M/s. RMG Polyvinyl (I) Ltd., New Delhi V. DCIT, New Delhi

ITA 1596/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8335 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 06-04-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 18-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRAVAN GOTRU
• Assessee Lawyers: SANJAY JAIN C AS
• Keywords: Reopening of assessment; Gift; Depreciation; Principle of natural justice; Question of law; Tangible material; Accommodation entries; Reason to believe; Reassessment proceedings
• Section: 143(3); 133(6); 148; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F : NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 1596/DEL/2014 ASSESSMENT YEAR: 2004-05 M/S RMG POLYVINYL (I) LTD. VS. DCIT, CIRCLE 15(1) (FORMERLY KNOWN AS PINE VIEW NEW DELHI CONSTRUCTION AND TRADERS P. LTD.) 302, ELITE HOUSE, 36, COMMUNITY CENTRE, KAILASH COLONY EXTN., NEW DELHI (PAN: AAACG2886R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. RAKESH JOSHI & SH. SANJA Y JAIN, CAS REVENUE BY : SH. SHRAVAN GOTRU, SR. DR DATE OF HEARING : 11-04-2016 DATE OF ORDER : 12-04-2016 ORDER PER H.S. SIDHU, J.M. THE ASSESSEE HAS FILED THE APPEAL AGAINST THE ORDE R DATED 03.12.2013 OF THE LD. CIT(A)-XVIII, NEW DELHI PERTAINING TO ASSES SMENT YEAR 2004-05. THE ASSESSEE HAS FILED THE CONCISE GROUNDS OF APPEAL WH ICH ARE REPRODUCED AS UNDER:- 1. ON THE FACT AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F LEARNED ASSESSING OFFICER IN REOPENING THE CASE, WITHOUT CO NSIDERING THE PROVISION OF LAW, HENCE THE ORDER PASSED U/S.143(3) R.W.S 147 IS VOID & BAD IN LAW AND NEEDS TO BE QUASHED. ITA NO. 1596/D EL/2014 2 2. WITHOUT PREJUDICE TO ABOVE, ON THE FACTS AND CI RCUMSTANCES OF THE CASE, THE D. CIT(A) ERRED IN NOT APPRECIATING T HE FACT THAT THE NOTICE U/S 148 HAS NEITHER ISSUED BY JURISDICTIONAL ASSESSING OFFICER NOR SERVED ON THE ASSESSEE MAKING THE PROCEEDINGS INVALID AND VOID AB-INITIO. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WE LL AS IN LAW, THE LEARNED ASSESSING OFFICER AS WELL AS LEARN ED CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT THERE WAS N O EFFECTIVE NOTICE U/S.143(2) OF THE INCOME TAX ACT, 1961 AND ACCORDIN GLY ASSESSMENT ORDER PASSED U/S.143 (3) R.W.S 147 IS BA D IN LAW. 4. ON THE FACTS AND CIRCUMSTANCES OF THE' CASE AS W ELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER IN MAKING AN ADDITION OF RS.1,13,00,000/- BY TREATING THE SUM RECEIVED ON AC COUNT OF GENUINE SHARE CAPITAL 8: SHARE PREMIUM AS ALLEGED U NDISCLOSED INCOME, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTA NCES OF THE CASE. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN NOT ADMITTING AND CONSIDERING THE EVIDENCE FILED BEFORE HIM WHICH WAS VERY CRUCIAL IN DECIDING THE APPEAL BY HOLDING THAT THE APPELLAN T'S CASE IS NOT COVERED UNDER ANY OF THE CIRCUMSTANCES PROVIDED UND ER RULE 46A OF THE I.T. RULES, THEREBY DENYING THE PRINCIPLES O F NATURAL JUSTICE, WHICH IS ARBITRARY, ILLEGAL AND AGAINST THE PROVISI ONS OF LAW. ITA NO. 1596/D EL/2014 3 6. ON THE FACTS AND CIRCUMSTANCES OF THE. CASE A S WELL AS IN LAW, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACT ION LEARNED ASSESSING OFFICER IN MAKING AN ADDITION ON THE BASI S OF THE STATEMENT OF THIRD PARTY, WITHOUT PROVIDING THE OPP ORTUNITY TO CROSS EXAMINATION OF SUCH PARTY AS REQUESTED BY THE APPEL LANT, WITHOUT ALLOWING CROSS EXAMINATION' IS I IN VIOLATION OF PR INCIPLES OF NATURAL JUSTICE AND THUS THE ORDER IS VOID IN LAW A ND NEEDS TO BE QUASHED. THE APPELLANT KINDLY PRAYS TO YOUR HONOURS' TO KIND LY ALLOW IT TO REVISE THE SAID GROUNDS OF APPEAL. THE APPELLANT FURTHER CRAVES LEAVES TO ADD, ALTER, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEAR ING. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAD FILED RETURN DECLARING INCOME OF RS. 4,38,958/- ON 31.10.2014 WHICH WAS PR OCESSED U/S. 143(1) OF THE ACT ON 4.1.2005. LATER ON AN INFORMATION WAS RECEI VED FROM THE INVESTIGATION WING, NEW DELHI THAT THE ASSESSEE IS AMONGST THE BE NEFICIARIES OF BOGUS ACCOMMODATION ENTRIES TOTALING TO RS. 1,56,00,000/- . ACCORDINGLY, THE PROCEEDINGS U/S. 147 OF THE ACT WERE INITIATED AND NOTICE U/S. 148 OF THE ACT WAS ISSUED ON 25.3.2011 IN NAME OF M/S PINE VIEW CONSTR UCTION & TRADERS P. LTD. AND WAS SERVED THROUGH AFFIXTGURE ON 31.3.2011 AS T HE NOTICE SENT THROUGH SPEED POST WAS RECEIVED BACK UNSERVED WITH THE POSTAL REM ARKS NO SUCH COMPANY OF THIS NAME AT THE GIVEN ADDRESS. NO COMPLIANCE WAS MADE THEREOF. THEREAFTER ON THE BASIS OF THE DETAILS OF THE BANK ACCOUNT NU MBER AND BRANCH AVAILABLE IN ITA NO. 1596/D EL/2014 4 THE INFORMATION RECEIVED FROM INVESTIGATION WING, NOTICE U/S. 133(6) OF THE ACT WAS ISSUED TO THE BANKERS I.E. CANARA BANK, SAFDARJ UNG DEVELOPMENT AREA, NEW DELHI. FROM THE INFORMATION RECEIVED IT WAS REVEAL ED THAT THE NAME OF THE COMPANY HAS BEEN CHANGED TO RMG POLYVINYL INDIA LTD . HAVING ITS ADDRESS AS 302, ELITE HOUSE, 38, COMMUNITY CENTRE, KAILASH COL ONY EXTN., NEW DELHI-48 AND PAN AAACG 2886R. THE ASSESSEE VIDE LETTER DAT ED 8.11.2011, STATED THAT IT HAD FILED RETURN FOR THE YEAR ON 31.10.2004. T HOUGH THE ASSESSEE HAD OBJECTED TO THE PRESENT PROCEEDINGS BUT SO FAR AS FOR THE PU RPOSE OF COMPLETION OF PRESENT PROCEEDINGS THE SAME HAS BEEN CONSIDERED AS HAS BEE N FILED IN COMPLIANCE TO NOTICE U/S. 148 OF THE ACT. THE ASSESSEE VIDE HIS LETTER DATED 29.11.2011 FILED OBJECTIONS TO THE REOPENING OF THE ASSESSMENT PROCE EDINGS AND THE SAME WERE DULY COMPLETED BY THE AO. ACCORDINGLY, AO HELD T HAT MONEY RECEIVED ON ACCOUNT OF SHARE APPLICATION IS TREATED AS UNDISCL OSED INCOME OF THE ASSESSEE BY COMPLETING THE ASSESSMENT AT RS. 1,17,38,958/- U/S . 147/143(3) OF THE ACT VIDE ORDER DATED 31.12.2011. 3. AGAINST THE ORDER OF THE AO, ASSESSEE APPEALED BEFORE THE LD. CIT(A), CHALLENGING THE REOPENING AS WELL AS THE ADDITIONS IN DISPUTE WHO VIDE IMPUGNED ORDER DATED 03.12.2013 HAS DISMISSED THE A PPEAL OF THE ASSESSEE. 4. AGGRIEVED WITH THE AFORESAID ORDER OF THE LD . CIT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL FOR CHALLENGING THE LEGA L ISSUE OF REOPENING OF ASSESSMENT AS WELL AS THE ADDITION IN DISPUTE. 5. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSES SEE HAS ONLY ARGUED THE LEGAL GROUND CHALLENGING THE VALIDITY OF REOPENING U/S. 147 OF THE I.T. ACT BY ITA NO. 1596/D EL/2014 5 STATING THAT ACTION OF THE ASSESSING OFFICER IS ILL EGAL, BECAUSE NO PROPER REASONS WERE RECORDED; NO NEXUS BETWEEN THE MATERIALS RELIE D UPON AND THE BELIEF FORMED FOR ESCAPEMENT OF INCOME; NO APPLICATION OF MIND; N O PROPER SATISFACTION WAS RECORDED BEFORE ISSUE OF NOTICE U/S. 148; NO INDEPE NDENT CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME AND NO PROPER SATISFACTION / APPROVAL HAS BEEN OBTAINED FROM THE ADDL. CIT. HE FURTHER SUBMITTE D THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE ITAT DECISION DATED 09.1.2015 IN THE CASE OF G&G PHARMA INDIA LIMITED V S. ITO PASSED IN ITA NO. 3149/DEL/2013 (AY 2003-04) IN WHICH THE JUDICIAL M EMBER IS THE AUTHOR. HE FURTHER STATED THAT THE ABOVE DECISION OF THE ITAT DATED 9.1.2015 HAS BEEN UPHELD BY THE HONBLE JURISDICTIONAL HIGH COURT IN ITS DECISION DATED 08.10.2015 IN ITA NO. 545/2015 IN THE CASE OF PR. C IT-4 VS. G&G PHARMA INDIA LTD. IN THIS BEHALF, HE FILED THE COPY OF THE ORDE R DATED 9.1.2015 OF THE ITAT, DELHI BENCH PASSED IN THE CASE OF G&G PHARMA INDIA LTD VS. ITO (SUPRA). THEREFORE, HE REQUESTED THAT BY FOLLOWING THE DECIS ION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PR. CIT V S. G&G PHARMA LTD. (SUPRA) THE REASSESSMENT PROCEEDINGS OF THE AO MAY BE QUASH ED BY ACCEPTING THE APPEAL FILED BY THE ASSESSEE. 6. ON THE CONTRARY, LD. DR RELIED UPON THE ORDER PA SSED BY THE CIT(A) ON THE ISSUE OF VALIDITY OF REOPENING AND STATED THAT LD. CIT(A) HAS RIGHTLY UPHELD THE ACTION OF THE AO OF REOPENING AND ALSO RIGHTLY UPHELD THE ADDITION IN DISPUTE. ITA NO. 1596/D EL/2014 6 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE ORDERS OF THE REVENUE AUTHO RITIES AND THE CASE LAW CITED BY THE ASSESSEES COUNSEL ON THE ISSUE IN DISPUTE. IN OUR VIEW, IT IS VERY MUCH NECESSARY TO REPRODUCE THE REASONS RECORDED BY THE AO BEFORE ISSUE OF NOTICE U/S. 148 AND THE APPROVAL OF THE LD. ADDL. CIT, RA NGE-17, NEW DELHI FOR REOPENING OF ASSESSMENT WHICH READS AS UNDER:- FORM FOR RECORDING THE REASONS FOR INITIATING PROCEEDINGS U/S. 148 AND FOR OBTAINING THE APPROVAL OF THE ADDL. COMMISSIONER OF INCOME TAX / COMMISSIONER OF INCOME TAX 1. NAME & ADDRESS OF THE ASSESSEE M/S PINE VIEW CONSTRUCTION & TRADERS PVT. LTD., 107, PADAM CHAMBERS, 3924/26, PADAM SINGH ROAD, KAROL BAGH, NEW DELHI 110 005 2. PAN AACCP0184F 3. STATUS PVT. LTD. COMPANY 4. RANGE / WARD ITO, WARD-14(2), NEW DELHI 5. ASSESSMENT YEAR IN RESPECT OF WHICH IT IS PROPOSED TO ISSUE NOTICE U/S. 148. 2004-05 6. THE QUANTUM OF INCOME WHICH HAS ESCAPED ASSESSMENT. RS. 1,56,00,000/- 7. WHETHER THE PROVISIONS OF SECTION 147(A), 147(B) OR 147(C) ARE APPLICABLE OR ALL THE SECTIONS ARE APPLICABLE. 147(A) OF THE I.T. ACT, 1961 8. WHETHER THE ASSESSMENT IS PROPOSED TO BE MADE FOR THE FIRST TIME. IF THE REPLY IS IN AFFIRMATIVE PLEASE STATE. WHETHER ANY VOLUNTARY YES NO ITA NO. 1596/D EL/2014 7 RETURN HAD ALREADY BEEN FILED. IF SO, DATE OF FILING THE SAID RETURN. NA 9. IF THE ANSWER TO ITEM 8 IS IN NEGATIVE PLEASE STATE THE INCOME ORIGINALLY ASSESSED WHETHER IT IS A CASE OF UNDER ASSESSMENT, ASSESSMENT AT TOO LOW A RATE, ASSESSMENT WHICH HAS BEEN MADE THE SUBJECT OF EXCESSIVE RELIEF OR ALLOWING OF EXCESSIVE LOSS OR DEPRECIATION. NA NA NA 10. WHETHER THE PROVISIONS OF SECTION 150(1) ARE APPLICABLE, IF THE REPLY IS IN THE AFFIRMATIVE, THE RELEVANT FACTS MAY BE STATED AGAINST ITEM NO. 11 AND IT MAY ALSO BE BROUGHT OUT THAT THE PROVISION OF SECTION 150(2) WOULD NOT STAND IN THE WAY OF INITIATING PROCEEDINGS U/S. 147. NO 11. REASONS FOR THE BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. INFORMATION HAS BEEN RECEIVED FROM THE INVESTIGATION WING OF THE INCOME-TAX DEPARTMENT THAT M/S PINE VIEW CONSTRUCTION & TRADERS PVT. LTD. IS A BENEFICIARY OF ACCOMMODATION ENTRIES RECEIVED FROM CERTAIN ESTABLISHED ENTRY OPERATORS IDENTIFIED BY THE INVESTIGATION WING DURING THE PERIOD RELEVANT TO A.Y. 2004-05. A COMPREHENSIVE INVESTIGATION WAS CARRIED OUT BY THE INVESTIGATION WING FOR IDENTIFICATION OF ENTRY OPERATORS ENGAGED IN THE BUSINESS OF MONEY LAUNDERING FOR THE BENEFICIARIES AND ON THE BASIS OF INVESTIGATION CARRIED OUT ITA NO. 1596/D EL/2014 8 AND EVIDENCES COLLECTED, A DETAILED REPORT HAS BEEN FORWARDED. IN THE INSTANT CASE, THE ASSESSEE IS FOUND TO BE THE BENEFICIARY OF ACCOMMODATION ENTRY FROM SUCH ENTRY OPERATORS AS PER THE TRANSACTION MENTIONED IN THE ENCLOSED ANNEXURE-'A' OF RS.1,56,00,000/-. THE ACCOMMODATION ENTRY PROVIDER; HAVE GIVEN ACCOMMODATION ENTRIES IN THE GRAB OF SHARE APPLICATION MONEY / EXPENSES / GIFT / PURCHASE OF SHARES ETC. THEY HAVE WORKED FOR COMMISSION. THE ASSESSEE IS A COMPANY INCORPORATED ON 11.09.1998. IT IS NOTICED THAT THERE IS NO RETURN OF COME IS AVAILABLE IN THE AST DATABASE OF INCOME-TAX DEPARTMENT. THEREFORE. IT IS CLEAR THAT THE ASSESSEE HAS NOT FILED RETURN OF INCOME FOR THE A.Y. 2004-05 AND CONSEQUENTLY HAS NOT OFFERED ANY INCOME FOR TAXATION. SOURCES OF THE TRANSACTIONS ARE NOT EXPLAINED. I, THEREFORE, HAVE REASON TO BELIEVE THAT ON ACCOUNT FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE TRULY AND FULLY ALL THE MATERIAL FACTS NECESSARY FOR ASSESSMENT FOR THE ABOVE ASSESSMENT YEAR, THE INCOME CHARGEABLE TO TAX TO THE EXTENT OF ACCOMMODATION ENTRY OF RS. 1,56,00,000/- HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF I.T. ACT. 1961. TO BRING TO TAX THE INCOME WHICH HAS ESCAPED ASSESSMENT, I PROPOSED TO ISSUE NOTICE U/S. 148 OF THE I.T. ACT. 1961. SINCE, FOUR YEARS HAS EXPIRED FROM THE END OF THE RELEVANT ASSESSMENT YEAR, AND NO SCRUTINY ASSESSMENT WAS COMPLETED ULS 143(3) IN THIS CASE FOR THE ITA NO. 1596/D EL/2014 9 SAID ASSESSMENT YEAR, THE REASONS RECORDED ABOVE FOR THE PURPOSE OF REOPENING OF ASSESSMENT IS PUT UP KIND SATISFACTION OF ADDL. COMMISSIONER OF INCOME TAX, RANGE-14, NEW DELHI IN TERMS OF THE PROVISO OF SECTION 151(2) OF THE I.T. ACT, 1961. DATED: 16.03.2011 SD/- (C.M. MEENA) ITO, WARD 14(2), NEW DELHI 12. WHETHER THE ADDL. CIT/CIT/CBDT IS SATISFIED ON THE REASONS RECORDED BY THE AO THAT IT IS A FIT CASE FOR THE ISSUE OF NOTICE U/S. 148. YES, IAM SATISFIED. DATED: 18/3/11 SD/- (MUKESH VERMA) ADDL. CIT, RANGE-14, NEW DELHI 8. AFTER GOING THROUGH THE REASONS RECORDED BY THE ASSESSING OFFICER/DCIT, CIRCLE 14(2), NEW DELHI FOR REOPENING AND THE APPRO VAL THEREOF BY THE LD. ADDL. CIT, RANGE-14, NEW DELHI, WE ARE OF THE VIEW THAT AO HAS NOT APPLIED HIS MIND SO AS TO COME TO AN INDEPENDENT CONCLUSION THAT HE HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED DURING THE YEAR. IN OUR VIEW THE REASONS ARE VAGUE AND ARE NOT BASED ON ANY TANGIBLE MATERIAL AS WELL AS ARE N OT ACCEPTABLE IN THE EYES OF LAW. THE AO HAS MECHANICALLY ISSUED NOTICE U/S. 14 8 OF THE ACT, ON THE BASIS OF INFORMATION ALLEGEDLY RECEIVED BY HIM FROM THE DIRE CTORATE OF INCOME TAX (INVESTIGATION), NEW DELHI. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE CASE LAW APPLICABLE IN THE CASE OF THE ASSESSEE, WE ARE OF THE CONSIDERED VIEW THAT THE REOPENING IN THE CA SE OF THE ASSESSEE FOR THE ASSTT. YEAR IN DISPUTE IS BAD IN LAW AND DESERVES TO BE QU ASHED. EVEN OTHERWISE, A PERUSAL OF THE ABOVE DEMONSTRATES THAT THE ADDL. C IT HAS WRITTEN YES, I AM ITA NO. 1596/D EL/2014 10 SATISFIED WHICH ESTABLISHES THAT HE HAS NOT RECORDED PROPER SATISFACTION / APPROVAL, BEFORE ISSUE OF NOTICE U/S. 148 OF THE I. T. ACT. THEREAFTER, THE AO HAS MECHANICALLY ISSUED NOTICE U/S. 148 OF THE ACT, ON THE BASIS OF INFORMATION ALLEGEDLY RECEIVED BY HIM FROM THE DIRECTORATE OF I NCOME TAX (INVESTIGATION), NEW DELHI. KEEPING IN VIEW OF THE FACTS AND CIRCU MSTANCES OF THE PRESENT CASE AND THE CASE LAW APPLICABLE IN THE CASE OF TH E ASSESSEE, WE ARE OF THE CONSIDERED VIEW THAT THE REOPENING IN THE CASE OF T HE ASSESSEE FOR THE ASSTT. YEAR IN DISPUTE IS BAD IN LAW AND DESERVES TO BE QUASHED . OUR VIEW IS SUPPORTED BY THE FOLLOWING JUDGMENTS/DECISIONS:- (A) THE TRIBUNAL IN ITS DECISION DATED 9.1.2015 PAS SED IN ITA NO. 3149/DEL/2013 (AY 2003-04) IN THE CASE OF G &G PHARMA INDIA LIMITED VS. ITO, HAS HELD UNDER:- 8. WE HAVE PERUSED THE AFORESAID REASONS RECORDED BY THE AO FOR REOPENING THE ASSESSMENT IN DISPUTE AND WE ARE OF THE CONSIDERED VIEW THAT THE AO HAS NOT APPLIED HIS MIND SO AS TO COME TO AN INDEPENDENT CONCLUSION THAT HE HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED DURING THE YEAR. A MERE REFERENCE IS MADE TO CERTAIN INFORMATION RECEIVED FROM THE INVESTIGATION WING WHICH WAS SUPPLIED TO THE ASSESSEE VIDE AOS LETTER DATED 15.9.2010. IN OUR VIEW THE REASONS ARE VAGUE AND ARE NOT BASED ON ANY TANGIBLE MATERIAL AS WELL AS A RE ITA NO. 1596/D EL/2014 11 NOT ACCEPTABLE IN THE EYES OF LAW. THE AO HAD MECHANICALLY ISSUED NOTICES U/S. 148 OF THE ACT, ON THE BASIS OF INFORMATION ALLEGEDLY RECEIVED BY HIM FROM THE DIRECTORATE OF INVESTIGATION, JHANDEWALAN, NEW DELHI. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE LAW APPLICABLE IN THE CASE OF THE ASSESSEE, WE ARE OF T HE CONSIDERED VIEW THAT THE REOPENING IN THE CASE OF T HE ASSESSEE FOR THE ASSTT. YEAR IN DISPUTE IS BAD IN L AW AND DESERVES TO BE QUASHED. WE DRAW OUR SUPPORT FROM THE JUDGMENTS OF THE HONBLE HIGH COURT OF DELHI IN THE FOLLOWING CASES:- (I) SIGNATURE HOTELS (P)_ LTD. VS. ITO AND ANOTHER REPORTED IN 338 ITR 51 (DEL) HAS UNDER SIMILAR CIRCUMSTANCES AS FOLLOWS:- FOR THE A.Y. 2003-04, THE RETURN OF INCOME OF THE ASSESSEE COMPANY WAS ACCEPTED U/S.143(1) OF THE INCOME-TAX ACT, 1961 AND WAS NOT SELECTED FOR SCRUTINY. SUBSEQUENTLY, THE ASSESSING OFFICER ISSUED NOTICE U/S.148 WHICH WAS OBJECTED BY THE ASSESSEE. THE ASSESSING OFFICER REJECTED THE OBJECTIONS. THE ASSESSEE COMPANY FILED WRIT PETITION AND CHALLENGED THE NOTICE AND THE ORDER ON OBJECTIONS. THE DELHI HIGH COURT ALLOWED THE WRIT PETITION AND HELD AS UNDER: ITA NO. 1596/D EL/2014 12 (I) SECTION 147 OF THE INCOME-TAX ACT, 1961, IS WIDE BUT NOT PLENARY. THE ASSESSING OFFICER MUST HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THIS IS MANDATORY AND THE REASON TO BELIEVE ARE REQUIRED TO BE RECORDED IN WRITING BY THE ASSESSING OFFICER. (II) A NOTICE U/S.148 CAN BE QUASHED IF THE BELIEF IS NOT BONA FIDE, OR ONE BASED ON VAGUE, IRRELEVANT AND NON-SPECIFIC INFORMATION. THE BASIS OF THE BELIEF SHOULD BE DISCERNIBLE FROM THE MATERIAL ON RECORD, WHICH WAS AVAILABLE WITH THE ASSESSING OFFICER, WHEN HE RECORDED THE REASONS. THERE SHOULD BE A LINK BETWEEN THE REASONS AND THE EVIDENCE/MATERIAL AVAILABLE WITH THE ASSESSING OFFICER. (III) THE REASSESSMENT PROCEEDINGS WERE INITIATED ON THE BASIS OF INFORMATION RECEIVED FROM THE DIRECTOR OF INCOME-TAX (INVESTIGATION) THAT THE PETITIONER HAD INTRODUCED MONEY AMOUNTING TO RS.5 LAKHS DURING F.Y. 2002-03 AS STATED IN THE ANNEXURE. ACCORDING TO THE INFORMATION, THE AMOUNT RECEIVED FROM A COMPANY, S, WAS NOTHING BUT AN ACCOMMODATION ENTRY AND THE ASSESSEE WAS THE BENEFICIARY. THE REASONS DID NOT SATISFY THE REQUIREMENTS OF SECTION 147 OF THE ACT. THERE WAS NO REFERENCE TO ANY DOCUMENT OR STATEMENT, EXCEPT THE ANNEXURE. THE ANNEXURE COULD NOT BE REGARDED AS A ITA NO. 1596/D EL/2014 13 MATERIAL OR EVIDENCE THAT PRIMA FACIE SHOWED OR ESTABLISHED NEXUS OR LINK WHICH DISCLOSED ESCAPEMENT OF INCOME. THE ANNEXURE WAS NOT A POINTER AND DID NOT INDICATE ESCAPEMENT OF INCOME. (IV) FURTHER, THE ASSESSING OFFICER DID NOT APPLY HIS OWN MIND TO THE INFORMATION AND EXAMINE THE BASIS AND MATERIAL OF THE INFORMATION. THERE WAS NO DISPUTE THAT THE COMPANY, S, HAD A PAID UP CAPITAL OF RS.90 LAKHS AND WAS INCORPORATED ON JANUARY 4, 1989, AND WAS ALSO ALLOTTED A PERMANENT ACCOUNT NUMBER IN SEPTEMBER 2001. THUS, IT COULD NOT BE HELD TO BE A FICTITIOUS PERSON. THE REASSESSMENT PROCEEDINGS WERE NOT VALID AND WERE LIABLE TO THE QUASHED. (II). IN THE CASE OF CIT VS. ATUL JAIN REPORTED IN 299 ITR 383 IT HAS BEEN HELD AS UNDER:- HELD, DISMISSING THE APPEALS, THAT THE ONLY INFORMATION WAS THAT THE ASSESSEE HAD TAKEN A BOGUS ENTRY OF CAPITAL GAINS BY PAYING CASH ALONG WITH SOME PREMIUM FOR TAKING A CHEQUE FOR THAT AMOUNT. THE INFORMATION DID NOT INDICATE THE SOURCE OF THE CAPITAL GAINS WHICH IN THIS CASE WERE SHARES. THERE WAS NO INFORMATION WHICH SHARES HAD BEEN TRANSFERRED AND WITH WHOM THE TRANSACTION HAD TAKEN PLACE. THE AO DID NOT VERIFY THE CORRECTNESS OF INFORMATION RECEIVED BY HIM ITA NO. 1596/D EL/2014 14 BUT MERELY ACCEPTED THE TRUTH OF THE VAGUE INFORMATION IN A MECHANICAL MANNER. THE AO HAD NOT EVEN RECORDED HIS SATISFACTION ABOUT THE CORRECTNESS OR OTHERWISE OF THE INFORMATION FOR ISSUING A NOTICE U/S 148. WHAT HAD BEEN RECORDED BY THE AO AS HIS REASONS TO BELIEVEWAS NOTHING MORE THAN A REPORT GIVEN BY HIM TO THE COMMISSIONER. THE SUBMISSION OF THE REPORT WAS NOT THE SAME AS RECORDING OF REASONS TO BELIEVE FOR ISSUING A NOTICE. THE AO HAD CLEARLY SUBSTITUTED FORM FOR SUBSTANCE AND THEREFORE THE ACTION OF THE AO WAS NOT SUSTAINABLE. 9. IN VIEW OF ABOVE, WE ARE OF THE CONSIDERED VIE W THAT ABOVE ISSUE IS EXACTLY THE SIMILAR TO THE ISSUE I NVOLVED IN THE PRESENT APPEAL AND IS SQUARELY COVERED BY THE A FORESAID DECISIONS OF THE HONBLE HIGH COURT OF DELHI. HEN CE, RESPECTFULLY FOLLOWING THE ABOVE PRECEDENT, WE DECI DE THE LEGAL ISSUE IN DISPUTE IN FAVOR OF THE ASSESSEE AND AGAINST THE REVENUE AND ACCORDINGLY QUASH THE REASSESSMENT PROCEEDINGS. THE OTHER ISSUES ARE NOT DEALT WITH AS THE SAME HAVE BECOME ACADEMIC IN NATURE. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. (B). PR. CIT VS. G&G PHARMA INDIA LTD. IN ITA NO. 545/2015 DATED 8.10.2015 OF THE DELHI HIGH COURT WHEREIN THE HONBLE COURT HAS ADJUDICATED THE ISSUE AS UNDER:- 12. IN THE PRESENT CASE, AFTER SETTING OUT FOUR EN TRIES, STATED TO HAVE BEEN RECEIVED BY THE ASSESSEE ON A S INGLE ITA NO. 1596/D EL/2014 15 DATE I.E. 10TH FEBRUARY 2003, FROM FOUR ENTITIES WH ICH WERE TERMED AS ACCOMMODATION ENTRIES, WHICH INFORMATION WAS GIVEN TO HIM BY THE DIRECTORATE OF INVESTIGATION, T HE AO STATED: 'I HAVE ALSO PERUSED VARIOUS MATERIALS AND REPORT FROM INVESTIGATION WING AND ON THAT BASIS IT IS EVI DENT THAT THE ASSESSEE COMPANY HAS INTRODUCED ITS OWN UNACCOU NTED MONEY IN ITS BANK ACCOUNT BY WAY OF ABOVE ACCOMMODA TION ENTRIES.' THE ABOVE CONCLUSION IS UNHELPFUL IN UNDERSTANDING WHETHER THE AO APPLIED HIS MIND TO TH E MATERIALS THAT HE TALKS ABOUT PARTICULARLY SINCE HE DID NOT DESCRIBE WHAT THOSE MATERIALS WERE. ONCE THE DATE O N WHICH THE SO CALLED ACCOMMODATION ENTRIES WERE PROVIDED I S KNOWN, IT WOULD NOT HAVE BEEN DIFFICULT FOR THE AO, IF HE HAD IN FACT UNDERTAKEN THE EXERCISE, TO MAKE A REFERENC E TO THE MANNER IN WHICH THOSE VERY ENTRIES WERE PROVIDED IN THE ACCOUNTS OF THE ASSESSEE, WHICH MUST HAVE BEEN TEND ERED ALONG WITH THE RETURN, WHICH WAS FILED ON 14TH NOVE MBER 2004 AND WAS PROCESSED UNDER SECTION 143(3) OF THE ACT. WITHOUT FORMING A PRIMA FACIE OPINION, ON THE BASIS OF SUCH MATERIAL, IT WAS NOT POSSIBLE FOR THE AO TO HAVE SI MPLY CONCLUDED: 'IT IS EVIDENT THAT THE ASSESSEE COMPANY HAS INTRODUCED ITS OWN UNACCOUNTED MONEY IN ITS BANK BY WAY OF ACCOMMODATION ENTRIES'. IN THE CONSIDERED VIEW OF T HE ITA NO. 1596/D EL/2014 16 COURT, IN LIGHT OF THE LAW EXPLAINED WITH SUFFICIEN T CLARITY BY THE SUPREME COURT IN THE DECISIONS DISCUSSED HEREIN BEFORE, THE BASIC REQUIREMENT THAT THE AO MUST APPLY HIS MI ND TO THE MATERIALS IN ORDER TO HAVE REASONS TO BELIEVE T HAT THE INCOME OF THE ASSESSEE ESCAPED ASSESSMENT IS MISSIN G IN THE PRESENT CASE. 13. MR. SAWHNEY TOOK THE COURT THROUGH THE ORDER OF THE CIT(A) TO SHOW HOW THE CIT (A) DISCUSSED THE MATERI ALS PRODUCED DURING THE HEARING OF THE APPEAL. THE COUR T WOULD LIKE TO OBSERVE THAT THIS IS IN THE NATURE OF A POST MORTEM EXERCISE AFTER THE EVENT OF REOPENING OF THE ASSESSMENT HAS TAKEN PLACE. WHILE THE CIT MAY HAVE PROCEEDED ON THE BASIS THAT THE REOPENING OF THE AS SESSMENT WAS VALID, THIS DOES NOT SATISFY THE REQUIREMENT OF LAW THAT PRIOR TO THE REOPENING OF THE ASSESSMENT, THE AO HA S TO, APPLYING HIS MIND TO THE MATERIALS, CONCLUDE THAT H E HAS REASON TO BELIEVE THAT INCOME OF THE ASSESSEE HAS E SCAPED ASSESSMENT. UNLESS THAT BASIC JURISDICTIONAL REQUIR EMENT IS SATISFIED A POST MORTEM EXERCISE OF ANALYSING MATER IALS PRODUCED SUBSEQUENT TO THE REOPENING WILL NOT RESCU E AN INHERENTLY DEFECTIVE REOPENING ORDER FROM INVALIDIT Y . ITA NO. 1596/D EL/2014 17 14. IN THE CIRCUMSTANCES, THE CONCLUSION REACHED BY THE ITAT CANNOT BE SAID TO BE ERRONEOUS. NO SUBSTANTIAL QUESTION OF LAW ARISES. 15. THE APPEAL IS DISMISSED. (C) ITAT, E BENCH, NEW DELHI IN THE CASE OF ITO VS . M/S NC CABLES LTD. IN ITA NO. 4122/DEL/2009 (AY 2001-02 ) AND IN CROSS OBJECTION NO. 388/DEL/2009 IN THE MATTER OF M /S NC CABLES LTD. VS. ITO, VIDE ORDER DATED 22.10.2014, THE TRIBUNAL HAS HELD AS UNDER:- 10.2. THE MUMBAI E BENCH OF THE TRIBUNAL IN ITA 611/MUM/2004 AMARLAL BAJAJ (SUPRA) ORDER DT. 24.7.2 013 HAS CONSIDERED THE LEGAL POSITION AND HELD AS FOLLOWS. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CA REFULLY PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND ALS O THE MATERIAL EVIDENCES BROUGHT ON 8 RECORD FROM BOTH SI DES. WE HAVE ALSO THE BENEFIT OF PERUSING THE ORDER SHEET E NTRIES BY WHICH THE LD. CIT HAS GRANTED SANCTION. LET US FIRS T CONSIDER THE RELEVANT PART OF THE PROVISIONS OF SEC . 151 OF THE ACT. 151. (1) IN A CASE WHERE AN ASSESSMENT UNDER SUB-SE CTION (3) OF SECTION 143OR SECTION 147HAS BEEN MADE FOR T HE RELEVANT ASSESSMENT YEAR, NO NOTICE SHALL BE ISSUED UNDER ITA NO. 1596/D EL/2014 18 SECTION 148[BY AN ASSESSING OFFICER, WHO IS BELOW T HE RANK OF ASSISTANT COMMISSIONER [OR DEPUTY COMMISSIONER}, UNLESS THE [JOINT} COMMISSIONER IS SATISFIED ON THE REASONS RECORDED BY SUCH ASSESSING OFFICER THAT IT IS A FIT CASE FOR THE ISSUE OF SUCH NOTICE} : PROVIDED THAT, AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, NO SUCH NOTICE SHALL BE ISSUED UNLESS THE CHIEF COMMISSIONER OR COMMISSIONER IS SATISFIED, ON THE REASONS RECORDED BY THE ASSESSING OFFICER AFORESAID, THAT IT IS A FIT CASE FOR THE ISSUE OF S UCH NOTICE. (2) IN A CASE OTHER THAN A CASE FALLING UNDER SUB-SECTI ON (1), NO NOTICE SHALL BE ISSUED UNDER SECTION 148 BY AN ASSE SSING OFFICER, WHO IS BELOW THE RANK OF [JOINT} COMMISSIO NER, AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS THE [JOINT} COMMISSIONER IS SATISFIED, ON THE REASONS RECORDED BY SUCH ASSESSIN G OFFICER, THAT IT IS A FIT CASE FOR THE ISSUE OF SUC H NOTICE.} [EXPLANATION.-FOR THE REMOVAL OF DOUBTS, IT IS HERE BY DECLARED THAT THE JOINT COMMISSIONER, THE COMMISSIO NER OR THE CHIEF COMMISSIONER, AS THE CASE MAY BE, BEING S ATISFIED ON THE REASONS RECORDED BY THE ASSESSING OFFICER AB OUT ITA NO. 1596/D EL/2014 19 FITNESS OF A CASE FOR THE ISSUE OF NOTICE UNDER SEC TION 148,NEED NOT ISSUE SUCH NOTICE HIMSELF.} ' 6. A SIMPLE READING OF THE PROVISIONS OF SEC. 151(1 ) WITH THE PROVISO CLEARLY SHOW THAT NO SUCH NOTICE SHALL BE I SSUED UNLESS THE COMMISSIONER IS SATISFIED ON THE REASONS RECORDED BY THE AO THAT IT IS A FIT CASE FOR THE IS SUE OF NOTICE WHICH MEANS THAT THE SATISFACTION OF THE COMMISSION ER IS PARAMOUNT FOR WHICH THE LEAST THAT IS EXPECTED FROM THE COMMISSIONER IS APPLICATION OF MIND AND DUE DILIGEN CE BEFORE ACCORDING SANCTION TO THE REASONS RECORDED B Y THE AO. IN THE PRESENT CASE, THE ORDER SHEET WHICH IS P LACED ON RECORD SHOW THAT THE COMMISSIONER HAS SIMPLY AFFIXE D 'APPROVED' AT THE BOTTOM OF THE NOTE SHEET PREPARED BY THE ITO TECHNICAL. NOWHERE THE CIT HAS RECORDED HIS SATISFACTION. IN THE CASE BEFORE THE HON'BLE SUPREM E COURT (SUPRA) THAT ON AO'S REPORT THE COMMISSIONER AGAINS T THE QUESTION 'WHETHER THE COMMISSIONER IS SATISFIED TH AT IT IS A FIT CASE FOR THE ISSUE OF NOTICE UNDER SECTION 148 MERELY NOTED YES AND AFFIXED HIS SIGNATURE THERE UNDER . ON THESE FACTS, THE HON'BIE SUPREME COURT OBSERVED THA T THE IMPORTANT SAFEGUARDS PROVIDED IN SECTIONS 147 AND 1 51 WERE LIGHTLY TREATED BY THE OFFICER AND THE COMMISS IONER. THE HON'BLE SUPREME COURT FURTHER OBSERVED THAT THE ITO ITA NO. 1596/D EL/2014 20 COULD NOT HAVE HAD REASON TO BELIEVE THAT INCOME HA D ESCAPED ASSESSMENT BY REASONS OF THE APPELLANT-FIRM 'S FAILURE TO DISCLOSE MATERIAL FACTS AND IF THE 9 COM MISSIONER HAD READ THE REPORT CAREFULLY HE COULD NOT HAVE COM E TO THE CONCLUSION THAT THIS WAS A FIT CASE FOR ISSUING A N OTICE UNDER SECTION 148. THE NOTICE ISSUED UNDER SECTION 148 WA S THEREFORE, INVALID. IT WOULD BE PERTINENT HERE TO N OTE THE REASONS RECORDED BY THE AO. 'INTIMATION HAS BEEN RE CEIVED FROM DCIT-24(2), MUMBAI VIDE HIS LETTERS DT. 22ND FEBRUARY, 2002 THAT ONE SHRI NITIN 1. RUGMANI ASSES SED IN HIS CHARGE HAD ARRANGED HAWALA ENTRIES IN ARRANGING LOANS, EXPENSES, GIFTS. DURING THE YEAR SHRI AMAR G . BAJAJ, PROP. OF MOHAN BROTHERS, 712, LINKING ROAD, KHAR (W ), MUMBAI-52 WAS THE BENEFICIARY OF SUCH LOANS, EXPENS ES AND GIFTS. THE MODUS-OPERANDI WAS TO COLLECT CASH FROM THE PARTIES TO WHOM LOANS WERE GIVEN AND CASH WAS DEPOS ITED INTO ACCOUNT OF SHRI NITIN 1. RUGANI AND CHEQUES WE RE ISSUED TO THE BENEFICIARY OF THE LOAN TRANSACTION. IN ORDER TO ENSURE THAT THE MONEY REACHED BY CHEQUES TO THE BEN EFICIARY SHRI NITIN 1. RUGANI KEPT BLANK CHEQUES OF THE THIR D PARTIES. THE ASSESSEE SHRI AMAR G. BAJAJ HAD TAKEN BENEFIT O F SUCH ENTRIES OF LOANS, COMMISSION AD BILL DISCOUNTING OF RS. 8,00,000/-, 11,21,243/- AND 9,64,739/- RESPECTIVELY . THE ITA NO. 1596/D EL/2014 21 ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE 1. T. A CT ON 31 ST MARCH, 1998 BY DCIT-SPL. RG. 40, MUMBAI. IT IS SE EN FROM RECORDS THAT THE AFORESAID POINTS HAVE NOT BEE N VERIFIED IN THE ASSESSMENT. I HAVE THEREFORE REASON TO BELIEVE THAT BY REASON OF THE FAILURE ON THE PART O F THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS NECESSARY FOR HIS ASSESSMENT, INCOME HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF PROVISO TO SEC. 14 7 AND EXPLANATION 2 (C)(I) OF THE INCOME-TAX ACT, 1961.' 7. IN THE LIGHT OF THE ABOVE MENTIONED REASONS, IN OUR CONSIDERATE VIEW, SECTION 147 AND 148 ARE CHARTER T O THE REVENUE TO REOPEN EARLIER ASSESSMENTS AND ARE, THER EFORE PROTECTED BY SAFEGUARDS AGAINST UNNECESSARY HARASSM ENT OF THE ASSESSEE. THEY ARE SWORD FOR THE REVENUE AND SH IELD FOR THE ASSESSEE. SECTION 151 GUARDS THAT THE SWORD OF SEC. 147 MAY NOT BE USED UNLESS A SUPERIOR OFFICER IS SATISF IED THAT THE AO HAS GOOD AND ADEQUATE REASONS TO INVOKE THE PROVISIONS OF SEC. 147. THE SUPERIOR AUTHORITY HAS TO EXAMINE THE REASONS, MATERIAL OR GROUNDS AND TO JUD GE WHETHER THEY ARE SUFFICIENT AND ADEQUATE TO THE FOR MATION OF THE NECESSARY BELIEF ON THE PART OF THE ASSESSING O FFICER. IF, AFTER APPLYING HIS MIND AND ALSO RECORDING HIS REAS ONS, HOWSOEVER BRIEFLY, THE COMMISSIONER IS OF THE OPINI ON THAT ITA NO. 1596/D EL/2014 22 THE AO'S BELIEF IS WELL REASONED AND BONAFIDE, HE I S TO ACCORD HIS SANCTION TO THE ISSUE OF NOTICE U/S. 148 OF THE ACT. IN THE INSTANT CASE, WE FIND FROM THE PERUSAL OF TH E ORDER SHEET WHICH IS ON RECORD, THE COMMISSIONER HAS SIMP LY PUT 'APPROVED' AND SIGNED THE REPORT THEREBY GIVING SAN CTION TO THE AO. NOWHERE THE COMMISSIONER HAS RECORDED A SATISFACTION NOTE NOT EVEN IN BRIEF. THEREFORE, IT CANNOT BE SAID THAT THE COMMISSIONER HAS ACCORDED SANCTION AF TER APPLYING HIS MIND AND AFTER RECORDING HIS SATISFACT ION. 8. HON'BLE DELHI HIGH COURT IN THE CASE OF' UNITED ELECTRICAL CO. PVT. LTD. VS CIT 257 HAS HELD THAT ' THE PROVISO TO SUB-SECTION (1) OF SECTION 151OF THE 10 ACT PROVIDES THAT AFTER THE EXPIRY OF FOUR YEARS FROM T HE END OF THE RELEVANT ASSESSMENT YEAR, NOTICE UNDER SECTION 148 SHALL NOT BE ISSUED UNLESS THE CHIEF COMMISSIONER OR THE COMMISSIONER, AS THE CASE MAY BE, IS SATISFIED, ON THE REASONS RECORDED BY THE ASSESSING OFFICER CONCERNED , THAT IT IS A FIT CASE FOR THE ISSUE OF SUCH NOTICE. THESE A RE SOME IN- BUILTS SAFEGUARDS TO PREVENT ARBITRARY EXERCISE OF POWER BY AN ASSESSING OFFICER TO FIDDLE WITH THE COMPLETED ASSESSMENT'. THE HON'BLE HIGH COURT FURTHER OBSERVE D THAT 'WHAT DISTURBS US MORE IS THAT EVEN THE ADDITIONAL COMMISSIONER HAS ACCORDED HIS APPROVAL FOR ACTION U NDER ITA NO. 1596/D EL/2014 23 SECTION 147 MECHANICALLY. WE FEEL THAT IF THE ADDIT IONAL COMMISSIONER HAD CARED TO GO THROUGH THE STATEMENT OF THE SAID PARTIES, PERHAPS HE WOULD NOT HAVE GRANTED HIS APPROVAL, WHICH WAS MANDATORY IN TERMS OF THE PROVI SO TO SUB-SECTION (1) OF SECTION 151 OF THE ACT AS THE AC TION UNDER SECTION 147 WAS BEING INITIATED AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THE P OWER VESTED IN THE COMMISSIONER TO GRANT OR NOT TO GRANT APPROVAL IS COUPLED WITH A DUTY. THE COMMISSIONER I S REQUIRED TO APPLY HIS MIND TO THE PROPOSAL PUT UP T O HIM FOR APPROVAL IN THE LIGHT OF THE MATERIAL RELIED UPON B Y THE ASSESSING OFFICER. THE SAID POWER CANNOT BE EXERCIS ED CASUALLY AND IN A ROUTINE MANNER. WE ARE CONSTRAINE D TO OBSERVE THAT IN THE PRESENT CASE THERE HAS BEEN NO APPLICATION OF MIND BY THE ADDITIONAL COMMISSIONER BEFORE GRANTING THE APPROVAL'. 9. THE OBSERVATIONS OF THE HON'BLE HIGH COURT ARE V ERY MUCH RELEVANT IN THE INSTANT CASE AS IN THE PRESENT CASE ALSO THE COMMISSIONER HAS SIMPLY MENTIONED 'APPROVED' TO THE REPORT SUBMITTED BY THE CONCERNED AO. IN THE LIGHT OF THE RATIOS/OBSERVATIONS OF THE HON'BLE HIGH COURT MENTI ONED HEREINABOVE, WE HAVE NO HESITATION TO HOLD THAT THE REOPENING PROCEEDINGS VISA-VIS PROVISIONS OF SEC. 1 51 ARE ITA NO. 1596/D EL/2014 24 BAD IN LAW AND THE ASSESSMENT HAS TO BE DECLARED AS VOID AB INITIO. GROUND NO. 1 OF ASSESSEE'S APPEAL IS ALLOWE D. 10. AS WE HAVE HELD THAT THE REASSESSMENT IS BAD IN LAW, WE DO NOT FIND IT NECESSARY TO DECIDE OTHER ISSUES WHI CH ARE ON MERITS OF THE CASE. 10.3 NO CONTRARY JUDGMENT OR ORDER IS BROUGHT TO O UR NOTICE. THIS BEING A CO-ORDINATE BENCH ORDER, WE ARE REQUIR ED TO FOLLOW THE SAME. 10.4 THE DECISION CITED BY THE LD. DR DOES NOT PERT AIN TO THE ISSUE OF CONTRAVENTION OF PROVISIONS OF S. 151 OF T HE ACT. THESE JUDGMENTS ARE ON OTHER ASPECTS RELATING TO REOPENIN G. THUS RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINA TE BENCH IN THE MATTER, WE HOLD THAT THE REOPENING IS BAD IN LAW FO R THE REASON THAT THE LD. CIT(A), DELHI HAS NOT RECORDED HIS SATISFAC TION AS CONTEMPLATED U/S. 151 OF THE ACT. 9. IN VIEW OF ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE ABOVE ISSUE IS EXACTLY THE SIMILAR AND IDENTICAL TO THE ISSUE INV OLVED IN THE PRESENT APPEAL AND IS SQUARELY COVERED BY THE AFORESAID DECISIONS OF T HE HONBLE HIGH COURT OF DELHI & ITAT, DELHI. HENCE, RESPECTFULLY FOLLOWING THE ABOVE PRECEDENTS, WE DECIDE THE LEGAL ISSUE IN DISPUTE IN FAVOR OF THE A SSESSEE AND AGAINST THE REVENUE AND QUASH THE ORDERS OF THE AUTHORITIES BELOW. ITA NO. 1596/D EL/2014 25 10. SINCE WE HAVE QUASHED THE ORDERS OF THE AUTHOR ITIES BELOW ON THE LEGAL ISSUE ITSELF, HENCE, THE OTHER ISSUES RAISED BY TH E ASSESSEE HAVE BECOME ACADEMIC IN NATURE, THEREFORE, ARE NOT ADJUDICATED UPON. 11. IN THE RESULT, THE ASSESSEES APPEAL STANDS A LLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 12-04-2016. SD/- SD/- (PRASHANT MAHARISHI) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 12-04-2016 SR BHATANGAR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.