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TMI Blog2018 (7) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... on thereon. See case of Shri Ghanshyam [2018 (7) TMI 143 - ITAT AGRA] Also In ‘Chhugamal Rajpal vs. S.P. Chaliha’ (1971 (1) TMI 9 - SUPREME COURT), it has been held that where the Commissioner, while granting the sanction just noted the word “Yes” and affixed his signature thereunder, he had only mechanically accorded permission, and that the important safe-guards provided in section 151 were lightly treated. Thus the approval granted by the Pr. CIT in the present case, is also found to be unsustainable in law and the same is quashed alongwith all proceedings pursuant thereto - Decided in favour of assessee. - I.T.A Nos.409 And 419/Agra/2017 - - - Dated:- 3-7-2018 - SHRI A. D. JAIN, JUDICIAL MEMBER For The Assessee : Shri M. M. Agarwal, AR. For The Revenue: Shri Waseem Arshad, Sr.DR. ORDER ITA No.409/Agra/2017 This is assessee s appeal for assessment year 2009-10, taking the following grounds: 1. Because on due consideration of the facts, circumstances of the case, submissions made before him and cited precedents, learned CIT (Appeals) has grossly erred in upholding the validity of initiation of proceedings under section 148 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ari Ram Gupta vs. ITO , ITA No.5111/Del/2013. 4. Tara Alloys Ltd. Vs. ITO , in ITA No.2421/Del/2017. 6. On the other hand, the ld. DR has placed strong reliance on the approval granted by the Pr. CIT. The following decisions have been relied on: i. S. Narayanappa vs. CIT , 63 ITR 219 (SC). ii. Chhugamal Rajpal vs. S.P. Chaliha , 79 ITR 603 (SC). iii. CIT vs. M/s G.S. Tiwari and Co. , 38 taxman.com 259 (All). iv. M/s Ginni Filaments vs. CIT , Writ Tax No. 1402 of 2004 (All. H.C.) v. Sushrut Institute of Plastic Surgery vs. Dy. CIT , Misc. Bench No 219 of 2014 (All. H.C.) vi. Sanjay Kumar Agarwal, HUF vs. DCIT , ITA No.290/Agra/2010 (ITAT-Agra). vii. ITO vs. Purushottam Das Bangur , 224 ITR 362 (SC). viii. Anil Kumar Singhal vs. ITO , 33 taxman. Com 434 (Agra Trib.) (SMC Bench). ix. Abdul Majid vs. CIT , 281 ITR 366 (All). 7. Heard. The approval has been granted by observing thus: Yes 8. Question is whether this approval is in accordance with law. 9. The matter in dispute is directly covered by my decision in ITA No. 238/Agra/2018, for A.Y.2008-09, in Shri Ghanshyam , order dated 19/06/2018, wherein, having considered all the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d which establishes that both the authorities have not recorded proper satisfaction / approval, before issue of notice u/s. 148 of the Act. Thereafter, the AO has mechanically issued notice u/s. 148 of the Act, on the basis of information allegedly received by him from the DCIT, Central Circle, Dehradun. Keeping in view of the facts and circumstances of the present case and the case law applicable in the case of the assessee, we are of the considered view that the reopening in the case of the assessee for the asstt. Year in dispute is bad in law and deserves to be quashed. Our aforesaid view is fortified by the following decisions:- (A) Hon ble Delhi High Court in the case of Pr. CIT vs. M/s NC Cables Ltd. in ITA No. 335/2015 has held as under:- 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r was to be dismissed Held, Yes (in favour of the Assessee). 6.4 In the background of the aforesaid discussions and respectfully following the precedents, as aforesaid, we are of the considered view that proceedings initiated by invoking the provisions of section 147 of the Act by the AO and upheld by the Ld. CIT(A) are non est in law and without jurisdiction, hence, the re-assessment is quashed. Since we have already quashed the re-assessment, the other grounds have become academic and are therefore not adjudicated and accordingly, the assessee s appeal is allowed. 10. In the case of Virat Credit Holdings (P) Ltd. vs. ITO , (CO No. 57/Del/2012 in ITA No. 89/Del/2012), the ITAT, Delhi vide its order dated 09.02.2018 (PBP - 50-62) has held that:- 11. In response to aforesaid question no.13 in the prescribed proforma, Addl. CIT has written Yes. I am satisfied. No doubt, columns of reasons recorded was there and it is also mentioned in column no.12 that reasons for belief that income has escaped assessment are as per annexure enclosed but such annexure has not been produced before the Bench for perusal. 12. Apparently, from the approval recorded and w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the conclusion that it is a fit case for the issue of a notice under section 148. 16. The Hon ble Court concluded that We are also of the opinion that the Commissioner has mechanically accorded permission. He did not himself record that he was satisfied that this was a fit case for the issue of a notice under section 148. To question No. 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 word Yes and affixed his signature there-under. 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 these provisions as of little importance. They have substituted the form for the substance . 17. In CIT vs. M/s G.S. Tiwari and Co. , 38 taxman.com 259 (All), it was held by the Hon ble jurisdictional High Court that under the garb of review, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21. In ITO vs. Purushottam Das Bangur , 224 ITR 362 (SC), re-assessment proceedings were upheld where the Assessee claimed that he had incurred capital loss on sale of shares held in a company, which was based on official quotation at Calcutta Stock Exchange and the same was allowed in original assessment. Subsequently, the ITO received a letter from the Directorate of Investigation, giving detailed particulars collected from the Bombay Stock Exchange, which revealed that the quotation appearing at Calcutta Stock Exchange was a result of manipulated transaction. On the very next day of receipt of the letter, the ITO issued notice under section 147(b). The Hon ble Supreme Court found that the letter from the Directorate contained definite information derived from the Bombay Stock Exchange Directory about the financial condition of Maharaja Shree Umaid Mills Ltd. during the period 1965-70, which indicated that during this period, the company had prospered and that the book value per equity share had risen from ₹ 318.55 for the year ending 31-12-1965 to ₹ 401 for the year ending 31-12-1970, that the earning per share rose from ₹ 8.37 per share to ₹ 44 per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me from taxation on the part of the AO. It is if and only if the Competent Authority, after applying his mind, is of the opinion that the AO s belief is well reasoned and bonfide, that he will accord his sanction thereon. 26. In Narayanappa (supra), it has been held that the stage for obtaining the sanction of the Competent Authority are administrative in character and are not quasi-judicial . However, in Chhugamal Rajpal vs. S.P. Chaliha , 79 ITR 603 (SC) (supra), it has been held that where the Commissioner, while granting the sanction just noted the word Yes and affixed his signature thereunder, he had only mechanically accorded permission, and that the important safe-guards provided in section 151 were lightly treated. 27. Narayanappa (supra) is dated 27.09.1966, whereas Chhugamal (supra) was handed down on 21.01.1971. Both these judgments have been rendered by co-equal Benches of the Hon ble Apex Court. Now, it is well settled that in such a situation, the judgment of the Hon ble Supreme Court, which is later in point of time has to be followed. 28. Thus, in keeping with the position of law on the issue, as discussed hereinabove, the approval in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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