Rishendra Pal Singh, New Delhi V. ITO, Ward-64(3), New Delhi

ITA 821/DEL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3971 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 04-02-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PARUL SINGH
• Assessee Lawyers: SUMIT GOE L
• Keywords: Reopening of assessment; Reassessment proceedings
• Section: 22; 153C; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHE : SMC : NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 821/DEL/2019 ASSESSMENT YEAR : 2010-11 RISHENDRA PAL SINGH, C/O RAJ KUMAR & ASSOCIATES,CAS L-07A (LGF), SOUTH EXTENSION, PART-II, NEW DELHI 110 049 (PAN: AODPP8827P) VS. ITO, WARD-64(3), NEW DELHI (APPELLANT) ( RESPONDENT) ASSESSEE BY : MR. RAJ KUMAR, CA & SH. SUMIT GOEL, CA DEPARTMENT BY : MS. PARUL SINGH, 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 05.12.2018 IN RE LATION TO THE ASSESSMENT YEAR 2010-11 ON AS MANY AS 05 GROUNDS. 2. BUT LATER ON, THE ASSESSEE HAS FILED THE FOLLOWING 0 2 ADDITIONAL GROUNDS AND PRAYED TO ACCEPT THE ADDITIONAL GROUNDS OF APPEAL HAVING REGARD TO THE RATIO OF THE DECISION OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF NATIONAL THERMAL POWER CORPORATION VS. CIT (1998) 22 9 ITR 383 (SC). 1. THAT UNDER THE FACTS AND CIRCUMSTANCES NO PROCEEDINGS U/S. 147/148 COULD HAD BEEN INITIATED ON THE BASIS OF SEIZ ED MATERIAL IN SEARCH OF A 3 RD PARTY AGAINST CORRECTLY ONLY US. 153C OF THE I.T. ACT. 2 2. THAT THE INITIATION OF PROCEEDINGS U/S. 147/148 ARE IL LEGAL AND INCOMPETENT ON ACCOUNT OF FATALLY DEFECTIVE APPROVAL U/ S. 151 OF THE I.T. ACT. 3. HOWEVER, AT THE TIME OF HEARING, LD. AR OF THE A SSESSEE ONLY ARGUED THE ADDITIONAL GROUND NO. 2 AND STATED THAT THIS ADDI TIONAL GROUND IS PURELY LEGAL WHICH GOES TO THE ROOT OF THE MATTER AND ALL FA CTS AND MATERIAL REQUIRED FOR THIS GROUND ALREADY AVAILABLE ON RECORD AND THER EFORE, THE SAME NEEDS TO BE ADMITTED, IN VIEW OF THE HONBLE SUPREME COURT DE CISION IN THE CASE OF NTPC 229 ITR 383 (SC). HE FURTHER DREW MY ATTENTIO N TOWARDS PAGE NO. 4, COLUMN NO. 10 OF ASSESSEES PAPER BOOK WHICH IS A COPY OF APPROVAL GRANTED BY THE ADDL. COMMISSIONER OF INCOME TAX, RANGE-55, NEW DELHI WHEREIN HE HAS GRANTED THE APPROVAL BY MENTIONING THAT IT IS A FIT CASE FOR ISSUE OF NOTICE U/S. 148 WHICH SHOWS THAT LD. ADDL. CIT, RANGE-55 HAS NOT RECORDED PROPER SATISFACTION AND WITHOUT APPLICATION O F MIND GAVE THE APPROVAL IN A MECHANICAL MANNER. HE FURTHER DREW MY ATTENTION TOWARDS PAGE NO. 4, COLUMN NO. 11 OF ASSESSEES PAPER BOOK WHICH IS A COPY OF FURTHER APPROVAL GRANTED BY THE PR. COMMISSIONER OF INCOME TAX, DELHI-19, NEW DELHI WHEREIN HE HAS GRANTED THE APPROVAL BY MENTIONING THAT YES, AS PER FACTS / REASONS RECORDED, I AM SATISFIED THA T IT IS A FIT CASE FOR ISSUE OF NOTICE U/S. 148 WHICH SHOWS THAT LD. PR. CIT, DELHI-19, NEW DELHI HAS ALSO NOT RECORDED PROPER SATISFACTION AND WI THOUT APPLICATION OF MIND GAVE THE APPROVAL IN A MECHANICAL MANNER. HE FU RTHER STATED THAT THIS LEGAL GROUND IS SQUARELY COVERED BY THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF UNITED ELECTRICAL COMPANY (P) LTD . VS. CIT & ORS. 258 ITR 317 (DEL.). THEREFORE, HE REQUESTED THAT THE SAME RATIO MAY BE FOLLOWED IN THE PRESENT CASE AND APPEAL OF THE ASSESSEE MAY BE ALL OWED ACCORDINGLY BY QUASHING THE REASSESSMENT PROCEEDINGS. 4. ON THE CONTRARY, LD. DR STATED THAT SINCE THIS ADDIT IONAL GROUND WAS NOT TAKEN BEFORE THE LD. CIT(A), HENCE, THE SAME MAY NOT BE ADMITTED AND 3 APPEAL OF THE ASSESSEE MAY BE DISMISSED. HE FURTHER RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND THE CASE LAWS CITED THEREIN . 5. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECOR DS, ESPECIALLY THE ADDITIONAL GROUND FILED BY THE ASSESSEE AND THE CASE LAW SUPPORTING THE CASE FOR ADMISSION OF ADDITIONAL GROUND AND ON WHICH THE LD . SR. DR REQUESTED NOT TO ADMIT THE ADDITIONAL GROUND. IN MY CONSIDERED VIEW, THE ADDITIONAL GROUND NO. 2 IS IN LEGAL AND JURISDICTIONAL NATURE A ND NEEDS TO BE ADMITTED IN THE INTEREST OF JUSTICE, IN VIEW OF THE HONBLE SU PREME COURT DECISION IN THE CASE OF NTPC 229 ITR 383 (SC). HENCE, I ADMIT THE SAME AND ONLY DECIDING THE ADDITIONAL GROUND NO. 2 AS ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE. FOR THE SAKE OF CONVENIENCE, THE ADDITIONAL GRO UND NO. 2 IS AGAIN REPRODUCED AS UNDER:- THAT THE INITIATION OF PROCEEDINGS U/S. 147/148 ARE ILLEGAL AND INCOMPETENT ON ACCOUNT OF FATALLY DEFECTIVE APPROVA L U/S. 151 OF THE I.T. ACT. 6. I HAVE HEARD BOTH THE PARTIES AND CAREFULLY CONSI DERED THE CASE LAWS AND THE RELEVANT DOCUMENTS AVAILABLE ON RECORD ESPECIAL LY THE ASSESSMENT ORDER, IMPUGNED ORDER, REASONS/SATISFACTION/APPROVAL R ECORDED FOR ISSUE OF NOTICE U/S. 148 OF THE ACT PLACED IN PAPER BOOK, ESPECI ALLY PAGE NO. 4 OF THE PAPER BOOK I.E. COLUMN NO. 10, WHEREIN THE ADDL . CIT, RANGE-55, NEW DELHI GRANTED THE APPROVAL FOR ISSUING NOTICE U/S. 14 8 OF THE INCOME TAX ACT, 1961 BY MENTIONING AS UNDER:- IT IS A FIT CASE FOR ISSUE OF NOTICE U/S. 148 6.1 FURTHER ON PERUSAL OF PAGE NO. 4 I.E. COLUMN NO. 11 WHEREIN THE LD. PR. COMMISSIONER OF INCOME TAX, DELHI-19, HAS GRANTED THE APPROVAL BY MENTIONING THAT YES, AS PER FACTS / REASONS RECORDED, I AM SATISFI ED THAT IT IS A FIT CASE FOR ISSUE OF NOTICE U/S. 148 WHICH SHOWS THAT LD. 4 PR. CIT, DELHI-19, HAS ALSO NOT RECORDED PROPER SATISFA CTION AND WITHOUT APPLICATION OF MIND GAVE THE APPROVAL IN A MECHANICAL MANNER. 6.1 AFTER PERUSING THE AFORESAID REMARKS OF THE ADDL. CIT, RANGE-55, NEW DELHI AS WELL AS PR. CIT, DELHI-19, NEW DELHI, I FIND THAT THE APPROVAL GRANTED BY BOTH THE AUTHORITIES ARE MECHANICAL AND WI THOUT APPLICATION OF MIND, WHICH ARE NOT VALID FOR INITIATING THE REASSESSM ENT PROCEEDINGS, BECAUSE FROM THE AFORESAID REMARKS, IT IS NOT COMING OUT AS TO WHICH MATERIAL; INFORMATION; DOCUMENTS AND WHICH OTHER ASPECTS HAVE BEEN GONE THROUGH AND EXAMINED BY THE ADDL. CIT, RANGE-55, DE LHI AS WELL AS PR. CIT, DELHI-19 FOR REACHING TO THE SATISFACTION FOR GRANTING APPROVAL. THEREAFTER, THE AO HAS MECHANICALLY ISSUED NOTICE U/S. 148 OF THE ACT. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE A ND THE CASE LAWS APPLICABLE IN THE CASE OF THE ASSESSEE, I AM OF THE CONSID ERED VIEW THAT THE REOPENING IN THE CASE OF THE ASSESSEE FOR THE ASSTT. YEAR I N DISPUTE IS BAD IN LAW AND DESERVES TO BE QUASHED. MY AFORESAID VIEW IS FO RTIFIED BY THE FOLLOWING DECISIONS INCLUDING THE ITAT, SMC, BENCH, NEW DELHI DECISION DATED 16.10.2019 IN THE CASE OF DHARMENDER KUMAR VS. ITO, WA RD 65(5), NEW DELHI DECIDED IN ITA NO. 2728/DEL/2018 RELEVANT TO A SSESSMENT YEAR 2008- 09 WHEREIN THE FOLLOWING CASE LAWS WERE FOLLOWED ON SI MILAR FACTS AND CIRCUMSTANCES OF THE CASE. 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 5 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 C IT VS. S. GOYANKA LIME & CHEMICAL LTD. REPORTED IN (2015) 6 4 TAXMANN.COM 313 (SC) ARISING OUT OF ORDER OF HONBLE HIGH 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). 6.2 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-55, NEW DELHI AND ALSO BY THE PR. CIT, DELHI-19, NEW DELHI IS A MECHANICAL AND WITHO UT APPLICATION OF MIND, WHICH IS NOT VALID FOR INITIATING THE REASSESSMENT PR OCEEDINGS ISSUE OF NOTICE U/S. 148 OF THE I.T. ACT, 1961 AND IS NOT IN ACCOR DANCE WITH SECTION 6 151 OF THE I.T. ACT, 1961, THUS, THE NOTICE ISSUED U/S. 148 OF THE ACT IS INVALID AND ACCORDINGLY THE REOPENING IN THIS CASE IS B AD IN LAW AND THEREFORE, THE SAME IS HEREBY QUASHED. ACCORDINGLY, THE LEGAL ADDITIONAL GROUND NO. 2 RAISED BY THE ASSESSEES COUNSEL IS ALLOWED. SINCE THE OTHER GROUNDS WERE NOT RAISED BY THE ASSESSEES COUNSEL, THE SAME A RE DISMISSED AS SUCH. ACCORDINGLY, THE ASSESSEES APPEAL IS PARTLY ALLOWED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED. ORDER PRONOUNCED ON 02-03-2020. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATED: 02-03-2020 SRB COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.