9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (12) TMI 756 - AT - Income TaxReopening of assessment u/s 147 - application of mind by concerned sanctioning authority u/s Section 151 - HELD THAT - In the present case the approving authority has given approval to the reopening of assessment in a mechanical manner without due application of mind by mentioning only that ON THE BASIS OF A ABOVE, I AM SATISFIED , in the Reasons for Initiating Proceedings u/s. 147 and For obtaining the Approval of the Addl. Commissioner of Income Tax, Range-23, New Delhi, a copy thereof is placed at page no. 1 of the Paper Book, and therefore, the legal issue in dispute is squarely covered by the aforesaid finding of the Tribunal, hence, respectfully following the aforesaid precedent i.e. Gopal Chand Manudhra and Sons; Damyanti Mundhra; Ramdev Mundhra; Shriya Devi Mundhra and Gopal Chand Mundhra vs. ITO, Wards 55(5), New Delhi decided 2019 (8) TMI 1121 - ITAT DELHI respectively relevant to assessment year 2011-12, the reassessment is hereby quashed - Decided in favour of assessee.
Issues Involved:
1. Validity of the notice issued under Section 148 of the Income Tax Act. 2. Validity of the approval granted by the Additional CIT under Section 151 of the Income Tax Act. 3. The correctness of the addition of ?10,35,000 made by the AO. 4. The correctness of the enhancement of the addition by ?12,24,000 by the CIT(A). 5. Alleged procedural lapses by the CIT(A) in enhancing the addition. Issue-wise Detailed Analysis: 1. Validity of the notice issued under Section 148 of the Income Tax Act: The appellant argued that the AO erred in issuing the notice under Section 148 without a valid reason to believe that income had escaped assessment. It was contended that the notice was issued without jurisdiction. The Tribunal found that the reasons recorded for reopening the assessment were mechanical and lacked independent application of mind. The approval for issuing the notice was given in a stereotyped manner, merely stating "ON THE BASIS OF 'A' ABOVE, I AM SATISFIED," which indicated a lack of proper satisfaction and application of mind by the approving authority. Consequently, the reassessment proceedings were quashed. 2. Validity of the approval granted by the Additional CIT under Section 151 of the Income Tax Act: The appellant contended that the approval granted by the Additional CIT under Section 151 was not competent and was given mechanically without proper application of mind. The Tribunal examined the approval process and found that the Additional CIT's approval was indeed mechanical and lacked due application of mind, as it merely stated "ON THE BASIS OF 'A' ABOVE, I AM SATISFIED." This mechanical approval rendered the reassessment proceedings unsustainable in law. The Tribunal relied on several precedents, including decisions from the Hon'ble Supreme Court and the Hon'ble Delhi High Court, which emphasized that mechanical approval without proper application of mind invalidates the reassessment proceedings. 3. The correctness of the addition of ?10,35,000 made by the AO: The appellant argued that the CIT(A) erred in confirming the addition of ?10,35,000 made by the AO on account of cash deposits in the bank account, ignoring the submissions and documents filed by the appellant. However, since the Tribunal quashed the reassessment proceedings on legal grounds, the merit of this addition was not adjudicated, rendering this issue academic in nature. 4. The correctness of the enhancement of the addition by ?12,24,000 by the CIT(A): The appellant contended that the CIT(A) erred in enhancing the addition by ?12,24,000 on account of cash deposits in the bank account. Similar to the previous issue, the Tribunal did not adjudicate on the merit of this enhancement due to the quashing of the reassessment proceedings on legal grounds. 5. Alleged procedural lapses by the CIT(A) in enhancing the addition: The appellant argued that the CIT(A) did not follow the proper procedure in enhancing the addition. However, this issue was not specifically addressed by the Tribunal, as the primary focus was on the validity of the reassessment proceedings. Given that the reassessment proceedings were quashed, the procedural lapses in enhancing the addition became moot. Conclusion: The Tribunal quashed the reassessment proceedings on the grounds that the approval granted by the Additional CIT under Section 151 was mechanical and lacked proper application of mind. Consequently, the notice issued under Section 148 was deemed invalid. The Tribunal did not adjudicate the merits of the additions made by the AO and enhanced by the CIT(A) due to the quashing of the reassessment proceedings. The appeal filed by the assessee was allowed, and the reassessment proceedings were quashed.
|
