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TMI Blog2024 (6) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be recorded of the given case which can be reflected in the briefest possible manner. When such exercise appears to have been ritualistic and formal rather than meaningful which is the rationale for the safeguard of an approval by a higher ranking official, the finding of the Tribunal quashing the reassessment proceedings cannot be disturbed. In the case of Chhugamal Rajpal vs. S.P. Chaliha Ors [ 1971 (1) TMI 9 - SUPREME COURT ] has held that where the commissioner had mechanically recorded permission and the important safeguards provided in the section 147 and 151 were lightly treated by the officer and the commissioner, the notice issued u/s 148 was held as invalid. Decided in favour of assessee. - Shri S. Rifaur Rahman, Accountant Member And Shri Yogesh Kumar U.S., Judicial Member For the Assessee : Shri Amit Goyel, Adv. And Shri Pranav Yadav, Adv. For the Respondent : Shri Anuj Garg, Sr. DR ORDER PER S.RIFAUR RAHMAN, AM: 1. This appeal has been filed by the Revenue against the order of Learned Commissioner of Income Tax (Appeals)-27, Delhi [ Ld. CIT(A) , for short], dated 07/08/2023 for Assessment Year 2018-19, whereas the Cross Objection has been filed by the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue of notice u/s 148. 4. On the facts and circumstances of the case and in law, the addition of Rs. 2,96,61,877/- made by the assessing officer is beyond the scope of provisions of section 147/148 of the Act. 4. The assessee has raised the jurisdictional issue in the Cross Objection filed by him, we proceeded to hear the Cross Objection first. 5. At the time of hearing, the Ld. AR specifically pressed ground No.3 of the Cross Objection filed by the assessee against the appeal of Revenue and submitted that the Assessing Officer has not taken proper approval and even the approval was granted mechanically by the Ld. JCIT without applying his mind. In this regard, he submitted that the Ld. JCIT has granted approval u/s 151 of the Act before issuing notice u/s 148 of the Act. In this regard, he brought to our notice Page No. 6 of Paper Book, which is approval from u/s 151 of the Act, in which the Ld. JCIT has merely approved by recording as Yes, I am satisfied. The Ld. AR submitted that use of the expressions such as Yes , or Yes I am satisfied or Approved do not meet the requirements of law. The submission of the assessee is reproduced as under:- The reassessment proceedings initiat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his satisfaction as contemplated u/s 151 of the Act. The said judgment of ITAT has been further affirmed by Hon'ble Delhi High Court vide its order dated 11.01.2017 (Pr. Commissioner of Income Tax v N.C. Cables Ltd. (ITA No. 335/2015). In the case of Amar Lal Bajaj v ACIT (2013) 37 Taxmann.com 7 (Mum) (Trib) the CIT accorded his sanction/approval by simply affixing approved at the bottom of the proposal prepared by A.O.. It was held that such approval cannot be construed as sanction/approval u/s 151(1) of Income Tax Act, 1961. Accordingly, the reassessment proceedings were held to be bad-in-law. The head note of the judgement is as under:- Section 151, read with section 147, of the Income-tax Act, 1961-Income escaping assessment Sanction for issue of notice Assessment year 1995-96 Assessing Officer completed original assessment under section 143(3) Subsequently he issued on assessee a notice under section 148 after four years seeking to reopen aforesaid assessment Commissioner simply affixed 'approved' at bottom of report prepared by Assessing Officer and accorded sanction under section 151(1) for reopening assessment Nowhere Commissioner had recorded a satisfaction no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld AR that there was no issue of approval involved before the Hon'ble High Court. 8. Considered the rival submissions and material placed on record, especially the impugned assessment order, reasons/ satisfaction /approval recorded for issue of notice u/s. 148 of the Act placed at page no. 6 of the paper book, which is a copy of performa for recording the reasons for initiating proceedings u/s. 148 wherein the Ld JCIT has granted approval by mentioning that Yes, I am satisfied. In Para 15 16 the decision in the case of PCIT v. Pioneer Town Planner Pvt. Ltd., (supra) the Hon'ble High Court held as under: - 15. A plain reading of the aforesaid provision would indicate that Section 151 of the Act stipulates that the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner must be satisfied , on the reasons recorded by the AO, that it is a fit case for the issuance of such notice. Thus, the satisfaction Of the prescribed authority is a sine qua non for a valid approval as per the said Section. 16. A perusal of the proforma attached as Annexure-II in the instant appeal would suggest that though the ACIT has appended his signatures by writi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord. Accordingly, ground No.3 raised by the assessee is allowed and other grounds of appeal raised by the assessee are not adjudicate at this stage. Accordingly, appeal filed by the assessee is partly allowed. In the case of Experion Developers Pvt Ltd. (supra), in para 42 of the decision, it was held that where sanction was accorded by writing that I am satisfied that it is a fit case for issuance of notice u/s 148, it was valid. In the present case of the assessee, no such satisfaction has been recorded by the JCIT and he has merely written- Yes, I am satisfied. It may be pertinent that in the case of Pioneer Town Planner (supra), the Hon'ble Delhi High Court has itself distinguished the case of Experion Developers (supra) because in the case of Pioneer Town Planner (supra) no such satisfaction that I am satisfied that it is a fit case for issuance of notice u/s 148 was recorded. In the present case of the assessee before us also, the JCIT has merely stated 'I am satisfied and has not recorded satisfaction that it is a fit case for issue of notice u/s 148 and therefore, the approval u/s 151 is only mechanical and not a valid approval. -In the case of United Electrical C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lime Chemical Ltd. reported in (2015) 64 taxmann.com 313 (SC) arising out of order of Hon'ble High Court of Madhya Pradesh in CIT vs. S. Goyanka Lime Chemicals Ltd. (2015) 56 taxmann.com 390 (MP). Section 151, read with section 148 of Income Tax Act, 1961 Income escaping assessment Sanction for issue of notice (Recording of satisfaction) - High Court by impugned order held that where Joint Commissioner recorded satisfaction in mechanical manner and without application of mind to accord sanction for issuing notice under section 148, reopening of assessment was invalid Whether Special Leave Petition filed against impugned order was to be dismissed Held, Yes (in favour of the Assessee). 9. Respectfully following the above decisions, the facts in the present case are also similar to the above facts on records. Accordingly, ground no 3 raised by the assessee in Cross Objection is allowed. 10. No other submissions were made against the other grounds raised in Cross Objection and Revenue s appeal. 11. In the result, the Cross Objection filed by the assessee is partly allowed and the jurisdictional issues raised by the assessee are decided in favour of the assessee. The appeal filed b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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