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TMI Blog2022 (11) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... lier part of this order since the same was referred to and included in the relevant part para 10.2 of the order of the ITAT in the case of Omkam Developers Ltd. [ 2021 (5) TMI 414 - ITAT DELHI] . It was held that this kind of defect and non-application of mind by the AO is not curable u/s. 292B of the Act. Therefore, respectfully following the judgment of Yum! Restaurants [ 2017 (9) TMI 121 - DELHI HIGH COURT] and Smt. Kalpana Shantilal Haria [ 2018 (1) TMI 195 - BOMBAY HIGH COURT] and orders of ITAT Delhi Bench in the cases of Omkam Developers Ltd. vs. ITO (supra) and Madhu Apartments P. Ltd. vs. ITO (supra), we hold that the impugned reassessment proceedings and the impugned reassessment u/s. 147/144 of the Act deserve to be quashed only on this ground.- Assessee appeal allowed. - ITA No. 5821 & 5822/Del/2017 - - - Dated:- 31-10-2022 - SHRI C. M. GARG , JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA , ACCOUNTANT MEMBER Assessee by : Shri S. K. Gupta, CA Revenue by : Shri Jeetender Chand, Sr. DR ORDER Per C. M. Garg, JM These appeals filed by the Revenue are directed against the orders dated 23.06.2017 and 06.06.2017 of the CIT(A)-30, New Delhi, relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee by way of maintaining two PAN's. Accordingly Ld. CIT(A) has erred in making the assessee a beneficiary of his own default , 4. That the appellant craves the leave to amend, modify, alter and of forgo any of the ground(s) without prejudice to each other. ITA No. 5822/Del/2017 1. The CIT(A) has erred in deciding the appeal as the Penalty order passed by the AO is in the case of the assessee having PAN AABCS8896C , name - Shree Bal Kishan Aggarwal Glass Industries Pvt. Ltd. whereas the appeal order is in the case of PAN AABCS2870C and on the name Shree Bal kishan Aggarwal Glass Industries Pvt. Ltd., whereas; as per the department data base the name against PAN AABCS 2870 C is Shri Bal Kishan Aggarwal Glass Industries Ltd. 2. The CIT(A) failed to verify whether the PAN AABCS8896C and AABCS2870C belongs to two different persons. The CIT(A) ought to have referred the matter to the AO for verification particularly in view of the fact that a person cannot have two PANs. This resulted in thereby deleting the said penalty of Rs. 69,00,300/- which was based on the addition of Rs. 2,05,00,000/- (entries taken from S.K. Jain Group of concerns) in the subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed this objection in para 6.3 at page 16 of CIT(A) order on the ground that this mistake in format is typographical human error which shall not render the reopening process invalid and same is curable u/s. 292B of IT Act. This view is contrary to the decision of the Hon'ble Bombay High Court in the case of Smt. Kalpana Shantilal Haria Vs. ACIT W.P.(L) No. 3063/2017 dated 22.12.2017 where easement proceedings were quashed on identical reason and also held that same is incurable u/s. 292B/292BB of IT Act. The jurisdictional Delhi High Court in Yum Restaurants Asia Pte. Ltd. VS. DDIT in WP(C) No. 614/2014 dated 31.08.2017 has also considered the glaring mistakes in the performa for approval as the valid ground for quashing the assessment on the premise of non-application of mind by all the authorities involved in the process of recording reasons and providing satisfaction u/s. 151. Reliance is also placed on the recent judgment of Hon'ble Delhi High Court in the case of Best Cybercity India P Ltd. vs. ITO WP(C) 12360/2018 td: 21.05.2019 in para 23. Further, the Hon'ble Bench of Delhi ITAT in the following cases has quashed the reassessment proceedings for initiatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. From perusal of reason recorded, it can be seen that the AO has not looked into the return of income which is part of the records of the department. In the performa also, the AO does not mention the fact whether return has been filed or not, Non-examination of basic detail of return of income leads to quashing of assessment. Reliance for non-examination of return of income is placed in the case of Brij Pal Singh Tomer ITA No. 2539/Del/2019 and the Judgment of the Hon'ble Jurisdictional Delhi High Court in Shamshad Khan vs. ACIT 395 ITR 265 (Del). The department cannot and is not entitled to raise the plea that companies existence on other PAN number was not known to it as the same assessing authority has completed the assessment of assessee for AY 2003-04 on the PAN number on which return of income for present AY was filed. 3. Assumption of jurisdiction on the basis of invalid notice: From perusal of notice at page 1, it can be seen that notice u/s. 148 has been issued in the name of the artificial juridical entity without addressing the name of incumbent compliant. Therefore, issuance of notice in the name of the company instead of the name of the principal offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 (Del). 6. On careful consideration of the rival submissions, from the order of the coordinate Bench of ITAT in the case of Omkam Developers Ltd. (supra), I observe that in the similar set of facts and circumstances, similar legal contention was placed before the 'E' Bench which was adjudicated as follows:- 10. We have heard rival submission of the parties on the issue in dispute raised in the cross appeals. As far as ground No. 1 of the appeal of the assessee is concerned, the assessee has challenged the validity of the reassessment proceeding on the ground that approval for issue of the notice under section 148 of the Act was granted by the Learned Pr. CIT in a mechanical manner and without application of mind and, therefore, reassessment proceeding must be quashed. For adjudicating this issue, the reasons recorded by the Assessing Officer and relevant proforma of approval granted by the Pr. CIT are reproduced as under: Reason for the belief that income has escaped assessment in the case of M/s. Omkam Developers Pvt. Ltd. A.Y. 2009-10 (Pan:AAACQ5036B) 1. Name Address of the Assessee: M/s. Omkam Developers Ltd., 702, Arunachal Building, 19, Barakham ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged from the scrutiny of Bank Accounts: I. There were 7 Bank Accounts belonging to 6 entities in which cash of Rs. 15.26 crore was deposited in the F.Y.-2008-09: The cash deposited were swiftly Transferred to other entities through Cheques/RTGS. These-6 entities are proprietorships. The detail is given as per Annexure-C. The funds from other entities through Cheques/RTGS were also received in these accounts. The details of another 21proprietorships given are STR is as per Annexure-C1. II. The find from the entities mentioned in Annexure-C and C1 were transferred to a number of entities which are mostly entities already identified as the companies controlled by the entry operators, few of them have been listed in Annexure-1. III. The fund was rotated among the entities detailed in Annexure-C, C1 and Annexure-1 IV. There were 6 Bank Accounts Belonging to 6 Companies in which funds were received from mostly entities discussed in Annexure-C, C1 and Annexure-1 and the same was swiftly transferred to the other entities (Mostly Companies). The details of 6 such companies are given in Annexure-5 V. The fund was transferred to the entities which are the real benefic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned modus-operandi, it is actually assessee's own money (cash) which was rotated through such channel. This cash was out of his unaccounted income. I have reasons to believe that an amount of Rs. 1.93 crores has escaped from the Assessment for the A.Y. 2009-10 which was chargeable to tax. I am also satisfied that on account of failure on the part of the assessee to I disclose truly and fully all the material facts necessary for assessment for the above assessment year, the income chargeable to tax to the tune of Rs. 193.00 Lakh as escaped assessment with the meaning of Section 147 of the IT Act 1961 I have perused the information received from the Investigation Wing, Kolkata The Investigation Wing of the Department has sent comprehensive detail comprising inter alia the beneficiary's name, value of entry taken etc. In the aforesaid case as per record from ITD, return of income was filed on declaring Rs. 2,389/- income, it is noticed that the assessee company M/s. Omkam Developers Ltd., received accommodation entries to the tune of Rs. 1.93, crores during the F.Y. 2008-09 relevant to assessment year 2009-10 from the entry operators as mentioned in the chart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been the ritualistic and formal rather than meaningful, which is the rationale for safeguard of an approval by a high-ranking officer. Thus, in the instant case, mere mentioning of yes' for approval, without any other evidence of application of the mind, amounts to mechanical approval by the Learned Pr. CIT. 10.2 Further in Column No. 7 of the proforma, the section for invoking reassessment has been recorded as 147(b) of the Act. During the relevant period, section 147(b) was no longer in existence. This shows that the Ld. AO has filed the Proforma in mechanically manner and Ld. CIT has also approved the same mechanically. In the case of Madhu Apartment Private Limited vs. ITO, ITA. Nos. 3869 3870/Del./2018 wherein the Tribunal, Delhi Bench, vide order dated 01/02/2021 held as under: 7. After considering the rival submissions, we are of the view that the issue is covered by the Order of ITAT, Delhi G-Bench, Delhi in the case of VRC Township Pvt. Ltd., Delhi (supra) in which reopening of the assessment in identical circumstances was held to be bad in law and sanction accorded by the Sanctioning Authority was also found invalid, therefore, reopening of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10.2 in the case of Omkam Developers Ltd., we note that the coordinate Bench before recording its conclusion has also referred to the judgment of the Hon'ble High Court of Bombay in the case of Smt. Kalpana Shantilal Haria vs. ACIT (supra) wherein it was held thus:- 7. Mr. Chanderpal, learned Counsel appearing for the Revenue tendered a copy of the letter dated 19th December, 2017 issued to the petitioner wherein the Assessing Officer has stated that the words 147(b) were inadvertently filled in the prescribed form, instead of Section 147 of the Act while obtaining the sanction from the Joint Commissioner of Income Tax. It is further submitted on behalf of the Revenue that the same is a curable defect under section 292B of the Act. Therefore, the impugned notice cannot be held to be bad for mere incorrect mentioning of section on account of the mistake. 8. There can be no dispute with regard to the application of Section 292B of the Act to sustain a notice from being declared invalid merely on the ground of mistake in the notice. However, the issue here is not with regard to the mistake/error committed by the Assessing Officer while taking a sanction from the Joint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at this defect is curable u/s. 292B of the Act is concerned, the same contention has been decided by the ITAT Delhi Bench in the case of Madhu Apartments India Pvt. Ltd., ITA No. 3869 3870/Del/2018, order dated 01.02.2021, the relevant part of which has already been reproduced in the earlier part of this order since the same was referred to and included in the relevant part para 10.2 of the order of the ITAT in the case of Omkam Developers Ltd. (supra). It was held that this kind of defect and non-application of mind by the AO is not curable u/s. 292B of the Act. Therefore, respectfully following the judgment of the Hon'ble jurisdictional High Court of Delhi in the case of Yum! Restaurants (supra) and the judgment of the Hon'ble Bombay High Court in the case of Smt. Kalpana Shantilal Haria (supra) and orders of ITAT Delhi Bench in the cases of Omkam Developers Ltd. vs. ITO (supra) and Madhu Apartments P. Ltd. vs. ITO (supra), we hold that the impugned reassessment proceedings and the impugned reassessment order dated 03.03.2014 u/s. 147/144 of the Act deserve to be quashed only on this ground. We order accordingly. 11. Since, by the earlier part of this order, we have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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