DHARMENDER KUMAR, NEW DELHI V. ITO, WARD- 65(5), NEW DELHI

ITA 2728/DEL/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6926 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 19-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: EKTA VISHNOI
• Assessee Lawyers: SUMIT GOE L
• Keywords: Reopening of assessment; Bogus purchase; Gift; Tangible material; Difference of opinion; Accommodation entries; Change of opinion; Reassessment proceedings
• Section: 143(3); 142(1); 143(2); 69A; 64; 147; 148; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHE :SMC : NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 2728/DEL/2018 ASSESSMENT YEAR : 2008-09 DHARMENDER KUMAR C/O RAJ KUMAR & ASSOCIATES,. L-7A(LGF), SOUTH EXTENSION PART-II, NEW DELHI (PAN: ASGPK3927N) VS. ITO, WARD 65(5), NEW DELHI (APPELLANT) ( RESPONDENT) ASSESSEE BY : SH. RAJ KUMAR, CA & SH. SUMIT GOEL, CA DEPARTMENT BY : MS. EKTA VISHNOI, SR. DR. ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER PASSED BY THE LD. CIT(A)-21, NEW DELHI ON 28.03.2018 IN R ELATION TO THE ASSESSMENT YEAR 2008-09 ON THE FOLLOWING GROUNDS:- 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE INITIATION OF PROCEEDINGS U/S. 147/148 IS WITHOUT JURI SDICTION, MECHANICAL, WITHOUT APPLICATION OF MIND, ILLEGAL AND U N- SUSTAINABLE IN LAW AS WELL AS ON MERITS. 2 2. THAT IN THE ABSENCE OF APPROVAL U/S. 151 AS PER LAW AND ALSO, SINCE, WITHOUT APPLICATION OF MIND AND MECHANICAL, THE W HOLE PROCEEDINGS ARE ILLEGAL, WITHOUT JURISDICTION AND UN- SUSTAINABLE. 3. THAT UNDER THE FACTS AND CIRCUMSTANCES, THE ADDITION OF RS. 13,26,000/- U/S. 69A AS ALLEGED UNEXPLAINED CASH DEOSIT IN SAVINGS BANK ACCOUNT IS UNWARRANTED, UNJUSTIFIED AND UNSUSTAINABLE IN LAW AS WELL AS ON MERITS. 2. THE FACTS IN BRIEF ARE THAT AIR INFORMATION WAS RECE IVED ABOUT THE ASSESSEE THAT HE HAS DEPOSITED A CASH AMOUNTING TO RS. 13,2 6,000/- DURING THE FY 2007-08 IN HIS SAVINGS ACCOUNT. THE ASSESSEE DID NO T FILE HIS RETURN OF INCOME. VERIFICATION LETTERS DATED 26.2.2015 AND 12.3.2015 WERE SENT TO THE ASESSEE BUT THE ASSESSEE DID NOT SUBMIT ANY REPLY. ALSO THE ASSESSEEHAS NOT FILED HIS INCOME TAX RETURN FOR THE RELEVA NT ASSESSMENT YEAR. SUBSEQUENTLY, AFTER RECORDING THE REASONS UNDER SECTION 147 OF THE INCOME TAX ACT, 1961 (IN SHORT ACT) DUE APPROVAL OF T HE ADDL. CIT, RANGE- 65, NEW DELHI WAS OBTAINED. THE NOTICE U/S. 148 OF T HE ACT DATED 30.3.2015 AND SUBSEQUENT NOTICES U/S. 142(1) OF THE ACT WERE SERVE D UPON THE ASSESSEE. IN RESPONSE TO THE NOTICES THE ASSESSEE HIMSELF ATTE NDED THE ASSESSMENT PROCEEDINGS TIME TO TIME AS PER ORDER SHEET ENT RIES. DURING THE COURSE OF PROCEEDINGS IT WAS FOUND THAT THE ASSESSEE HAS BEEN AN EMPLOYEE OF DELHI POLICE DURING THE FY 2007-08 AND HAS BEEN DR AWING THE SALARY 3 THEREFROM. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED HIS RETURN OF INCOME IN RESPONSE TO NOTICE U/S. 148 OF THE ACT ON 19 .2.2016 DECLARING HIS TOTAL TAXABLE INCOME OF RS. 1,01,510/-. THE NOTICE U/S. 143(2) OF THE ACT DATED 19.2.2016 AND NOTICE U/S. 142(1) OF THE ACT WERE SERVED UPON THE ASSESSEE. DURING THE ASSESSMENT PROCEEDINGS, IT WAS FOUND TH AT THE ASSESSEE HAS DEPOSITED A CASH OF RS,. 13,26,000/- IN HIS SAVIN G BANK ACCOUNT. THE ASSESSEE WAS ENQUIRED ABOUT THE SOURCE OF THESE CASH DEPOSITS AND THE ASSESSEE FILED HIS SUBMISSIONS IN THIS REGARD. THE ASSESSEE THROUGH HIS SUBMISSION DATED 28.10.2015 CLAIMED THAT HIS FATHER HAS GOT THE MONEY FROM THE LAND ACQUISITION COLLECTOR, KANJHAWALA, NEW D ELHI. THE MONEY WAS DEPOSITED IN THE JOINT ACCOUNT OF THE ASSESSEE AND HIS FATH ER. THE ASSESEE SUBMITTED THE COPY OF CHEQUE OF RS. 38,36,480/- DATED 2 4.4.2004 ISSUED BY THE LAND ACQUISITION COLLECTOR, KANJHAWALA, DELHI AND CLAIMED THAT THE CASH DEPOSITED IN HIS ACCOUNT WAS DEPOSITED OUT OF WITHDRAWAL S FROM HIS JOINT ACCOUNT. THE ASSESEE ALSO SUBMITTED THE COPY OF BANK PASS B OOK OF THE JOINT ACCOUNT CONTAINING ENTRIES UPTO 07.11.2005. THE SUBMISSI ON OF THE ASSESSEE WERE EXAMINED BY THE AO. THEREAFTER, THE ASSESSEE WAS A SKED TO FURNISH THE STATEMENT OF JOINT ACCOUNT FOR THE FY 2007-08 TO PROVE HIS CLAIM THAT CASH DEPOSITED IN HIS SAVINGS ACCOUNT WAS WITHDRAWN FROM T HIS JOINT ACCOUNT. AFTER PERUSING THE SAME, THE AO OBSERVED THAT THERE IS NO CASH WITHDRAWAL FROM THIS ACCOUNT. THE ASSESSEE IN HIS SUBMIS SIONS DATED 28.12.2015 CLAIMED THAT HE WAS GIFTED VARIOUS AMOUNTS OF MONEY AT VARIOUS 4 TIMES DURING THE RELEVANT F.Y. BY HIS MOTHER IN LAWS AND HIS COUSIN. THE ASSESSEE ALSO CLAIMED THE HE GOT INTEREST FREE LOANS FROM F RIENDS DURING THE FY AND HAS ALSO ARRANGED SOME MONEY FROM THE SALE OF GO LD JEWELLERY BY HIS FAMILY MEMBERS. THE ASSESSEE FILED THE CONFIRMATION ON PLAIN PAPER FROM THE CONCERNS PERSONS AND FURNISHED THE BANK STATEMENT OF H IS MOTHER IN LAW AND COUSIN. ASSESSEE FURNISHED THE RAW SLIPS FROM BHAGWAT I JEWELLERS, KHARKHODA, SONIPAT ISSUED IN NAME OF DIFFERENT FAMILY MEMBERS OF THE FAMILY OF THE ASSESSEE. BUT ON ASKING, HE COULD NOT FURNISH THE ORIGINAL BILLS FOR THE JEWELLERY. THEREFORE, THE AO HAS HELD THAT ASSESSEE COU LD NOT EXPLAIN THE ENTIRE AMOUNT OF CASH DEPOSITS OF RS. 13,26,000/- AND HE NCE, ADDED THE SAME TO THE INCOME OF THE ASSESSEE AND ASSESSED THE INCOME OF THE ASSESSEE AT RS.14,27,510/- U/S. 143(3) OF THE ACT VIDE ORD ER DATED 23.03.2016. AGAINST THE ASSESSMENT ORDER DATED 23.03.20 16, ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGN ED ORDER DATED 28.03.2019 HAS DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIE VED WITH THE APPELLATE ORDER, ASSESSEE IS IN APPEAL BEFORE THE TRIBUN AL. 3. LD. COUNSEL FOR THE ASSESSEE ONLY ARGUED THE GROUND N O. 2 WHICH IS LEGAL IN NATURE AND HAS FILED THE PAPER BOOK CONTAIN ING PAGES 1 TO 41 IN WHICH HE HAS ATTACHED THE COPY OF AIR INFORMATION; COPY OF REASONS RECORDED; COPY OF APPROVAL PERFORMA U/S. 151; LETTER D ATED 26.2.2015 ISUED BY AO; LETTER DATED 12.3.2015 ISSUED BY AO; CASH FLOW ST ATEMENT; CONFIRMATION FROM RAMA DEVI; BANK STATEMENT OF RAM D EVI; COPY OF PAN 5 CARD OF RAMA DEVI; CONFIRMATION FROM SHYAM SUNDER; BA NK STATEMENT OF SHYAM SUNDER; COPY OF PAN CARD OF SHYAM SUNDER; CONFI RMATION FROM VIRENDER KUMAR; CONFIRMATION FROM ESHWAR DUTT; CONFIR MATION FROM DAYANAND SHARMA; JEWELLERY SALE BILL TO ASSESSEE; JEWEL LERY SALE BILL TO ROHTASH (2 IN NOS); JEWELLERY SALE BILL TO KUMUD; S UB. TO CIT DATED 18.8.17; RR DATED 27.10.17; SUB. TO CIT(A) DATED 7. 12.17 (REJOINDER TO RR) AND SUB. TO CIT(A) DATED 15.2.2018 AND ESPECIALL Y THE PAGE NO. 2-3 OF THE PAPER BOOK WHICH IS A COPY OF PERFORMA FOR RECORDIN G THE REASONS FOR INITIATING PROCEEDINGS U/S. 148 AND FOR OBTAINING APP ROVAL OF ADDL. CIT, RANGE-65, NEW DELHI IN WHICH ADDL. CIT, RANGE-65, NEW DELHI HAS GRANTED THE APPROVAL IN A MECHANICAL MANNER, FOR ISSUI NG OF NOTICE U/S. 148 OF THE INCOME TAX ACT, 1961, HENCE, HE STATED THAT THE APPROVAL FOR ISSUE OF NOTICE US. 148 OF THE ACT IS NOT WITHIN THE MEANING OF SECTION 151 OF THE I.T. ACT, 1961 AND THEREFORE, THE REASSESSMENT NEEDS TO BE Q UASHED. IN VIEW OF ABOVE, HE REQUESTED TO QUASH THE REASSESSMENT. TO SUPPOR T HIS CONTENTION, LD. COUNSEL OF THE ASSESSEE HAS RELIED UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF UNITED ELECTRICAL COMPAN Y (P) LTD. VS. CIT & ORS. 258 ITR 317 (DEL.) AND THE JUDGMENT OF THE HONB LE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. S. GOYANKA LIME & CHEMICA L LTD. (2015) 64 TAXMANN.COM 313 (SC) BY WHICH THE GROUND NO. 2 RAI SED BY THE ASSESSEE IN THE PRESENT APPEAL IS SQUARELY COVERED. 6 4. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND STATED THAT THE REASONS RECORDED AND SATISFACTION/APP ROVAL ACCORDED IS WITHIN THE MEANING OF SECTION 151 OF THE ACT AND NEED NOT TO BE QUASHED. SHE STATED THAT APART FROM RELYING ON THE DECISION OF THE LD. CIT(A), THE FOLLOWING CASE LAWS MAY KINDLY BE CONSIDERED WITH REGA RD TO REOPENING OF CASES U/S 147 OF I.T. ACT : 1. YOGENDRA KUMAR GUPTA VS ITO (51 TAXMANN.COM 383 ) (SC)/F20141 227 TAXMAN 374 (SC) (COPY ENCLOSED) WHE RE HONBLE SUPREME COURT HELD THAT WHERE SUBSEQUENT TO COMPLETION OF ORIGINAL ASSESSMENT, ASSESSING OFFICE R, ON BASIS OF SEARCH CARRIED OUT IN CASE OF ANOTHER PERSON, CAME TO KNOW THAT LOAN TRANSACTIONS OF ASSESSEE WITH A FINANCE COMPAN Y WERE BOGUS AS SAID COMPANY WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES, IT BEING A FRESH INFORMATION , HE WAS JUSTIFIED IN INITIATING REASSESSMENT PROCEEDING IN CASE OF ASSESSEE. 2. RAYMOND WOOLLEN MILLS LTD. V. ITO AND OTHERS [2 36 ITR 341 (COPY ENCLOSED) WHERE HONBLE SUPREME COURT HELD THAT IN DETERMINING WHETHER COMMENCEMENT OF REASSESSMENT PROCEEDINGS WAS VALID IT HAS ONLY TO BE SEEN WHETHE R THERE WAS PRIMA FACIE SOME MATERIAL ON THE BASIS OF WHICH THE DEPARTMENT COULD REOPEN THE CASE. THE SUFFICIENCY OR CORRECTNE SS OF THE MATERIAL IS NOT A THING TO BE CONSIDERED AT THIS ST AGE. 3. YUVRAJ V. UNION OF INDIA BOMBAY HIGH COURT [2009 1 315 ITR 84 (BOMBAY)/R20091 225 CTR 283 (BOMBAY) POINTS NOT DECIDED WHILE PASSING ASSESSMENT ORDER UNDER SECTIO N 143(3) NOT A CASE OF CHANGE OF OPINION. ASSESSMENT REOPENE D VALIDLY. 4. ACIT VS RAJESH JHAVERI STOCK BROKERS (P.) LTD ( 2007) 161 TAXMAN 316 (SC)/R20071 291 ITR 500 (SC)/[2007] 210 CTR 30 (SC) SO LONG AS THE CONDITIONS OF SECTION 147 ARE FULFIL LED, THE ASSESSING OFFICER IS FREE TO INITIATE PROCEEDINGS U NDER SECTION 147 AND FAILURE TO TAKE STEPS UNDER SECTION 143(3) WILL NOT 7 RENDER THE ASSESSING OFFICER POWERLESS TO INITIATE REASSESSMENT PROCEEDINGS, EVEN WHEN INTIMATION UNDER SECTION 143 (1) HAS BEEN ISSUED ADANI EXPORTS V. DCIT[1999] 240 ITR 224 (GUJ) DISTINGUISHED. 5. DEVI ELECTRONICS PVT LTD VS ITO BOMBAY HIGH COUR T 2017- TIQL-92-HC-MUM- II THE LIKELIHOOD OF A DIFFERENT VIEW WHEN MATERIALS E XIST OF FORMING A REASONABLE BELIEF OF ESCAPED INCOME, WILL NOT DEBAR THE AO FROM EXERCISING HIS JURISDICTION TO ASSESS T HE ASSESSEE ON REOPENING NOTICE. 6. PRANAWA LEAFIN (P.) LTD. VS DCIT BOMBAY HIGH COU RT T20131 33 TAXMANN.COM 454 (BOMBAY)/R20131 215 TAXMA N 109 (BOMBAY)(MAG.) WHERE THERE WAS FAILURE ON PART OF ASSESSEE TO MAKE TRUE AND COMPLETE DISCLOSURE IN RESPECT OF SHARE TRANSAC TIONS ENTERED INTO BY IT, IN VIEW OF PROVISO TO SECTION 1 47, ASSESSING OFFICER WAS JUSTIFIED IN INITIATING REASS ESSMENT PROCEEDINGS EVEN AFTER EXPIRY OF FOUR YEARS FROM EN D OF RELEVANT ASSESSMENT YEAR. 7. ACORUS UNITECH WIRELESS (P.) LTD. VS ACIT DELHI HIGH COURT T20141 43 TAXMANN.COM 62 (DELHI)/R20141 223 T AXMAN 181 (DELHI)(MAG)/R20141 362 ITR 417 (DELHI) IN TERMS OF SECTION 148, LAW ONLY REQUIRES THAT INFORMATION OR MATERIAL ON WHICH ASSESSING OFFICER RECORDS HIS OR HER SATISFACTION HAS TO BE COMMUNICATED TO ASSESSEE, WITHOUT MANDATING DISCLOSURE OF ANY SPECIFIC DOCUMENT. 8. PCIT, VS PARAMOUNT COMMUNICATION (P.) LTD. DELH I HIGH COURT [20171 79 TAXMANN.COM 409 (DELHI)/R20171 392 ITR 444 (DELHI) INFORMATION REGARDING BOGUS PURCHASE BY ASSESSEE RECEIVED BY DRI FROM CCE WHICH WAS PASSED ON TO REVENUE AUTHORITIES WAS 'TANGIBLE MATERIAL OUTSIDE RECORD TO INITIATE VALID REASSESSMENT PROCEEDINGS. 9. PARAMOUNT COMMUNICATION (P.) LTD. VS PCIT SUPREME COURT 2017-TIQL-253- SC-IT 8 SLP OF ASSESSEE DISMISSED. INFORMATION REGARDING BO GUS PURCHASE BY ASSESSEE RECEIVED BY DRI FROM CCE WHICH WAS PASSED ON TO REVENUE AUTHORITIES WAS TANGIBLE MATERIAL OUTSIDE RECORD TO INITIATE VALID REASSESS MENT PROCEEDINGS. 10. AMIT POLYPRINTS (P.) LTD. VS PCIT GUJARAT HIGH COURT T2018L 94 TAXMANN.COM 393 (GUJARAT) WHERE REASSESSMENT PROCEEDINGS WERE INITIATED ON BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WI NG THAT ASSESSEE HAD RECEIVED CERTAIN AMOUNT FROM SHELL COMPANIES WORKING AS AN ACCOMMODATION ENTRY PROVIDE R, REASSESSMENT COULD NOT BE HELD UNJUSTIFIED. 11. AASPAS MULTIMEDIA LTD. VS PCIT GUJARAT HIGH COU RT T20171 83 TAXMANN.COM 82 (GUJARAT) WHERE REASSESSMENT WAS MADE ON BASIS OF INFORMATION RECEIVED FROM PRINCIPAL DIT (INVESTIGAT ION) THAT ASSESSEE WAS BENEFICIARY OF ACCOMMODATION ENTR IES BY WAY OF SHARE APPLICATION PROVIDED BY A THIRD PAR TY, SAME WAS JUSTIFIED. 12. MURLIBHAI FATANDAS SAWLANI VS ITO GUJARAT HIGH COURT 2016-TIQL-370-HC- AHM-IT IT IS NOT OPEN TO THE ASSESSEE TO OBJECT TO THE REOPENING BY ASKING THE AO TO PRODUCE THE SOURCE FR OM WHERE THE AO HAS GATHERED THE INFORMATION FOR FORMI NG A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. 13. ANKIT AQROCHEM (P.) LTD. VS JCIT RAJASTHAN HIGH COURT T20181 89 TAXMANN.COM 45 (RAJASTHAN) WHERE DIT INFORMED THAT ASSESSEE-COMPANY HAD RECEIVED SHARE APPLICATION MONEY FROM SEVERAL ENTIT IES WHICH WERE ONLY ENGAGED IN BUSINESS OF PROVIDING BO GUS ACCOMMODATION ENTRIES TO BENEFICIARY CONCERNS, REASSESSMENT ON BASIS OF SAID INFORMATION WAS JUSTI FIED. 14. RAKESH GUPTA VS CIT P&H HIGH COURT F20181 93 TAXMANN.COM 271 (PUNJAB & HARYANA) 9 WHERE ASSESSING OFFICER RECEIVED INFORMATION FROM PRINCIPLE DIRECTOR OF INCOME TAX (INVESTIGATION) TH AT ASSESSEE HAD RECEIVED BOGUS LOSS FROM HIS BROKER BY CLIENT CODE MODIFICATION, REASSESSMENT ON BASIS OF SAID INFORMATION WAS JUSTIFIED. 15. ABHISHEK JAIN VS ITO DELHI HIGH COURT (2018) 94 TAXMANN.COM 355 (DELHI), 2018-TIQL-1059-HC-DEL-IT DATE OF ORDER 01.06.20181 IN TERMS OF SECTION 124(3)(B) JURISDICTION OF AN ASSESSING OFFICER CANNOT BE CALLED IN QUESTION BY A N ASSESSEE AFTER EXPIRY OF ONE MONTH FROM DATE ON WHI CH HE WAS SERVED WITH A NOTICE FOR REOPENING ASSESSMENT U NDER SECTION 148. 16. HOME FINDERS HOUSING LTD. VS. ITO (2018) 94 TAXMANN.COM 84 (SC) SLP DISMISSED AGAINST HIGH COURTS ORDER THAT NON- COMPLIANCE OF DIRECTION OF SUPREME COURT IN GKN DRIVESHAFTS (INDIA) LTD. VS. ITO (2002) 125 TAXMAN 963 THAT ON RECEIPT OF OBJECTION GIVEN BY ASSESSEE TO N OTICE UNDER SECTION 148, ASSESSING OFFICER IS BOUND TO DI SPOSE OBJECTIONS BY PASSING A SPEAKING ORDER, WOULD NOT M AKE REASSESSMENT ORDER VOID AB INITIO. 17. BALDEVBAHI BHIKHABHAI PATEL VS. DCIT (GUJARAT HI GH COURT) (2018) 94 TAXMANN.CO, 428(GUJARAT) WHERE REVENUE PRODUCED BUNCH OF DOCUMENTS TO SUGGES T THAT ENTIRE PROPOSAL OF REOPENING OF ASSESSMENT ALO NGWITH REASONS RECORDED BY THE ASSESSING OFFICER FOR SAME WERE PLACED BEFORE ADDITIONAL COMMISSIONER WHO, UPON PERUSAL OF SAME, RECORDED HIS SATISFACTION THAT IT WAS A FIT CASE FO R ISSUANCE OF NOTICE FOR REOPENING ASSESSMENT, REASSESSMENT NOTI CE ISSUED AGAINST ASSESSEE WAS JUSTIFIED. 5. I HAVE HEARD BOTH THE PARTIES AND CAREFULLY CON SIDERED THE CASE LAWS AND THE RELEVANT DOCUMENTS AVAILABLE ON RECORD ESPECIALL Y THE ASSESSMENT ORDER, IMPUGNED ORDER, REASONS/SATISFACTION/APPROVAL R ECORDED FOR ISSUE OF 10 NOTICE U/S. 148 OF THE ACT AS WELL AS THE PAPER BOOK F ILED BY THE ASSESSEE CONTAINING PAGES 1-41 OF THE PAPER BOOK IN WHICH HE H AS ATTACHED THE COPY OF AIR INFORMATION; COPY OF REASONS RECORDED; COPY OF APPROVAL PERFORMA U/S. 151; LETTER DATED 26.2.2015 ISUED BY AO; LETTER DATED 12.3.2015 ISSUED BY AO; CASH FLOW STATEMENT; CONFIRMATION FROM RAMA DEVI ; BANK STATEMENT OF RAM DEVI; COPY OF PAN CARD OF RAMA DEVI; CONFIRMATI ON FROM SHYAM SUNDER; BANK STATEMENT OF SHYAM SUNDER; COPY OF PAN CA RD OF SHYAM SUNDER; CONFIRMATION FROM VIRENDER KUMAR; CONFIRMATI ON FROM ESHWAR DUTT; CONFIRMATION FROM DAYANAND SHARMA; JEWELLERY SALE B ILL TO ASSESSEE; JEWELLERY SALE BILL TO ROHTASH (2 IN NOS); JEWELLERY SALE BILL TO KUMUD; SUB. TO CIT DATED 18.8.17; RR DATED 27.10.17; SUB. TO CI T(A) DATED 7.12.17 (REJOINDER TO RR) AND SUB. TO CIT(A) DATED 15.2.201 8 AND ESPECIALLY THE PAGE NO. 2-3 OF THE PAPER BOOK WHICH IS A COPY OF PERF ORMA FOR RECORDING THE REASONS FOR INITIATING PROCEEDINGS U/S. 148 AND FOR OBT AINING APPROVAL OF ADDL. CIT, RANGE-65, NEW DELHI IN WHICH ADDL. CIT, RANGE-65, NEW DELHI HAS GRANTED THE APPROVAL IN A MECHANICAL MANNER FOR ISSUING NOTICE U/S. 148 OF THE INCOME TAX ACT, 1961. IT IS NOTED THAT AP PROVAL U/S. 151 OF THE ACT WAS GRANTED BY THE ADDL. CIT, RANGE-65, NEW DELH I VIDE COLUMN NO. 11 BY MENTIONING AS UNDER:- YES, I AM SATISFIED ON THE REASONS RECORDED BY AO THAT IT IS A FIT CASE FOR ISSUE OF NOTICE U/S. 148 OF THE I.T. ACT, 1961. 11 5.1 AFTER PERUSING THE AFORESAID REMARKS OF THE ADDL. CIT, RANGE-65, NEW DELHI, I FIND THAT THE APPROVAL GRANTED BY THE ADDL. CIT, RANGE-65, NE W DELHI IS A MECHANICAL AND WITHOUT APPLICATION OF MIND, WHICH IS NOT VALID FOR INITIATING THE REASSESSMENT PROCEEDINGS, BECAUSE FROM THE AFORESAID REMARKS, IT IS NOT COMING OUT AS TO WHICH MATERIAL; INF ORMATION; DOCUMENTS AND WHICH OTHER ASPECTS HAVE BEEN GONE THROUGH AND EXA MINED BY THE ADDL. CIT, RANGE-65, NEW DELHI FOR REACHING TO THE SATISFAC TION FOR GRANTING APPROVAL. THEREAFTER, THE AO HAS MECHANICALLY ISSUED NO TICE U/S. 148 OF THE ACT. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE CASE LAWS APPLICABLE IN THE CASE OF THE ASSESSEE, I AM OF THE CONSIDERED VIEW THAT THE REOPENING IN THE CASE OF THE A SSESSEE FOR THE ASSTT. YEAR IN DISPUTE IS BAD IN LAW AND DESERVES TO BE QUASHED . MY AFORESAID VIEW IS FORTIFIED BY THE FOLLOWING DECISIONS:- A) UNITED ELECTRICAL COMPANY (P) LTD. VS. CIT & OR S. 258 ITR 317 (DEL.) IN THIS CASE, APPROVAL BY THE ADDL. CIT U/S. 151 WAS GIVEN IN THE FOLLOWING TERMS:- YES, I AM SATISFIED THAT IT IS A FIT CASE FOR ISSUE OF NOTICE U/S. 148 OF THE INCOME TAX ACT. ANALYZING, THE ABOVE SATISFACTION/APPROVAL, IT HAS BEEN HELD THAT THE CIT IS REQUIRED TO APPLY HIS MIND 12 TO THE PROPOSAL PUT UP TO HIM FOR APPROVAL IN THE LIGHT TO EH MATERIAL RELIED UPON BY THE AO. THE SA ID POWER CANNOT BE EXERCISED CASUALLY AND IN A ROUTINE MANNER. WE ARE CONSTRAINED TO OBSERVE THAT IN THE PRESENT CASE, THERE HAS BEEN NO APPLICATION OF MIND BY THE ADDL. CIT BEFORE GRANTING THE APPROVAL. (PA RA 19). (B) HONBLE SUPREME COURT OF INDIA IN THE CASE OF CI T VS. S. GOYANKA LIME & CHEMICAL LTD. REPORTED IN (2015) 6 4 TAXMANN.COM 313 (SC) ARISING OUT OF ORDER OF HONBLE HI GH COURT OF MADHYA PRADESH IN CIT VS. S. GOYANKA LIME & CHEMICALS LTD. (2015) 56 TAXMANN.COM 390 (MP). SECTION 151, READ WITH SECTION 148 OF INCOME TAX ACT, 1961 INCOME ESCAPING ASSESSMENT SANCTION FOR ISSUE OF NOTICE (RECORDING OF SATISFACTION) HIGH COURT BY IMPUGNED ORDER HELD THAT WHERE JOINT COMMISSIONER RECORDED SATISFACTION IN MECHANICAL MANNER AND WITHOUT APPLICATION OF MIND TO ACCORD SANCTION FOR ISSUING NOTICE UNDER SECTION 148, REOPENING OF ASSESSMENT WAS INVALID WHETHER SPECIAL LEAVE PETITION FILED AGAINST IMPUGNED ORDER WAS TO BE DISMISSED HELD, YES (IN FAVOUR OF THE ASSESSEE). 13 5.2 IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND RESP ECTFULLY FOLLOWING THE PRECEDENTS, AS AFORESAID, I AM OF THE CONSI DERED VIEW THAT APPROVAL GRANTED BY THE ADDL. CIT,RANGE-65, NEW DE LHI IS A MECHANICAL AND WITHOUT APPLICATION OF MIND, WHICH IS NOT VALID FOR INITIATING THE REASSESSMENT PROCEEDINGS ISSUE OF NOTICE U/S. 148 OF THE I.T. ACT, 1961 AND IS NOT IN ACCORDANCE WITH SECTION 151 OF THE I.T. ACT, 196 1, THUS, THE NOTICE ISSUED U/S. 148 OF THE ACT IS INVALID AND ACCORDINGLY TH E REOPENING IN THIS IS BAD IN LAW AND THEREFORE, THE SAME IS HEREBY QUASHED . ACCORDINGLY, THE GROUND NO. 2 RAISED BY THE ASSESSEE IS ALLOWED. SINCE T HE OTHER GROUNDS WERE NOT RAISED BY THE ASSESSEE, THE SAME ARE DISMISSED AS SUC H. ACCORDINGLY, THE ASSESSEES APPEAL IS PARTLY ALLOWED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STAND S PARTLY ALLOWED ORDER PRONOUNCED ON 16-10-2019. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATED: 16-10-2019 SRB COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI. 14