SPIRIT GLOBAL CONSTRUCTIONS PRIVATE LIMITED,NEW DELHI V. ACIT CENTRAL CIRCLE-15, NEW DELHI

ITA 3821/DEL/2024

AI Insights

The case involves M/s. Spirit Global Constructions Pvt. Ltd., which appealed against the re-assessment order passed by the ACIT, Central Circle-15, Delhi, for the assessment year 2012-13. The original assessment was completed under section 143(3) of the Income Tax Act, 1961, accepting the income declared by the assessee. However, the case was later reopened under section 148 based on information from the Investigation Wing, leading to the addition of INR 3.50 crores as unexplained credits. The assessee contested the reopening and the subsequent re-assessment, arguing that the reopening was unlawful and the additions were made without proper investigation or application of mind. The Tribunal, after examining the facts and legal provisions, ruled in favor of the assessee, quashing the re-assessment proceedings.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 777692 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 22-08-2024
• Other Referred Cases: CIT vs. S. Goyanka Lime & Chemical Ltd., CIT vs N.C. Cables Ltd., SBC Minerals Pvt.Ltd. vs ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMAR JAISWAL
• Assessee Lawyers: AMITOSH MOITRA; ROLI CHAUBEY
• Keywords: Reassessment proceedings; Question of law; Unexplained cash credit; Reopening of assessment; Principle of natural justice; Search and seizure; Accommodation entries; Block assessment; Assessment record; Competent authority; Bogus
• Section: 147; 148; 143(3); 68; 133(6)

Judgement Text

"ITA No.3821/Del/2024 Page | 1 THE INCOME TAX APPELLATE TRIBUNAL DELHI “G” BENCH: NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.3821/Del/2024 [Assessment Year : 2012-13] M/s. Spirit Global Constructions Pvt.Ltd., Plot No.1, LSC, Site No.37- 38, Morland, Kalkaji, New Delhi-110019. PAN-AAICS2757B vs ACIT, Central Circle-15, Delhi APPELLANT RESPONDENT Appellant by Shri Amitosh Moitra, CA & Roli Chaubey, CA Respondent by Shri Dheeraj Kumar Jaiswal, Sr.DR Date of Hearing 03.07.2025 Date of Pronouncement 30.09.2025 ORDER PER MANISH AGARWAL, AM : The captioned appeal is filed by assessee against the order dated 24.06.2024 passed by Ld. Commissioner of Income Tax (A)- 26, New Delhi [“Ld.CIT(A)”] in Appeal No.10187/2019-20 u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of assessment order dated 28.03.2014 passed u/s 143(3) of the Act pertaining to assessment year 2012-13. 2. Brief facts of the case are that assessee is a Private Limited Company, engaged in the business of real estate. The return of income was filed on 27.09.2012, declaring loss of INR Printed from counselvise.com ITA No.3821/Del/2024 Page | 2 2,91,85,777/-. The assessment was completed u/s 143(3) in terms of order dated 28.03.2014 passed u/s 143(3) of the Act wherein income so declared was accepted. Thereafter, case of the assessee was re-opened in terms of the notice issued u/s 148 of the Act dated 31.03.2019 and subsequently, re-assessment order was passed on 24.12.2019 by making addition of INR 3.50 crores received from M/s. Anamika Steel Traders Pvt. Ltd. of INR 1.75 crores and M/s. Gajraj Steel Merchants Pvt.Ltd. of INR 1.75 crores each by holding the same as unexplained credits. 3. Against the said order, the assessee preferred appeal before Ld.CIT(A) who vide impugned order dated 24.06.2024 has confirmed the order passed by AO. Aggrieved, the assessee is in appeal before the Tribunal by taking following grounds of appeal:- A. u/s 147 Unlawful Reopening and conduct of Assessment Proceedings i. The re-assessment proceedings, and the confirmation thereof, are invalid and bad in law as the re-opening of the case has been made unlawfully and in contravention of the provisions of law in this regard, in light of the facts of the case. ii. The assessment proceedings, and the confirmation thereof, are bad in law as, contrary to the rulings of courts of the land, the case has been reopened without due investigation and fresh application of mind by the LAO to information received from the Investigation Wing, Kolkata. iii. The re-opening of the case and the assessment proceedings, and the confirmation of the two, are invalid and unlawful as they are based on Reasons for Reopening that were factually incorrect when first framed by the LAO and approved by the higher authorities, and as such Reasons for Reopening have been augmented and completed during the course of the re-assessment proceedings by flippantly passing off the wrong statements therein as 'typographical errors', which fact strikes at the root of the LAO's jurisdiction to re-open the case. Printed from counselvise.com ITA No.3821/Del/2024 Page | 3 iv. The re-opening of the case and the assessment proceedings, and the confirmation of the two, are invalid and unlawful as they have been done without confronting the assessee with all the information available with which was used against the assessee and consequently the assessee was denied the opportunity of rebutting the same. v. The assessment proceedings, and the confirmation thereof, lack the authority of law as the case has been re-opened in complete contravention of the first proviso to Section 147, and the LAO has failed to adduce any reasons for the non-applicability of such proviso to the facts present in the case. vi. The assessment proceedings, and the confirmation thereof, are bad in law as the case has been reopened without adhering to the process laid down under the law for such reopening, the glaring breaches in which make the re-opening time barred by law. vii. The assessment proceedings, and the confirmation thereof, are bad in law as the assessment has been reopened and conducted through lackadaisically framed notices, remand reports and orders that display abject lack of application of mind, perfunctory gathering of information and complete high handedness of the LAO and the Hon'be CIT(A), making the assessment and its re-opening, and the confirmation of the two, injudicious and inequitable, and thus invalid. viii. The reopening of the case and the consequent assessment proceedings are bad in law, being inequitable and injudicious, as they have been carried out without considering the Information already available on the record of the assessee available with the Deptt. ix. The reopening of the case is bad in law, being inequitable and injudicious, as the same has been done without rejecting the objections of the assessee against such re-opening through a speaking order and by stating falsehoods in such order. x. The assessment is bad in law, being inequitable and injudicious, as the same has been concluded through a non-speaking order. xi. The assessment is bad in law, being inequitable and injudicious, as the same has been passed by the LAO in haste, by Ignoring the request for time and by deliberately pre-dating his order and the CIT(A) has unjustly struck down this argument of the assessee on incorrect facts and conclusions. xii. The assessment proceedings, and the confirmation thereof, are bad in law as, the case has been reopened and concluded by completely ignoring, Incorrectly quoting and/or deliberately misconstruing the submissions made by the assessee before the re-opening and during the course of the re-assessment proceedings. Printed from counselvise.com ITA No.3821/Del/2024 Page | 4 xiii. The LAO has erred in reopening the case, and the Hon'ble CIT(A) has erred in confirming such re-opening, as in doing so, they have both gone against the principles of natural justice. B. u/s 68 Addition of Rs. 3,50,00,000/- i. The addition has been made and confirmed by making baseless and incorrect conclusions and without considering the information, evidences and documents produced and explanations provided by the assessee and those already available with the Department on the record of the assessee, and neither has the LAO adduced any cogent reasons for disbelieving the authenticity of the same. ii. The addition has been made on the basis of an incorrect interpretation and application of the provisions of the Act and by Ignoring the intent and purposes of the provisions of law in this regard, as they stood for the financial year under question. iii. The assessment made is unethical and unlawful as it has been done with malafide Intent by intentionally ignoring the reply of the assessee filed on 26/12/2019. iv. The assessment made and confirmed is invalid, bad in law and contrary to the rulings of the courts due to the glaring absence of a live link between the information available with the Investigation Wing and the addition made and confirmed in the hands of the assessee. v. The assessment made and confirmed is bad in law, being injudicious, as, contrary to the rulings laid down by the courts in this regard and in contravention of the principles of natural justice, it has been made by discrediting the assessee because the notices failed to respond to the summons issued to them. vi. The addition has been made and confirmed even though the assessee has duly discharged its onus of proving the genuineness, creditworthiness and the identity of its lenders. vii. The assessment made and confirmed is bad in law, and hence invalid as the assessee had not been confronted with the complete information being used against it during the assessment stage. viii. The LAO has erred in making the stated additions, as in doing so, he has gone against the principles of natural justice.” 4. Ground of appeal Nos. 1 (i to xiii) raised by the assessee are with respect to the re-opening of the assessment and completion of re-assessment proceedings therefore, they are taken together for adjudication. Printed from counselvise.com ITA No.3821/Del/2024 Page | 5 5. Before us, Ld.AR for the assessee submits that the assessment was completed u/s 143(3) in terms of order dated 28.03.2014 wherein the enquires with respect to the loans given by the assessee were carried out and based on the same, the case of the assessee was completed accepting the income declared. He further submits that the assessee has received a notice u/s 133(6) on 26.03.2019 issued by the AO wherein it was stated by Ld. ACIT, Central Circle- 15, New Delhi that assessee has received credit entries of INR 3.50 crores which has not been recorded in the books of accounts. In response, a mail was sent to the AO on 29.03.2019 wherein it was requested to supply the details of entries which were alleged as not recorded on the books of accounts. However, the AO had not supplied any such information and after recording the reasons, had issued notice u/s 148 of the Act on 31.03.2019 for re-opening the completed assessment. 6. The Ld. AR for the assessee further submits that notice so issued u/s 148 of the Act, contained PAN No. of assessee as “AAJCS2757B” as against the correct PAN of AAICS2757B. He submits that notice issued u/s 148 of the Act on 31.03.2019 for AY 2012-13 was thus issued on wrong PAN and never served to the assessee within the statutory time limit i.e. within six years from the end of the relevant AY. For this, the assessee has drew our attention to the screenshot of the Income Tax Portal taken on 04.04.2019 at 16:35:52 hours where at the window for filing the return u/s 148 is appearing “it was stated no valid notice found Printed from counselvise.com ITA No.3821/Del/2024 Page | 6 for selected AY and section selected”. He thus, submits that there was no notice us/ 148 was served on the assessee upto 31.3.2019 i.e. upto the end of six years from the end of the relevant assessment year i.e. AY 2012-13. As per ld. AR when these facts were brought to the notice of the AO in terms of the letter dated 05.04.2019, AO made the necessary corrections in PAN and thereafter, notice issued 148 starts appearing in the e-filing portal. Ld. AR for the assessee submits that when notice u/s 148 of the Act was issued on incorrect PAN, it could not be corrected subsequently. Necessary copies of the correspondence are available in the Paper Book filed by the assessee. 7. Ld.AR for the assessee further submits that from the perusal of the reasons recorded, as available in Paper Book, supplied by the AO in terms of the letter dated 03.09.2019, satisfaction is recorded with respect to the credit entry of INR 3.50 crores stated to have been received from one M/s. Anamika Steel Trading Pvt. Ltd. alleged as bogus entity. However, during re-assessment proceedings, AO has changed its stand and in terms of notice issued on 23.11.2019, it is alleged that INR 3.50 crores were received from two parties i.e. INR 1.75 crores from M/s. Anamika Steel Trading Pvt. Ltd. and INR 1.75 crores from M/s. Gajraj Steel Merchants Pvt. Ltd. He, therefore, submits that there was no application of mind at the time of recording the reasons by the AO and further no independent verification was done by the AO with respect to the information received vis-a-vis details available on Printed from counselvise.com ITA No.3821/Del/2024 Page | 7 record filed during the proceedings u/s 143(3) of the Act. He, therefore, requested that entire re-assessment proceedings based on the incorrect appreciation of facts deserves to be quashed. He further submits that all the details with respect to the loans taken were submitted before the AO during original assessment proceedings completed u/s 143(3) of the Act and therefore, no new/fresh material was available on record before issue of notice u/s 148 of the Act. More particularly, when the AO had applied his mind in the original assessment proceedings therefore, the re- assessment proceedings so initiated, deserves to be hold bad in law and consequent order passed be quashed. He prayed accordingly. 8. It is further argued that in the reasons recorded in Column No.17, while granting the approval for re-opening the Ld. PCIT observed “perused reasons satisfied fit case for 148 proceedings”. He submits that from the perusal of the observations of Ld. PCIT, it could be seen that no independent application of mind and approval was given in mechanical manner wherein Ld. PCIT simply given his approval on the reasons recorded by the AO which contains serious error of fact that no loan of INR 3.50 crores was received by the assessee from M/s. Anamika Steel Trading Pvt. Ltd. for which satisfaction was recorded of escapement of income by the AO. He thus, submits that on this score also, the proceedings initiated u/s 148 deserves to be hold as bad in law. 9. On the other hand, Ld. Sr. DR for the Revenue vehemently supports the orders of the lower authorities and submits that there Printed from counselvise.com ITA No.3821/Del/2024 Page | 8 was an information that assessee has received its unaccounted money in the shape of loans of INR 3.50 crores and this fact is not found to be incorrect as the assessee has received loan of INR 3.50 crores in the year under appeal. The necessary copies of the correspondence are available in the Paper Book filed by the assessee. Regarding incorrect PAN, he submits that, it is a typographical error which could be cured u/s 292B of the Act and the AO already corrected the same and finally, the notice u/s 148 of the Act was appearing in ITBP Portal which fact is also admitted by the assessee. He further submits that notice u/s 148 was served physically to the assessee and therefore, there is no error in the order passed u/s 147 of the Act which deserves to be upheld. 10. Heard the contentions of both parties and perused the material available on record. The assessee has raised serious deficiencies in the re-assessment proceedings initiated which are deliberated as under:- Firstly, the assessee has challenged the notice u/s 148 being issued on incorrect PAN. The notice so issued is reproduced as under:- Printed from counselvise.com ITA No.3821/Del/2024 Page | 9 From the perusal of the same, it is apparent that said notice issued on 31.03.2019 on incorrect PAN of the assessee as“AAJCS2757B” as against the correct PAN AAICS2757B. Printed from counselvise.com ITA No.3821/Del/2024 Page | 10 Further, from the perusal of the screen shot of e-filing Portal of the assessee, dated 04.04.2019, it could be seen that no such notice issued u/s 148 was appearing therefore, the assessee was not able to even file the return of income. The said screen shto as available at page 68 is reproduced as under:- From the perusal of the above, we find that upto 04.04.2019, no such notice u/s 148 is available on the ITBA Portal of the assessee therefore, it cannot be said that notice u/s 148 was served upon the assessee as per the provisions of the Act within a period of six years from the end of relevant assessment year. Secondly, arguments of the assessee is with that the recording of reasons without application of mind and in casual manner. Printed from counselvise.com ITA No.3821/Del/2024 Page | 11 11. From the perusal of the reasons recorded as available at page 71 to 73 of the Paper Book, it is found that AO has recorded his satisfaction of escapement of income of INR 3.50 crores based on the information received that company M/s. Anamika Steel Trading Pvt.Ltd. has remitted INR 3.50 crores to the assessee which was managed and controlled through a company M/s. Lavender Vincom Pvt. Ltd. from where the amounts were transferred to the account of M/s. Anamika Steel Trading Pvt. Ltd. and finally, came to the assessee. It was the allegation of Department that M/s. Lavender Vincom Pvt. Ltd. was controlled and managed by entry operator who provided the entries after charging commission and through this company, assessee has taken accommodation entries of INR 3.50 Crores which was received from M/s Anamika Steel Trading Pvt. Ltd. However, assessee submits that it had received loan of INR 1.75 crores only from M/s Anamika Steel Trading Pvt. Ltd. for which all necessary documents such as confirmation etc. were filed in terms of letter dated 26.03.2014 before the AO during the course of assessment proceedings u/s 143(3) of the Act. When the assessee has stated that fact that only 1.745 crores were received from M/s Anamika Steel Trading Pvt. Ltd., the AO modified his allegation and alleged that assessee has received INR 1.75 Crores from M/s. Anamika Steel Trading Pvt. Ltd. and balance of INR 1.75 Crores was received from M/s. Gajraj Steel Merchants Pvt. Ltd., another company managed and controlled by same entry provider. This clearly established that before recording the reasons for re-opening the assessment, AO has not made any enquiry/investigation so as Printed from counselvise.com ITA No.3821/Del/2024 Page | 12 to verify the correctness and completeness of the information, more particularly, when assessment in the instant case was already completed u/s 143(3) of the Act and necessary confirmations etc. from both the loaners, were available in the assessment records. 12. In view of these facts and in our considered opinion, we find that re-assessment proceedings initiated vide notice issued with wrong PAN and without application of mind and in mechanical manner are bad in law. 13. It is further seen that Ld. Pr.CIT while granting the approval u/s 151(2) of the Act has not applied his mind and granted the approval in mechanical manner wherein he observed “perused reasons satisfied fit case for 148 proceedings”. The Performa for approval is available at page 104 to 106 of the Paper book which is extracted hereunder for ready-reference:- Printed from counselvise.com ITA No.3821/Del/2024 Page | 13 Printed from counselvise.com ITA No.3821/Del/2024 Page | 14 Printed from counselvise.com ITA No.3821/Del/2024 Page | 15 14. The Hon’ble Supreme Court in case of CIT vs. S. Goyanka Lime & Chemical Ltd. – (2015) 64 taxmann.com 313 (SC) examined the identical issue as to according the sanction for reopening the assessment u/s 148 of the Act by merely recording “Yes. I am satisfied”. and held that reopening on the basis of mechanical sanction is invalid by making following observations :- “ Section 151, read with section 148 of the 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 assessee] Search and Seizure-Procedure for black Assessment- Search was conducted at residential and business premises of Assessee and notice for block assessment u/s. 158-BC was issued- For block period, returns were filed that were processed u/s. 143 (1)- However, notice u/s. 148 was issued by AO, on basis of certain reasons recorded- Assessee objected to same before AO, that was rejected and assessment was completed u/ss. 143(3) and 147-CIT(A) found that reason recorded by Joint Commissioner of Income Tax, for according sanction, was merely recording ‘I am Satisfied’-Action for sanction was alleged to be without application of mind and to be done in mechanical manner-Held, while according sanction, Joint Commissioner, Income Tax only recorded “Yes, I am satisfied”-Mechanical way of recording satisfaction by Joint Commissioner, that accorded sanction for issuing notice u/s. 147, was clearly unsustainable-On such consideration, both Appellate authorities interfered into matter- o error was committed warranting reconsideration-As far as explanation to S. 151, brought into force by Finance Act, 2008 was concerned, same only pertained to issuance of notice and not with regard to manner of recording satisfaction-Amended provision did not help Revenue-No question of law involved in matter, that warranted reconsideration- Revenue’s Appeals dismissed.” 15. The Hon'ble Delhi High Court in the case of CIT vs N.C. Cables Ltd. (supra) has observed as under:- Printed from counselvise.com ITA No.3821/Del/2024 Page | 16 \"Reassessment-Issuance of Notice-Sanction for issue of Notice- Assessee had in its return for A Y 2001-02 claimed that sum of Rs. 1 Crore was received towards share application amounts and a further sum of Thirty Five Lakhs was credited to it as an advance towards loan-Original assessment was completed u/s 143(3)- However, pursuant to reassessment notice, which was dropped due to technical reasons, and later notice was issued and assessments were taken up afresh-After considering submissions of assessee and documents produced in reassessment proceedings, AO added back a sum of Rs.1,35,00,000/- - CIT(A) held against assessee an legality of reassessment notice but allowed assessee's appeal on merits holding that AO did not conduct appropriate enquiry to conclude that share inclusion and advance received were from bogus entities-Tribunal allowed assessee's appeal on merits- Revenue appealed against appellate order on merits- Assessee's cross appeal was on correctness of reopening of assessment- Tribunal upheld, assessee's cross- objections and dismissed Revenue's appeal holding that there was no proper application of mind by concerned sanctioning authority u/s Section 151 as a pre-condition for issuing notice u/s 147/148-Held, Section 151 stipulates that CIT (A), who was competent authority to authorize reassessment notice, had to apply his mind and form opinion-Mere appending of expression 'approved' says nothing-It was not as if CIT (A) had to record elaborate reasons for agreeing with noting put up-At same time, satisfaction had to be recorded of given case which could be reflected in briefest possible manner-In present case, exercise appears to have been ritualistic and formal rather than meaningful, which was rationale for safeguard of approval by higher ranking officer-Revenue's appeal dismissed.\" 16. The Hon’ble Delhi High Court in the case of SBC Minerals Pvt.Ltd. vs ACIT [2025] 475 ITR 360 (Del.) has held as under:- 10. “Before considering the merits of the contentions of the parties, it would be apposite to examine the relevant legal framework. 11. Section 151 of the Act, as it stood prior to the substitution by Act 13 of 2001 is reproduced hereunder: \"151. Sanction for issue of notice.-(1) No notice shall be issued under section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice. (2) In a case other than a case falling under sub-section (1), no notice shall be issued under section 148 by an Assessing Printed from counselvise.com ITA No.3821/Del/2024 Page | 17 Officer, who is below the rank of Joint 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. (3) For the purposes of sub-section (1) and sub-section (2), the Principal Chief Commissioner or the Chief Commissioner or the g Principal Commissioner or the Commissioner or the Joint Commissioner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice under section 148, need not issue such notice himself.\" 12. A plain reading of the aforesaid provision clearly indicates that the prescribed authority must be \"satisfied\", on the reasons recorded by the Assessing Officer (\"AO\"), that it is a fit case for the issuance of such notice. Thus, the satisfaction of the prescribed authority is a sine qua non for a valid approval. 13. It is trite law that the grant of approval is neither an empty formality nor a mechanical exercise. The competent authority must apply its mind independently on the basis of material placed before it before grant of sanction. 14. A perusal of the record reveals that the request for approval under section 151 of the Act in a printed format was placed before the Principal Chief Commissioner of Income-tax (\"PCCIT\") on March 20, 2023. The Principal Chief Commissioner of Income-tax granted the approval the same day. The approval accorded by the Principal Chief Commissioner of Income-tax in column 22 is extracted below: 22 Reasons for according approval/rejection by the specified authority to order under section 148A(d) and/or issuance of notice under section 148 of the Income-tax Act, 1961? Remarks: Approved under section 148A(d) as a fit case. Name: Rajat Bansal Designation :PCCIT, Delhi Date-20.03.2023 15. It is evident that the approval order is bereft of any reasons. It does not even refer to any material that may have weighed in the grant of approval. The mere appending of the word \"approved\" by the Principal Chief Commissioner of Income-tax while granting approval under section 151 to the reopening under section 148 is not enough. While the Principal Chief Commissioner of Income-tax is not required to record elaborate reasons, he has to record satisfaction after application of mind. The approval is f a safeguard and has to be meaningful and not merely ritualistic or formal. The reasons are the link between material placed on record and the conclusion reached by Printed from counselvise.com ITA No.3821/Del/2024 Page | 18 the authority in respect of an issue, since they help in discerning the manner in which the conclusion is reached by the concerned authority. Our opinion in this regard is fortified by the decision of the apex court in Union of India v. Mohan Lal Capoor. The grant of approval by the Principal Chief Commissioner of Income-tax in the printed format without any line of reason does not fulfil the requirement of section 151 of the Act. 16. We note that dealing with an identical challenge of approval having been accorded mechanically and without due application of mind had arisen for our consideration in the case of the Pr. CIT v. Pioneer Town Planners Pvt. Ltd., wherein, we had held as follows (page 361 of 465 ITR): \"13. The primary grievance raised in the instant appeal relates to the manner of recording the approval granted by the prescribed authority under section 151 of the Act for reopening of assessment proceedings as per section 148 of the Act. 17. Thus, the incidental question which emanates at this juncture is whether simply penning down 'Yes' would suffice requisite satisfaction as per section 151 of the Act. Reference can be drawn from the decision of this court in Pr. CIT v. N. C. Cables Ltd.¹, wherein, the usage of the expression 'approved was considered to be merely ritualistic and formal rather than meaningful. The relevant paragraph of the said decision reads as under (page 17 of 391 ITR): '11. Section 151 of the Act clearly stipulates that the Commissioner of Income-tax (Appeals), who is the competent authority to authorise 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 Commissioner of Income-tax (Appeals) 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 Income-tax Appellate Tribunal cannot be disturbed.' 18. Further, this court in the case of Central India Electric Supply Co. Ltd. v. ITO has taken a view that merely rubber stamping of 'Yes' would suggest that the decision was taken in a mechanical manner. Paragraph 19 of the said decision is reproduced as under (page 245 of 333 ITR): 'In respect of the first plea, if the judgments in Chhugamal Rajpal v. S. P. Chaliha, Chanchal Kumar Chatterjee v. ITO and Govinda Choudhury and Sons v. ITO are examined, the Printed from counselvise.com ITA No.3821/Del/2024 Page | 19 absence of reasons by the Assessing Officer does not exist. This is so as along with the pro-forma, reasons set out by the Assessing Officer were, in fact, given. However, in the instant case, the manner in which the proforma was stamped amounting to approval by the Board leaves much to be desired. It is a case where literally a mere stamp is affixed. It is signed by an Under Secretary underneath a stamped Yes against the column which queried as to whether the approval of the Board had been taken. Rubber stamping of underlying material is hardly a process which can get the imprimatur of this court as it suggests that the decision has been taken in a mechanical manner. Even if the reasoning set out by the Income-tax Officer was to be agreed upon, the least which is expected is that an appropriate endorsement is made in this behalf set-ting out brief reasons. Reasons are the link between the material placed on record and the conclusion reached by an authority in respect of an issue, since they help in discerning the manner in which conclusion is reached by the concerned authority. Our opinion is fortified by the decision of the apex court in Union of India v. Mohan Lal Capoor¹ wherein it was observed as under: \"27. We find considerable force in the submission made on behalf of the respondents that the 'rubber stamp' reason given mechanically for the supersession of each officer does not amount to 'reasons for the proposed supersession'. The most that could be said for the stock reason is that it is a general description of the process adopted in arriving at a conclusion. 28. If that had been done, facts on service records of officers considered by the Selection Committee would have been correlated to the conclusions reached. Reasons are the links between the materials on which certain conclusions are based and the actual conclusions. They disclose how the mind is applied to the subject-matter for a decision whether it is purely administrative or quasi-judicial. They should reveal a rational nexus between the facts considered and the conclusions reached. Only in this way can opinions or decisions recorded be shown to be manifestly just and reasonable.\" (emphasis supplied)' 19. In the case of Chhugamal Rajpal v. S. P. Chaliha³, the hon'ble Supreme Court refused to consider the affixing of signature along with the noting Yes' as valid approval and had held as under (page 608 of 79 ITR): 'Further the report submitted by him under section 151(2) does not mention any reason for coming to the conclusion that it is a fit case for the issue of a notice under section 148. We are also of the opinion that the Commissioner has mechanically accorded permission. He did not himself record that he was Printed from counselvise.com ITA No.3821/Del/2024 Page | 20 satisfied that this was a fit case for the issue of a notice under section 148. To question 8 in the report which reads \"whether the Commissioner is satisfied that it is a fit case for the issue of notice under section 148\", he just noted the b word \"yes\" and affixed his signatures thereunder. We are of the opinion that if only he had read the report carefully, he could never have come to the conclusion on the material before him that this is a fit case to issue notice under section 148. The important safeguards provided in sections 147 and 151 were lightly treated by the Income-tax Officer as well as by the Commissioner. Both of them appear to have taken the duty imposed on them under those provisions as of little importance. They have substituted the form for the substance.' 20. This court, while following Chhugamal Rajpal v. S. P. Chaliha in the case of Ess Advertising (Mauritius) S. N. C. Et Compagnie v. Asst. CIT (International Taxation), wherein, while granting the approval, the Assistant Commissioner of Income-tax has written: This is fit case for issue of notice under section 148 of the Income-tax Act, 1961. Approved, had held that the said approval would only amount to endorsement of language used in section 151 of the Act and would not reflect any independent application of mind. Thus, the same was considered to be flawed in law.” 17. In view of the above facts and by respectfully following the judgements of Hon’ble Supreme Court and Hon’ble High Court cited supra, in our considered opinion, re-opening u/s 147 of the Act of completed assessment by issue of notice u/s 148 on wrong PAN and without properly recording the reasons and no proper approval is granted by Ld. Pr. CIT after independent application of mind is bad in law and not sustainable and, therefore, notice issued u/s 148 of the Act is hereby, held as invalid and consequent re- assessment proceedings are quashed. Grounds of appeal Nos. 1 (i to xiii) raised by the assessee are accordingly, allowed. 18. Other grounds of appeal raised by the assessee taken on merits become academic, hence not adjudicated. Printed from counselvise.com ITA No.3821/Del/2024 Page | 21 19. In the result, appeal of the assessee is allowed. Order pronounced in the open Court on 30.09.2025. Sd/- Sd/- (ANUBHAV SHARMA) JUDICIAL MEMBER Date:-30.09.2025 *Amit Kumar, Sr.P.S* (MANISH AGARWAL) ACCOUNTANT MEMBER Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT 6. Guard File ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "