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TMI Blog2022 (2) TMI 1189X X X X Extracts X X X X X X X X Extracts X X X X ..... PER RAVISH SOOD , JM The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals)-2, Amritsar dated 02.09.2016, which in turn arises from the assessment order passed by the AO u/ss. 147/143(3) of the Income-Tax Act, 1961 (for short Act ), dated 24.02.2014 for Assessment Year 2010-11. The assessee has assailed the impugned order on the following grounds before us: 1. That the assessment order as well as the order of Learned CIT(A), both are against the facts of the case and are untenable under the law. 2. That no reasonable opportunity of being heard was allowed by the A.O. before passing the order. As such, the assessment order is bad in law and is liable to be cancelled. Again, the worthy CIT(A) has grossly erred in confirming the order of the AO. 3. That the authorities below did not appreciate that the reopening of this case u/s 148 is illegal, invalid and void abinitio and the assessment order passed is bad in the eyes of law and the same is liable to be cancelled. 4. That the reasons recorded for reopening the case are bad in law and accordingly the assessment framed is bad in law and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,00,000/-. 15. That the authorities below did not appreciate that the source of deposit in the bank was duly proved and explained with the help of the documents and there was no reason or occasion for rejecting the same and the CIT(A) should have deleted the addition. 16. Any other ground of appeal which may be urged at the time of hearing of the appeal. 2. Succinctly stated, on the basis of the information in his possession that the assessee during the year under consideration had made cash deposits of ₹ 47 lac in his Saving Bank Account No. 1110 with Punjab Gramin Bank, Taragarh, the A.O reopened the case of the assessee u/s 147 of the Act. As the assessee failed to fully substantiate the nature and source of the cash deposits in his aforesaid bank account to the satisfaction of the AO, therefore, the latter added an amount of ₹ 44 lac (out of ₹ 47 lac) to his returned income and vide his order passed u/s 147/143(3) of the Act, dated 24/02/2014 assessed his income at an amount of ₹ 44,12,657/-. 3. Aggrieved, the assessee carried the matter in appeal before the CIT(A). However, finding no infirmity in the view taken by the AO the CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld AR, that the approval was wrongly obtained, as the appropriate authority as per Section 151 of the Act for grant of such approval in the case of the assessee was the Joint CIT, Range-VI, Pathankot. Adverting to his claim that the approval u/s 151 of the Act was granted in a mechanical manner and, without any application of mind, the ld AR had drawn our attention to the approval so granted in the case of the assessee (Page 74 to 75 of APB). It was submitted by the ld AR, that the approving authority had merely by way of an idle formality as regards recording of his satisfaction on the reasons recorded by the AO for reopening the case of the assessee, had stated Yes . Backed by his aforesaid contention, it was submitted by the ld AR, that there was clear non-application of mind by the approving authority, i.e., the Additional Commissioner of Income-tax, Range-VI, Pathankot, who had granted the approval in a mechanical manner and without application of mind. It was submitted by the ld AR that in a host of cases where the sanctioning authority had granted approval by merely scribbling Yes instead of giving any cogent reason qua his satisfaction on the reasons recorded by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. In so far the claim of the ld AR, that the AO had in the body of the reasons to believe stated that the approval u/s 151 of the Act was to be obtained from the Commissioner of Income-tax (OSD), Range-VI, Pathankot, while for the same as per the form of approval was obtained from the Additional CIT, Range-VI, Pathankot is concerned, we are of the considered view, that the said assertion of the ld AR is based on misconceived and half baked facts. As stated by the Ld DR, and rightly so, as the Commissioner of Income-tax (OSD), Range-VI, Pathankot was at the relevant point of time holding the charge as that of the Additional CIT, Range-VI, Pathankot, therefore, it was incorrect on the part of the ld AR to claim that the AO had obtained the approval from an authority different from that as stated in the body of the reasons to believe . We, thus, finding no substance in the aforesaid claim of the ld AR are constrained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecified for granting of approval u/s 151 of the Act remain under a statutory obligation of clearly applying their mind on the reasons to believe recorded by the AO and, only after being satisfied that it is a fit case for issuance of notice u/s 148, approve the same. In fact, the approving authority in discharge of his aforesaid statutory duty is obligated to record his satisfaction as regards the reasons recorded by the AO for reopening the case of the assessee, in a manner, which would reveal that as per him it is a fit case for issuance of notice u/s 148 of the Act. In our considered view, mere scribbling of Yes by the approving authority can by no means suffice the statutory obligation cast upon him for granting approval after due application of mind for issuance of notice u/s 148 of the Act by the AO, because, if that be so, then, the said statutory check on the part of the superior authorities would be rendered as mere a idle formality, nugatory or in fact nothing better than an eye wash, which would beyond any doubt defeat the very purpose for which the said supervisory jurisdiction of the superior authorities had been made available on the statute by the legislature. Ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act and for obtaining the approval of the Ld. JCIT, it has been mentioned in column no. 11 as under: Yes it is approved for 148 action Sd/- (Umesh Takyar) Joint Commissioner of Income Tax Range-1, Jalandhar From the aforesaid approval it is clear that the JCIT, Range-1, Jalandhar recorded the satisfaction in a mechanical manner without application of mind. He accorded the sanction for issuing notice under section 148 of the Act in a mechanical manner. 14.1 On a similar issue the Hon'ble Guwahati High Court in the case of Ladhuram Laxmi narayan Vs. ITO, Additional 102 ITR 595 (supra) held as under: 22. Sub-section (2) of Section 151 requires that before issuing a notice under Section 148, the Commissioner must be satisfied on the reasons recorded by the Income-tax Officer that it is a fit case for the issue of such notice. The submission of the learned counsel is that in the instant case there was no real satisfaction of the Commissioner or in other words there could not be satisfaction of the Commissioner as contemplated under Subsection (2) in the facts and circumstances of the case. In the column of the report whether the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Karnal 14.2 From the aforesaid approval, it is clear that the Ld. Pr. CIT recorded satisfaction in the mechanical manner, without application of mind to accord sanction for issuing notice under section 148 of the Act. On an identical issue the Hon'ble M.P. High Court in the case of CIT Jabalpur Vs. S. Goyanka Lime Chemical Ltd. reported at (2015) 56 Taxmann.com 390 by following its own decision in the case of Arjun Singh Vs. ADIT (2000) 246 ITR 363 (M.P) held as under: 7. We have considered the rival contentions and we find that while according sanction, the Joint Commissioner, Income Tax has only recorded so Yes, I am satisfied . In the case of Arjun Singh (supra), the same question has been considered by a Coordinate Bench of this Court and the following principles are laid down:- The Commissioner acted, of course, mechanically in order to discharge is statutory obligation properly in the matter of recording sanction as he merely wrote on the format Yes, 1 am satisfied which indicates as if he was to sign only on the dotted line. Even otherwise also, the exercise is shown to have been performed in less than 24 hours of time which also goes to indicate t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other grounds raised by the assessee on merit. 13.1 Since the facts of the present case are identical to the facts involved in the aforesaid referred to case of Shri Satnam Singh, Jalandhar Vs. ITO, Ward-1(4), Jalandhar in ITA No. 579/ASR/2019 for the A.Y. 2013-14, so respectfully following the aforesaid referred to order dt. 29/06/2021 the reopening of the assessment under section 147 of the Act by issuing the notice under section 148 of the Act is quashed. Since we have decided the legal issue in favour of the assessee therefore no finding is given on the other grounds raised by the assessee on merit. Also, we find that a similar view had been taken by the ITAT, Chandigarh Bench in the case of Shri. Tek Chand Vs. The ITO, Ward-2, Karnal, ITA No. 255/Chd/2020, dated 15.03.2021. In the said case the approving authority, i.e., Principal CIT, Karnal had granted the approval for issuance of notice u/s 147 of the Act, as under:- Yes, satisfied, it is a fit case for issue of notice under section 148 -Sd/- Pr. CIT, Karnal The Tribunal by drawing support from the judgments of the Hon ble High Court of Madhya Pradesh in case of CIT Vs. S. Goyanka Lime ..... 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