS ON TH IS ISSUE, THE SAME ERRORS ARE REPEATED BY THE CONCERNE D REVENUE AUTHORITIES. IN THIS BACKGROUND, THE COURT WOULD LIKE THE REVENUE TO ADHERE TO THE FOLLOWING GUIDELINES IN MATTERS OF REOPENING OF ASSESSMENTS: (I) WHILE COMMUNICATING THE REASONS FOR REOPENING T HE ASSESSMENT, THE COPY OF THE STANDARD FORM USED BY T HE AO FOR OBTAINING THE APPROVAL OF THE SUPERIOR OFFIC ER SHOULD ITSELF BE PROVIDED TO THE ASSESSEE. THIS WOU LD CONTAIN THE COMMENT OR ENDORSEMENT OF THE SUPERIOR OFFICER WITH HIS NAME, DESIGNATION AND DATE. IN OTH ER WORDS, MERELY STATING THE REASONS IN A LETTER ADDRE SSED BY THE AO TO THE ASSESSEE IS TO BE AVOIDED; (II) THE REASONS TO BELIEVE OUGHT TO SPELL OUT ALL THE REASONS AND GROUNDS AVAILABLE WITH THE AO FOR RE- OPENING THE ASSESSMENT - ESPECIALLY IN THOSE CASES WHERE THE FIRST PROVISO TO SECTION 147 IS ATTRACTED . THE REASONS TO BELIEVE OUGHT TO ALSO PARAPHRASE ANY INVESTIGATION REPORT WHICH MAY FORM THE BASIS OF TH E REASONS AND ANY ENQUIRY CONDUCTED BY THE AO ON THE SAME AND IF SO, THE CONCLUSIONS THEREOF; (III) WHERE THE REASONS MAKE A REFERENCE TO ANOTHER DOCUMENT, WHETHER AS A LETTER OR REPORT, SUCH DOCUM ENT AND/ OR RELEVANT PORTIONS OF SUCH REPORT SHOULD BE ENCLOSED ALONG WITH THE REASONS; (IV) THE EXERCISE OF CONSIDERING THE ASSESSEES OBJ ECTIONS TO THE REOPENING OF ASSESSMENT IS NOT A MECHANICAL RITUAL. IT IS A QUASI-JUDICIAL FUNCTION. THE ORDER DISPOSING OF THE OBJECTIONS SHOULD DEAL WITH EACH OBJECTION AND GIVE PROPER REASONS FOR THE CONCLUSIO N. NO ATTEMPT SHOULD BE MADE TO ADD TO THE REASONS FOR ITA NO.89/DEL/2012 CO NO.57/DEL/2012 13 REOPENING OF THE ASSESSMENT BEYOND WHAT HAS ALREADY BEEN DISCLOSED. 17. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, REASS ESSMENT OPENED BY THE AO IN THIS CASE IS NOT SUSTAINABLE IN THE EYES OF LAW, HENCE HEREBY QUASHED. CONSEQUENTLY, CROSS OBJECTIO N FILED BY THE ASSESSEE COMPANY STANDS ALLOWED AND THE APPEAL FILE D BY THE REVENUE HAS BECOME INFRUCTUOUS. ORDER PRONOUNCED IN OPEN COURT ON THIS 9 TH DAY OF FEBRUARY, 2018. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 9 TH DAY OF FEBRUARY, 2018 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XIX, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.