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TMI Blog2021 (4) TMI 739X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment proceedings, the Assessing Officer asked the assessee to explain the identity and creditworthiness of the loan creditor and genuineness of the transaction. Rejecting the various explanation given by the assessee and rejecting the objections of the assessee to such reopening of assessment for non-issue of notice u/s 148, the Assessing Officer completed the assessment u/s 147/143(3) of the Act, determining the total income of the assessee at Rs. 31,02,400/-, wherein, he made addition of Rs. 30 lakhs u/s 68 of the Act and further an amount of Rs. 60,000/- being unexplained expenditure incurred for obtaining the accommodation entries u/s 69C of the Act. 3. Before the learned CIT(A), the assessee apart from challenging the addition on merit, challenged the validity of reopening of assessment. However, the learned CIT(A) was also not satisfied with the arguments advanced by the assessee and upheld the validity of reopening of assessment proceedings as well as on the merit. 4. Aggrieved with such order of the learned CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds of appeal:- 1. Because, the order of learned lower authority is bad in law & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was served through affixture without resorting to service by post etc., the lower authorities have upheld the validity of service of notice. The learned counsel for the assessee referring to section 282 read with service rules from 9 to 17/20 of order 'V' under CPC, 1908, submitted that when the affixture is admittedly after working hours and without identification of place/witness, the proceedings u/s 147/148 are void ab initio. The learned counsel for the assessee referring to various pages of paper book submitted that on 31st March, the Assessing Officer recorded the reasons, send the reasons for approval, obtained approval of the Addl. CIT on the very same date and thereafter issued notice, ordered the notice server and ITI to affix the notice etc, are not practically possible. Referring to the order of the Assessing Officer holding that service by affixture is sufficient and no need to serve by post etc. and the order of the learned CIT(A) holding that since the notice is issued on the last day and therefore, could not be sent through post and therefore, service by affixture on 31.03.2015 is valid, he submitted that in view of the following decisions, such action of the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome tax return filed on 27.09.2008 was available till 30.09.2009. This shows that the Assessing Officer was not convinced about the creditability of said information and chose not to take any action. He submitted that this information is not new and is available at the time of original assessment. There is no material linking the assessee with Mr. Tarun Goyal who admittedly never invoked the name of the assessee about any accommodation amount. He submitted that the letter dated 09.03.2015/23.03.2015 is without any approval u/s 133(6) of the Act and was seeking details about an accommodation entry of Rs. 35/30 lakhs for which adjournment was allowed on 06.04.2015, but reasons dated 31.03.2015 is recorded for non-compliance of the said letter. He submitted that there is neither any 'reason to believe' nor there is credible material/live link with Assessing Officer and at the most he acted on borrowed satisfaction. Further, the lower authorities have given the approval in a mechanical manner. Referring to the following decisions, he submitted that when the approval has been given in a menchanical manner, such reassessment proceedings are invalid. i. ESHA STRIPS PVT. LTD. V. ITO (ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent proceedings. Referring to the decision of Hon'ble Supreme Court in the case of Raymond Woollen Mills Ltd. vs ITO & Ors [236 ITR 34](SC), he submitted that the Hon'ble Supreme Court has held that in determining whether commencement of reassessment proceedings was valid it has only to be seen whether there was prima facie some material on the basis of which the department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. Relying on various decision as mentioned by learned CIT(A), he submitted that the reopening of the assessment was validly made and therefore, the order of the learned CIT(A) on this issue should be upheld. 11. So far as the arguments of the learned counsel for the assessee that notice was not served on the assessee is concerned, he submitted that the said notice was served through affixture which is a valid mode of service and assessee should not raise any objection on this issue. So far as the merit of the addition is concerned, the learned DR submitted that the assessee has failed to prove the identity and creditworthiness of the share applicant and the genuineness of the transactions in terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorize 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." 14.1. I find the Hon'ble Madhya Pradesh High Court in the case of CIT vs. S. Goyanka Lime & Chemicals Ltd. reported in 231 taxmann 73 (MP) has held that where the Joint Commissioner recorded satisfaction in a mechanical manner and without application of mind to accord sanction for issuing notice under section 148 of the Act, reopening of assessment was invalid. Similar view has been taken by the Hon'ble Delhi High Court in the case of Yum Restaurant Asia Pte Ltd. vs DCIT reported in 99 Taxmann.com 423 (Del). Since, the Addl. CIT in the instant case has given approval in a mechanical manner without independent application of mind, therefore, such approval giv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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