SANJAY KUMAR SINGH,DELHI V. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-II, NOIDA, NOIDA

ITA 1878/DEL/2024

AI Insights

The case involves Sanjay Kumar Singh, the appellant, who challenged the reassessment order passed by the Assistant Commissioner of Income Tax, Central Circle-II, Noida, for the Assessment Year 2016-17. The reassessment was based on the discovery of an investment of Rs. 63,00,000 in a property, which was not disclosed in the original return of income. The Assessing Officer (A.O.) issued a notice under section 148 of the Income Tax Act, 1961, and made an addition of Rs. 58,00,000 to the assessee's income. The Commissioner of Income Tax (Appeals) dismissed the assessee's appeal, leading to the filing of the current appeal before the Tribunal. The primary legal contention was the validity of the jurisdiction assumed under section 147 of the Act, particularly the manner of approval under section 151 for reopening the assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312925 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2016-2017
• Other Referred Cases: CIT Vs. S. Goyenka Lime and Chemicals Ltd, PCIT Vs. NC Cables Ltd
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAHIL KUMAR BANSAL
• Assessee Lawyers: RAGINI HANDA; . AJAY
• Keywords: Reassessment proceedings; Competent authority
• Section: 147; 148; 144; 2

Judgement Text

"1 ITA No. 1878/Del/2024 Sanjay Kumar Singh Vs. ACIT IN THE INCOME TAX APPELLATE TRIBUNAL DELHI (DELHI BENCH ‘G’ NEW DELHI) BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SH. YOGESH KUMAR U.S., JUDICIAL MEMBER ITA No. 1878/Del/2024 (A.Y. 2016-17) Sanjay Kumar Singh House No. 135, Gali No. 10, Extension-2C, Nangloi, New Delhi PAN: AGCPS0974M Vs. Assistant Commissioner of Income Tax, Central Circle-II 2nd Floor, ARTO Complex, Sector-33, Noida, Uttar Pradesh Appellant Respondent Assessee by Ms. Ragini Handa, Advocate &Sh. Ajay Wadhwa, Advocate. Revenue by Sh. Sahil Kumar Bansal, Sr. DR Date of Hearing 30/04/2025 Date of Pronouncement 30/04/2025 ORDER PER YOGESH KUMAR, U.S. JM: This appeal is filed by the Assessee against the order of the Commissioner of Income Tax (Appeals)-3, Noida (‘Ld. CIT(A)’ for short) dated 26/02/2024 for the Assessment Year 2016-17. 2. Brief facts of the case are that, the Assessee filed return of income declaring total income at Rs. 3,36,880/-. During the assessment proceedings, it was found that the Assessee has invested Rs.63,00,000/- in Plot No. G-45, Laxmi Park, Nangloi, main Najafgarh Road, Nangloi, New Delhi. The A.O. recorded the satisfaction and a notice u/s 148 of the Income Tax Act, 1961 (‘Act’ for short) was also issued to the Assessee. An assessment order came to passed u/s 144 2 ITA No. 1878/Del/2024 Sanjay Kumar Singh Vs. ACIT r.w. Section 147 vide order dated 28/03/2022 by making an addition of Rs. 58,00,000/- as the Assessee failed to file any explanation. Aggrieved by the assessment order dated 28/03/2022, the Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 26/02/2024, dismissed the Appeal filed by the Assessee. As against the order of the Ld. CIT(A), the Assessee preferred the present Appeal. 3. Though the Assessee has raised several grounds challenging the validity of assumption of jurisdiction u/s 147 of the Act, in correct recording of reasons together with merits and also argued vehemently on the recording of incorrect reasons, we deem it fit to first address the assumption of jurisdiction u/s 147 of the Act. 4. We have heard the rival submissions and perused the material available on record. In the present case, a consolidated approval has been granted by the competent authority u/s 151 of the Act for reopening the assessment. It can been seen from the approval dated 25-26/03/2021issued by Addl.Commissioner of Income Tax, produced at Page No.8 of the Assessee’s Paper Book, a consolidated approval for multiple Assesseeswas issued for several Assessment Years in total 15 Assessment Years. The said consolidated approval states ‘duly approved after recording satisfaction u/s 151 r.w.148 of the Act’. There is not even mentioning of ‘satisfied’. Such approval granted u/s 151 of 3 ITA No. 1878/Del/2024 Sanjay Kumar Singh Vs. ACIT the Act was held to be approval granted without application of mind and construed as mechanical by the Hon’ble Madhya Pradesh High Court in the case of CIT Vs. S. Goyenka Lime and Chemicals Ltd reported in 56 taxmann.com 390 (MP HC). 5. The Special Leave Petition (SLP) filed by the revenue against the order of Hon'ble High Court of Madhya Prdadesh in the case of S. Goyenka Lime and Chemicals Ltd (supra) has been dismissed by the Hon'ble Supreme Court reported in 64 taxmann.com 313. Further, we find that the Hon’ble Jurisdictional High court in the case of PCIT Vs. NC Cables Ltd reported in 391 ITR 11 (Del) had also laid down the similar law, wherein, the approving authority had merely stated “approved” in the proforma while granting approval in terms of section 151 of the Act. This approval was held by the Hon’ble Jurisdictional High court to be a mechanical approval. The relevant observation of the Hon’ble Jurisdictional High Court in this regard are reproduced herein:- 11. Section 151 of the Act clearly stipulates that the CIT (A), who is the competent authority to authorize the reassessment notice, has to apply his mind and form an opinion. The mere appending of the expression 'approved' says nothing. It is not as if the CIT (A) has to record elaborate reasons for agreeing with the noting put up. At the same time, satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner. In the present case, the exercise appears to have been ritualistic and formal rather than meaningful, which is the rationale for the safeguard of an approval by a higher ranking officer. For these reasons, the Court is satisfied that the findings by the ITAT cannot be disturbed. 12. The substantial questions of law framed are answered in favour of the assessee and against the Revenue. The appeal is dismissed.” 4 ITA No. 1878/Del/2024 Sanjay Kumar Singh Vs. ACIT 6. Respectfully following the aforesaid decisions, we hold that the reopening has been made in the instant case by not taking approval u/s 151 of the Act from the competent authority in the manner known to law. Accordingly, the entire reassessment proceedings are hereby quashed. Hence, one of the legal grounds challenging the validity of assumption of jurisdiction u/s 147 of the Act is allowed in the above mentioned terms and quashed thereassessment, the other legal and other grounds raised by the Assessee on merits need not be adjudicated and they are left open. 7. In the result, the appeal of the Assesseeis allowed. Order pronounced in the open court on 30th April , 2025 Sd/- Sd/- (M. BALAGANESH) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 30.04.2025 R.N, Sr.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI 5 ITA No. 1878/Del/2024 Sanjay Kumar Singh Vs. ACIT "