ACIT, CIrcle- 23(1), New Delhi V. Shree Balkishan Agarwal Glass Industries Ltd., Delhi

ITA 5821/DEL/2017

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9460 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 28-09-2022
• Assessment Year: 2006-2007
• Appeal Filed On: 10-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Invalid notice; Income from undisclosed sources; Reassessment proceedings; Borrowed satisfaction; Set aside
• Section: 147; 131; 148; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : G : NEW DELHI BEFORE SHRI C.M. GARG, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ITA No.5821 & 5822/Del/2017 Assessment Year: 2006-07 ACIT, Circle-23(1), New Delhi. Vs. Shree Balkishan Agarwal Glass Industries Ltd., J-4, 126-B, DDA Flats, Kalkaji, New Delhi – 110 019. PAN: AABCS2870C (Appellant) (Respondent) Assessee by : Shri S.K. Gupta, CA Revenue by : Shri Jeetender Chand, Sr. DR Date of Hearing : 29.09.2022 Date of Pronouncement : 10.2022 ORDER PER C.M. GARG, JM: These appeals filed by the Revenue are directed against the orders dated 23.06.2017 and 06.06.2017 of the CIT(A)-30, New Delhi, relating to Assessment Year 2006-07. 2. The grounds of appeal raised by the Revenue read as under:- ITA No.5821/Del/2017 “1. “The CIT(A) has erred in deciding the appeal as the assessment order passed by the AO is in the case of the assessee having PAN “AABCS8896C” , name - “ Shree Bal Kishan Aggarwal Glass Industries Pvt. Ltd.” whereas the appeal order is in the case of PAN - ITA Nos.5821 & 5822/Del/2017 2 AABCS2870C” and on the name Shree Bal kishan Aggarwal Glass Industries Pvt. Ltd., whereas; as per the department data base the name against PAN AABCS 2870 C is Shri Bal Kishan Aggarwal Glass Industries Ltd.?” “2. The CIT(A) failed to verify whether the PAN AABCS8896C and AABCS2870C belongs to two different persons. The C1T(A) ought to have referred the matter to the AO for verification particularly in view of the fact that a person cannot have two PANs. The C1T(A) has erred in deleting the said addition of Rs. 2,05,00,000/- which is based on the entries taken from S. K. Jain Group of concerns. “3. That the appellant craves the leave to amend, modify, alter and or forgo any of the ground(s) without prejudice to each other.” Revised Grounds of Appeal in the case of M/s Shree Bal Kishan Aggarwal Glass Pvt Ltd. –ITA No.5821/Del/2017 for AY 2006-07- reg-PAN-AABCS8896C 1. “The CIT(A) has erred in deciding the appeal as the assessment order passed by the AO is in the case of the assessee having PAN - AABCS8896C, name- Shree Bal Kishan Aggarwal Glass Industries Pvt Ltd whereas the appeal order is in the case of PAN - AABCS2870C and on the name Shree Bal kishan Aggarwal Glass Industries Pvt Ltd. whereas as per the department database the name against PAN AABCS2870C is Shri Bal Kishan Aggarwal Glass Industries Ltd." 2. "The CIT(A) failed to verify whether the PAN AABCS8896C and AABCS2870C belongs to two different persons. The CIT(A) ought to have referred the matter to the AO for verification particularly in view of the fact that a person cannot have two PAN. The CIT(A) has erred in deleting the said addition of Rs. 2,05,00,000/- which is based on the entries taken from S. K. Jain Group of concerns" 3. “The CIT(A) has erred in wrongly quashing assessment u/s 147/144 on the ground that requisite notice u/s 148 dated 21.03.2031 was never served on the assessee. Whereas non service at the latest address of the assessee was due to confusion created by the asseseee by way of maintaining two PAN's. Accordingly Ld.CIT(A) has erred in making the assessee a beneficiary of his own default", ITA Nos.5821 & 5822/Del/2017 3 4. "That the appellant craves the leave to amend, modify, alter and of forgo any of the ground(s) without prejudice to each other." ITA No.5822/Del/2017 1. The CIT(A) has erred in deciding the appeal as the Penalty order passed by the AO is in the case of the assessee having PAN “AABCS8896C” , name - “ Shree Bal Kishan Aggarwal Glass Industries Pvt. Ltd.” whereas the appeal order is in the case of PAN “AABCS2870C” and on the name Shree Bal kishan Aggarwal Glass Industries Pvt. Ltd., whereas; as per the department data base the name against PAN AABCS 2870 C is Shri Bal Kishan Aggarwal Glass Industries Ltd.” “2. The CIT(A) failed to verify whether the PAN AABCS8896C and AABCS2870C belongs to two different persons. The CIT(A) ought to have referred the matter to the AO for verification particularly in view of the fact that a person cannot have two PANs. This resulted in thereby deleting the said penalty of Rs. 69,00,300/- which was based on the addition of Rs. 2,05,00,000/- (entries taken from S. K. Jain Group of concerns) in the substantial order. “3. That the appellant craves the leave to amend, modify, alter and or forgo any of the ground(s) without prejudice to each other.” Application of the Respondent Assessee under Rule 27 of the IT(AT) Rules, 1963. 3. The ld. AR has filed an application under Rule 27 of the IT(AT) Rules, 1963 on 01.04.2022. The ld. AR, placing reliance on various judgements including the judgement of the Hon’ble jurisdictional High Court of Delhi in the case of Sanjay Sawhney vs. Pr.CIT dated 18.05.2020 in ITA No.834/2019 submitted that the order of the Commissioner under challenge could be defended by the Respondent assessee on all grounds including those grounds which have been decided against him. He also submitted that similar view has been taken by the Hon’ble High Court of Gujarat in the case of Dahod Sahakari Kharid ITA Nos.5821 & 5822/Del/2017 4 Vechan Sangh Ltd. vs. CIT, 149 Taxman 456 (Guj) and in the case of PCIT vs. Sun Pharmaceuticals Industries Ltd. (2017) 86 taxmann.com 148 (Guj); the Hon’ble Supreme Court in the case of Hukam Chand Mills Ltd. vs. CIT; and the Hon’ble Bombay High Court in the case of New India Life Assurance Co., 31 ITR 844 (Bom). The ld. AR submitted that the application under Rule 27 of the IT(AT) Rules, 1963 may kindly be admitted for adjudication. 4. The ld. Sr. DR submitted that it is the prerogative of the assessee Respondent to invoke the Rule 27 of the IT(AT) Rules as per the requirement of facts and circumstances of the case. In view of the above, the application of the assessee under Rule 27 of the IT(AT) Rules, 1963 is admitted for adjudication by respectfully following the judgement of the jurisdictional High Court of Delhi in the case of Sanjay Sawhney vs. Pr.CIT and other judgements as quoted above. 5. The grounds of the assessee read as follows:- “1. Invocation of non-existing provision of the Act to assume jurisdiction u/s 147 of the Act: From perusal of performa at page 3 in item No.7, it can be seen that the AO has assumed power to initiate action u/s 148 by invoicing sec 147(b) of the Act. Here it may be appreciated that the sections 147(a)/l 47(b) have ceased to be in the statute book from 01.04.1989. The mentioning of these sections wrongly shows non application of mind by the AO and also by the authorities providing satisfaction u/s 151. This objection was raised before Ld CIT(A). The Ld CIT(A) dismissed this objection in para 6.3 at page 16 of CIT(A) order on the ground that this mistake in format is typographical human error which shall not render the reopening process invalid and same is curable u/s 292B of IT Act. This view is contrary to the decision of the Hon'ble Bombay High Court in the case of Smt Kalpana Shantilal Haria Vs ACIT W.P.(L) No.3063/2017 dated 22.12.2017 where easement proceedings were quashed on identical reason and also held ITA Nos.5821 & 5822/Del/2017 5 that same is incurable u/s 292B/292BB of IT Act. The jurisdictional Delhi High Court in Yum! Restaurants Asia Pte Ltd VS DDIT in WP(C) No. 614/2014 dated 31.08.2017 has also considered the glaring mistakes in the performa for approval as the valid ground for quashing the assessment on the premise of non-application of mind by all the authorities involved in the process of recording reasons and providing satisfaction u/s 151. Reliance is also placed on the recent judgment of Hon’ble Delhi High Court in the case of Best Cybercity India P Ltd vs ITO WP(C) 12360/2018 td: 21.05.2019 in para 23. Further, the Hon’ble Bench of Delhi ITAT in the following cases has quashed the reassessment proceedings for initiation of proceeding by invoking repealed provision of sec 147(b) of IT ACT: • M/s VRC Township P Ltd ITA No.1503/Del/2017 dt: 14.10.2020; • M/s Maheshwari Roller Flour Mills P Ltd vs ITO ITA No.4257/Del/2019 dt: 17.12.2020; • M/s Madhu Apartment P Ltd ITA No.3869/Del/2018 2. Action initiated bv the AO on borrowed satisfaction of other authority dehorse any application of mind: a. The AO has initiated action u/s 147 on the basis of incomplete information which is evident from the fact that the reason recorded u/s 147 on 19.03.2013 on the basis of incomplete information provided by investigation dt:12.03.2013. The complete information was containing all the required information disclosing the name of the entry provider with details of transaction was provided to the AO by Ld Addl CIT, Range -8, Delhi vide letter dt: 22.03.2013 after issuing of notice u/s 148 dt: 21.03.2013. The reason why the information was incomplete is evident from the contents of the reason recorded. The reason does not show names of the entry provider/providers, amounts accepted from each entity/entities, mode particulars of remittance received which contained in the information remitted to the AO after issue of notice u/s 148 of IT Act. Action of the information which was actionable in view of incompleteness thereof renders the reassessment proceeding initiated thereby void-ab-initio. b. From the complete information passed by the Addl CIT, Range -8, Delhi dt: 22.03.2013 and form perusal of assessment order at page 2, it can be clearly seen that all the transaction of Rs.2,00,00,000/- are dated 30.03.2005 which falls in AY 2005-06 and not in year under appeal and therefore on the basis of information available, the AO was not justified in taking action in different assessment year i.e. AY ITA Nos.5821 & 5822/Del/2017 6 2006-07. Therefore reopening based on facts drawn on incorrect/irrelevant material. Reliance is placed in the case of c. Non-mentioning of names of entry providers, mode particulars of remittance received, amount accepted from each entry provider and nature of accommodation entry shows sheer non-¬application of independent application of mind by the AO. In the respondent assessee own case for AY 2003-04, the Hon'ble ITAT in ITA No.l523/Del/2014 in para 36 at page 35 has quashed the assessment proceeding taking non-cognizance of above vital facts. d. From perusal of reason recorded, it can be seen that the AO has not looked into the return of income which is part of the records of the department. In the performa also, the AO does not mention the fact whether return has been filed or not, Non-examination of basic detail of return of income leads to quashing of assessment. Reliance for non-examination of return of income is placed in the case of Brij Pal Singh Tomer ITA No.2539/Del/2019 and the Judgment of the Hon'ble Jurisdictional Delhi High Court in Shamshad Khan vs ACIT 395 ITR 265 (Del). The department cannot and is not entitled to raise the plea that companies existence on other PAN number was not known to it as the same assessing authority has completed the assessment of assessee for AY 2003- 04 on the PAN number on which return of income for present AY was filed. 3. Assumption of jurisdiction on the basis of invalid notice: From perusal of notice at page 1, it can be seen that notice u/s 148 has been issued in the name of the artificial juridical entity without addressing the name of incumbent compliant. Therefore, issuance of notice in the name of the company instead of the name of the principal officer of a company, that too, to the wrong address, makes the notice bad in law as per the ratio of the decision of the Calcutta High Court in the case of Rama Devi Agrawal Vs. CIT reported at 117 ITR 256 [Calcutta] and the decision of the Hon'ble Allahabad High Court in the case of Madan Lai Agrawal Vs. CIT reported at 144 ITR 745 [All]. In the respondent assessee own case for AY 2003-04, the Hon’ble ITAT in ITA No.l523/Del/2014 in para 22 at page 18 has quashed the assessment proceeding on account of invalid notice. 4. Recording of reason after taking approval u/s 151 of IT Act: In para 14 of reason recorded (PB 9), there is mention of approval u/s 151 of the Act already taken which implies that such approval has been taken by the AO before recording of reason on 19.03.2013. Even if it is argued that it is a clerical mistake, such mistake shows besides ITA Nos.5821 & 5822/Del/2017 7 lack of application of mind on the part of the AO but also on part of approving authority. On similar facts, mentioned in the reason recorded, the Hon'ble ITAT in respondent assessee own case for AY 2003-04 in ITA No.l523/Dei/2014 in para 29 at page 29 has quashed the reassessment proceeding. 5. Mechanical approval u/s 151 of IT Act. Mere appending "Yes" by approving authority shows that the approval is mechanical without application of mind. The exercise by the approving authority appears to have been ritualistic and formal rather than meaningful, which goes against the rationale of the safeguard of approval by a higher ranking officer provided in the Act. Inconsistencies and omissions pointed out in support of ground on non-application of mind are the glaring mistakes committed by the AO and non-pointing out such omissions by the approving authority and resulting non-correction of the same, before the approval was accorded, shows that the said authority have acted mechanically in granting sanction u/s 151 of the Act. Reliance is placed on the decision of M/s Synfonia Tradelinks P Ltd vs ITO W.P.(C) No.12544/2018 dt: 26.03.2021 (Del) has quashed the reassessment proceeding based on mechanical approval granted by approving authority by appending expression “Approved”. Further reliance is placed in the decision of RMP Holdings P Ltd ITA No.7243/Del/2019 dt: 31.07.2020, Chhugamal Rajpal vs. S.P. Chaliha & Ors. - 79 ITR 603 (SC) and Pr. CIT vs. N. C. Cables Ltd 391 ITR 11 (Del).” 6. On careful consideration of the rival submissions, from the order of the coordinate Bench of ITAT in the case of Omkam Developers Ltd. (supra), I observe that in the similar set of facts and circumstances, similar legal contention was placed before the ‘E’ Bench which was adjudicated as follows:- “10. We have heard rival submission of the parties on the issue in dispute raised in the cross appeals. As far as ground No. 1 of the appeal of the assessee is concerned, the assessee has challenged the validity of the reassessment proceeding on the ground that approval for issue of the notice under section 148 of the Act was granted by the LearnedPr.CIT in a mechanical manner and without application of mind and, therefore, reassessment proceeding must be quashed. For adjudicating this issue, the reasons recorded by the Assessing Officer ITA Nos.5821 & 5822/Del/2017 8 and relevant proforma of approval granted by the Pr. CIT are reproduced as under: "Reason for the belief that income has escaped assessment in the case of M/s, Omkam Developers Pvt. Ltd. A.Y. 2009-10 (Pan:AAACQ5036B) 1. Name & Address of the Assessee : M/s Omkam Developers Ltd, 702, Arunachal Building, 19, Barakhamba, Road, Connaught Place, New Delhi 2. Assessment Year 2009-10 3. Financial Year 2008-09 4. PAN AAACO05036B PUC is a proposal for reopening the case u/s 147 of the Act for the A.Y 2009- 10 in the prescribed Performa. The information received from ADIT (Inv ), Unit-3(4), Kolkata vide his letter dated ADIT/U-3(4)/FIU-IND/MJS/15-16/4l1 dated 22.06.2015.wherein it is mentioned that; in the suspicion transaction report of 1000010583 in the name of Manohar Jaykishan Shah was received and it was reported in the I said FIU-IND-STR No. 1000010583 that there were 311 linked entities amongst whom fund transfers were made and in few accounts there were deposits also. In pursuance to the said report. Bank Statements of various entities have been obtained and on investigation, it has been noticed that Omkam Developers Pvt. Ltd (Pan AAACO5036B] was one of the beneficiaries during the F.Y 2008-09 relevant A.Y.2009-10 and the amount brought through I accommodation entries by the above mentioned company is Rs. 193.00 Lakhs. Copy of the Status Report in the case of Manohar Jay kishan Shah in connection with FIU-IND-STR No.1000010583 is reproduced below:- A. Background: • One Suspicious Transaction Report was received in the month November, 2009 from FIU-IND. In the said report, 31 related accounts were reported out of which 12 accounts were found to be associated, with business of Metal Trading Wherein Mr. ITA Nos.5821 & 5822/Del/2017 9 ManoharJaykishan Shah is a Proprietor/Signatory. There are other 19 outstation Branch Accounts which are linked/connected to main 12 accounts and having non-related business/not in the same line of business accounts. During the financial year 2008-09, high, value cheques totaling around Rs. 2030 crore are deposit at outstation branches in these accounts. Subsequent to which on realisation of high value credit amount, debit internal transfertransaction of large value and in round figures has been, transacted within connected group/linked accounts. The cumulative turnover In 31 accounts discussed was reported tobe 673 crores. B. VERIFICATION OF FACTS AND INVESTIGATIONS DONE: To verify in the STR, the Bank Accounts of all 31 accounts mentioned in the STR were requisitioned from the Bank and scrutinized. The 31 Bank accounts- were opened atdifferent, branches of the Development Credit Bank. The following, facts emerged from the scrutiny of Bank Accounts: I. There were 7 Bank Accounts belonging to 6 entities in which cash of Rs. 15.26 crore was deposited in the F.Y.-2008-09: The cash deposited were swiftly Transferred to other entities through Cheques/RTGS. These-6 entities are proprietorships. The detail is given as per Annexure-C. The funds from other entities through Cheques/RTGS were also received in these accounts. The details of another 21proprietorships given are STR is as per Annexure-C1. II. The find from the entities mentioned in Annexure-C and C1 were transferred to a number of entities which are mostly entities already identified as the companies controlled by the entry operators, few of them have been listed in Annexure-1. III. The fund was rotated among the entities detailed in Annexure-C, C1 and Annexure-1 IV. There were 6 Bank Accounts Belonging to 6 Companies in which funds were received from mostly entities discussed in Annexure-C, C1 and Annexure-1 and the same was swiftly transferred to the other entities (Mostly Companies). The details of 6 such companies are given in Annexure -5 V. The fund was transferred to the entities which are the real beneficiary of the funds from the companies mentioned in Annexure- S. The details of such, companies are given in Annexure -B. ITA Nos.5821 & 5822/Del/2017 10 Modus operandi of providing accommodaton entry The summons u/s 131 were issued to the individuals and entities mentioned in the STR. The field verification from the inspector was also done. In most of the cases either the summons could not he served or there was no compliance, The facts of immediate source of the beneficiaries being shell companies have already been established and recorded u/s 131 of the Income Tax Act-1961 during the investigation in other cases. The fact as also corroborated by the non-compliance to the summons as well as non-existence of real business of most of the entities mentioned in Annexure-C, C1 and l and S. Flow Chart of Cash Flow Cash deposit in proprietorship concerns  Layering of funds through dummy Proprietorships and Shell companies  Fund transfer to Shell/Paper Company  Fund to the Beneficiaries Conclusion (i) In retrospect it can be rightly conceded that, the beneficiary companies have introduced n cash in primary accounts discussed in Annexure-C and s symbolized by various companies (created for the purpose re-1, Annexure-S) operated by entry operators by entry operators, the unaccounted funds have been entered In the regular books of accounts of the beneficiary companies. (ii) in view of the above, the total amount which has been transferred to the beneficiaries or the recipient companies from the bank accounts of paper companies during F.Y. 2008-09 is details in Annexure-8. The A.O. of the all beneficiary (Annexure-B) companies is being appraised of ] regarding accommodation entry accepted by the companies in F.Y. 2008-09. Further, A.O. of V concerns listed in Annexure-C, C-l and S is also being intimated regarding, cash deposit and credit made in different bank controlled by them for taking necessary action. ITA Nos.5821 & 5822/Del/2017 11 It appears that assessee M/s Omkam Developers Ltd. has received 'I bogus share capital/premium to the tune of Rs.1.93 Crores. The Income Tax | Returns of the assessee were also examined and noticed that the share premium; of assesses was increased to Rs.81,28,52,000/- in the relevant year from Rs. 17,69,50,000/-in the preceding year. As discussed in earlier paras, the assessee has obtained such entries through above mentioned modus-operandi, it is actually assessee's own money (cash) which was rotated through such channel. This cash was out of his unaccounted income. I have reasons to believe that an amount of Rs.1.93 crores has escaped from the Assessment for the A.Y. 2009-10 which was chargeable to tax. I am also satisfied that on account of failure on the part of the assessee to I disclose truly and fully all the material facts necessary for assessment for the j above assessment year, the income chargeable to tax to the tune of Rs.193.00 Lakh as escaped assessment with the meaning of Section 147 of the IT Act 1961 I have perused the information received from the Investigation Wing,Kolkata The Investigation Wing of the Department has sent comprehensive detail comprising inter alia the beneficiary's name, value of entry taken etc. In the aforesaid case as per record from ITD, return of income was filed on declaring Rs.2,389/- income, it is noticed that the assessee company M/s Omkam Developers Ltd, received accommodation entries to the tune of Rs.1.93,crores during the F.Y. 2008-09 relevant to assessment year 2009-10 from the entry operators as mentioned in the chart above and same was not offered for taxation. Having perused and considered the information, I have reason to believe that income of the assessment company to the extent of Rs.193 Lakh has escaped assessment for the A.Y. 2009-10. Therefore, proceedings u/s 147 i.e. clause (b) of Explanation 2 of the provisions of section 147 of the I.T. Act, 1961 is proposed to be initiated for the A.Y. 2009-10. As per ITD record, Return of Income has filed on 30.03.2010 at an income of'Rs.2,389/- for the A.Y. 2009-10. Since four years has been expired from the end of the relevant assessment year in this case for the said assessment year, it is ITA Nos.5821 & 5822/Del/2017 12 therefore I/requested that the reasons recorded above for the purpose of reopening of assessment is put up for kind satisfaction of Pr.CIT, Delhi-7, New Delhi in terms of proviso, to Section 151 of the Income Tax and approval for issue of notice u/s 147 may kindly be accorded." 10.1 On perusal of the proforma for the approval granted by the PCIT, it is evident that in the relevant column No.13 for satisfaction of the Pr.CIT, he has only mentioned "yes". No other information is available on record or provided by the ld. DR, which could establish application of mind by the CIT, while granting sanction/approval for issue of notice u/s 148 of the Act. No other evidence was produced as to substantiate that matter was ever discussed between the Assessing Officer or Addl. CIT and the Learned Pr.CIT for arriving at satisfaction of Learned Pr.CIT on the reasons recorded by the Assessing Officer. Even no evidences whether Ld PCIT examined the material relied upon by the Ld AO for reopening, was produced ITA Nos.5821 & 5822/Del/2017 13 before us. In similar circumstances, Hon'ble Delhi High Court in the case of NC Cable Ltd (supra) held that section 151 of the Act clearly stipulates that Learned CIT, who is the competent authority to authorize the reassessment notice, has to apply his mind and form an opinion. The Hon'ble High Court further observed that the mere appending of the expression 'approved' says nothing. It is not as if the CIT has to record elaborate reasons for agreeing with the noting put up but at the same time, satisfaction has to be recorded of the given case, which can be reflected in the briefest possible manner. The Hon'ble High Court further observed that in that case the exercise appeared to have been the ritualistic and formal rather than meaningful, which is the rationale for safeguard of an approval by a high-ranking officer. Thus, in the instant case, mere mentioning of "yes' for approval, without any other evidence of application of the mind, amounts to mechanical approval by the LearnedPr.CIT. 10.2 Further in Column No. 7 of the proforma, the section for invoking reassessment has been recorded as 147(b) of the Act. During the relevant period, section 147(b) was no longer in existence. This shows that the Ld. AO has filed the Proforma in mechanically manner and Ld. CIT has also approved the same mechanically. In the case of Madhu Apartment Private Limited vs. ITO, ITA.Nos.3869 & 3870/Del./2018 wherein the Tribunal, Delhi Bench, vide order dated 01/02/2021 held as under: "7. After considering the rival submissions, we are of the view that the issue is covered by the Order of ITAT, Delhi G-Bench, Delhi in the case of VRC Township Pvt. Ltd., Delhi (supra) in which reopening of the assessment in identical circumstances was held to be bad in law and sanction accorded by the Sanctioning Authority was also found invalid, therefore, reopening of the assessment was quashed. In the present case, the Learned Counsel for the Assessee has pointed-out that assessee has raised this issue before the Ld. CIT(A), but, he has rejected the submissions of the assessee holding that Section 147(b) as mentioned in the reason and Format is a typographical human error which is curable under section 292B of the I.T. Act, 1961. This issue is also considered in the Order of VRC Township Pvt. Ltd., (supra) following the decision of Hon'ble Bombay High Court in the case of Kalpana Shantilal Haria vs. ACIT [2017] 100 CCH 165 (Bom.). Following the same reasons for decision, we set aside the Orders of the authorities below and quash the reopening of the assessment in both the assessment years under appeals. All additions stand deleted. Accordingly, appeals of the Assessee are allowed." ITA Nos.5821 & 5822/Del/2017 14 10.3 In the instant case before us, also the Learned DR has argued that the mistake of noting section under section 147(b) of the Act for reassessment proceeding is a clerical mistake, however, the Tribunal in the above decision has rejected the said contention and quashed reassessment proceeding on the ground of non-application of mind while granting approval for reopening of the assessment under section 151 of the Act. 10.4 Respectfully, following the decision of the Hon'ble Delhi High Court in the case of NC Cable Ltd (supra) and decision of the Tribunal in the case of Madhu Apartment Pvt. Ltd (supra), we quash the reassessment proceeding in the case of the assessee. 10.5 Since we have quashed the reassessment proceeding while adjudicating ground No.1 of the appeal of the assessee, no additions made by the Assessing Officer could be sustained. As far as other grounds of appeal of the assessee challenging validity of reassessment proceeding are concerned, same are rendered merely academic in nature and, therefore, we are not adjudicating upon those grounds. As ITA No.6862/Del./2018 & 7507/Del./2018 far as grounds of the parties challenging merit of the addition are concerned, same are rendered infructuous in view of the reassessment proceeding already quashed by us. 11. In the result, the appeal of the assessee is allowed, whereas appeal of the Revenue is dismissed.” 7. From the said relevant part para 7 of the Tribunal order, in the case of Madhu Apartment (supra) which has been reproduced in the Tribunal order in para 10.2 in the case of Omkam Developers Ltd., we note that the coordinate Bench before recording its conclusion has also referred to the judgement of the Hon’ble High Court of Bombay in the case of Smt.Kalpana Shantilal Haria vs. ACIT (supra) wherein it was held thus:- “7. Mr. Chanderpal, learned Counsel appearing for the Revenue tendered a copy of the letter dated 19th December, 2017 issued to the petitioner wherein the Assessing Officer has stated that the words “147(b)” were inadvertently filled in the prescribed form, instead of Section 147 of the Act while obtaining the sanction from the Joint Commissioner of Income Tax. It is further submitted on behalf of the ITA Nos.5821 & 5822/Del/2017 15 Revenue that the same is a curable defect under section 292B of the Act. Therefore, the impugned notice cannot be held to be bad for mere incorrect mentioning of section on account of the mistake. 8. There can be no dispute with regard to the application of Section 292B of the Act to sustain a notice from being declared invalid merely on the ground of mistake in the notice. However, the issue here is not with regard to the mistake / error committed by the Assessing Officer while taking a sanction from the Joint Commissioner of Income Tax but whether there was due application of mind by the Joint Commissioner of Income Tax while giving the necessary sanction for issuing the impugned notice. It is a settled principle of law that sanction granted by the higher Authority for issuing of a reopening notice has to be on due application of mind. It cannot be an mechanical approval without examining the proposal sent by the Assessing Officer. Prima facie, it appears to us that if the Joint Commissioner of Income Tax would have applied his mind to the application made by the Assessing Officer, then the very first thing which would arise is the basis of the notice, as the provision of law on which it is based is no longer in the statute. Non pointing out the mistake / error by the Joint Commissioner of Income Tax on the part of the Assessing Officer is prima facie evidence of non application of mind on the part of the sanctioning authority while granting the sanction.” 8. We also take respectful cognizance of the judgement of the Hon’ble High Court of Delhi in the case of Yum! Restaurants Asia Pte Ltd. vs. DDIT in WP(C) No.614/2014 dated 31.08.2017 as relied on by the ld. AR wherein their Lordships speaking for the Hon’ble jurisdictional High Court considered the glaring mistake in the Performa for approval as the valid ground for quashing reassessment on the foundation of non-application of mind by all the authorities involved in the process of recording reasons and providing approval u/s 151 of the Act. ITA Nos.5821 & 5822/Del/2017 16 9. In the present case, the copy of the form for recording the reason for initiation of proceedings u/s 147 of the Act and for obtaining the approval u/s 151 of the Act is available at page 3 of assessee’s paper book. The ld. Sr. DR did not dispute that in the column No.7, the AO mentioned that the provision of section 147(b) of the Act is applicable. For the sake of completeness, the said format is being reproduced below:- ITA Nos.5821 & 5822/Del/2017 17 10. Therefore, it is clear that the AO, in the first page of reasons (supra) mentioned in column 7 that provisions of section 147(b) is applicable which is non-existent in the statute book for AY 2010-11. This apparently shows non- application of mind by the AO while filling proforma in a mechanical manner and the ld. ACIT and Ld. PCIT also approved the same in a mechanical manner. So far as the contention of the ld. Sr. DR that this defect is curable u/s 292B of the Act is concerned, the same contention has been decided by the ITAT Delhi Bench in the case of Madhu Apartments India Pvt. Ltd., ITA No.3869 & 3870/Del/2018, order dated 01.02.2021, the relevant part of which has already been reproduced in the earlier part of this order since the same was referred to and included in the relevant part para 10.2 of the order of the ITAT in the case of Omkam Developers Ltd. (supra). It was held that this kind of defect and non- application of mind by the AO is not curable u/s 292B of the Act. Therefore, respectfully following the judgement of the Hon’ble jurisdictional High Court of Delhi in the case of Yum! Restaurants (supra) and the judgement of the Hon’ble Bombay High Court in the case of Smt. Kalpana Shantilal Haria (supra) and orders of ITAT Delhi Bench in the cases of Omkam Developers Ltd. vs. ITO (supra) and Madhu Apartments P. Ltd. vs. ITO (supra), we hold that the impugned reassessment proceedings and the impugned reassessment order dated 03.03.2014 u/s 147/144 of the Act deserve to be quashed only on this ground. We order accordingly. ITA Nos.5821 & 5822/Del/2017 18 11. Since, by the earlier part of this order, we have quashed the reassessment proceedings and reassessment order while adjudicating the legal grounds of the assessee, no additions made by the AO could be held as sustainable. Therefore, other grounds of the assessee challenging the validity of reassessment proceedings under Rule 27 of ITAT Rules, 1963 are rendered academic in nature and, therefore, we are not adjudicating upon those legal contentions of the assessee. The ld. Sr. DR has filed written submissions on merits. So far as the grounds of the Revenue on merits are concerned, the same are rendered infructuous since the reassessment proceedings and the impugned reassessment order (supra) have already been quashed in the earlier part of this order. ITA No.5822/Del/2017 12. Since we have allowed the ground No.1 of the assessee under Rule 27 of the IT(AT) Rules and have quashed the impugned assessment order, the additions made by the AO and confirmed by the ld.CIT(A) do not hold the field and the same are deleted. Therefore, the appeal of the Revenue challenging the deletion of penalty have become infructuous and we are not adjudicating the same as having become infructuous. 13. In the result, both the appeals of the Revenue stand dismissed. Order pronounced in the open court on 31.10.2022. Sd/- Sd/- (PRADIP KUMAR KEDIA) (C.M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 31 st October, 2022. ITA Nos.5821 & 5822/Del/2017 19 dk Copy forwarded to : 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi