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TMI Blog2025 (1) TMI 503X X X X Extracts X X X X X X X X Extracts X X X X ..... urn of income for AY 2011-12 in question electronically on 07.07.2011 which was also duly processed under s. 143(1) of the Act, declaring total income of INR 12,72,890/-. Thereafter, as per the information received from the Investigation Wing of the Department, Gurgaon, the AO noted that the assessee has sold certain agricultural land parcels during the year and received consideration on sale of such land parcels. However, the capital gains arising on sale of such land parcels are susceptible to capital gains tax as such land parcels are to be regarded as capital asset as defined under s. 2(14) of the Act. 4. Based on such innocuous information without specific particulars stated to be collected by the AO alleging escapement of income in the hands of the assessee, the AO recorded reasons under s. 148(2) of the Act dated 21.03.2016 proposing of re-opening of concluded assessment in terms of section 147 of the Act by issuing notice under s. 148(1) of the Act. For the purposes of re-opening the assessment and issuance of notice under s.1 48 of the Act, the approval was sought by the AO from the Competent Authority namely, the Ld. Addl. Commissioner of Income Tax (Ld. Addl.CIT) in ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel for the assessee alleged that the purported Ld. Addl. CIT (identity, designation not known) apparently acted as a rubber stamp of the action of AO to re-open and disturb the concluded assessment based on wrong facts. The law mandates that the sanctioning authority is under statutory duty to look into the factual aspects and offer some comment in brief to justify his sanction to re-open the case in such circumstances. In the absence of any indication in the 'satisfaction note' by the purported Ld. Addl.CIT giving inference of application of mind, the so-called sanction under s. 151 of the Act is without any foundation. 4.4. The Ld. Counsel for the assessee adverted to the sanction so accorded by the purported Ld. Addl. CIT and submitted that a generic and cosmetic approval "Yes, I am satisfied with the reasons recorded by the AO for re-opening of the case" do not satisfy the requirement of law. Such expressions apparently smacks of a colourless and listless sanction, devoid of iota of reflection towards application of mind, if any. The Ld. Counsel for the assessee pointed out that various Courts and Tribunals have repeatedly frowned upon such sterile approval in the context of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. Pr.CIT cannot be faulted in law having regard to the plain language of the provisions of s. 151 of the Act. 6. We have carefully weighed the rival contentions on the preliminary challenge to the assumption of jurisdiction under s. 147 of the Act and perused the material available on record. 6.1. While several facets challenging the assumption of jurisdiction under s.147 are involved, to begin with, we consider it expedient to address ourselves on the legitimacy of approval stated to have been granted by the Ld. Addl.CIT under s. 151 of the Act as vehemently questioned on behalf of the assessee. 6.2. Since the primary issue hinges around the validity of approval of the Competent Authority to the reasons for re-opening the concluded assessment, the scanned copy of such approval memo/requisition memo under s. 151 of the Act is reproduced hereunder for easy reference:- 6.3. The reasons for re-opening the case under s. 147 of the Act are reproduced as under for ready-reference:- 6.4. A bare glance of approval memo would suggest that the AO has proceeded to initiate the action under s. 147 of the Act on the basis of so-called satisfaction of some Addl. CIT towards escapement as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority to apply its mind innately to the material available for alleged escapement and express his satisfaction on the reasons recorded. 7.2. Significantly, erstwhile s.151 of the Act is silent on opportunity to the assessee before sanctioned. The absence of any formal opportunity to the assessee rationally calls for greater degree of circumspection and restraint while evaluating the proposed action of the AO. The sanctioning authority while exercising power under s. 151 of the Act is thus expected to examine the reasons, material or grounds available and to judge whether they are relevant to formation of necessary belief on the part of the AO and thereafter, to record necessary satisfaction which should not be mechanical but as a result of application of mind as held in Chhugamal Rajpal vs S.P.Chaliha & Ors. (1971) 79 ITR 603(SC). 8. In the peculiar facts of the instant case, the purported sanction of the Addl.CIT is based on the premise that the assessee has not filed return of income at all and engaged in land deals of substantial amount. Driven by such grossly incorrect factual position, the Addl.CIT has granted sanction resulting in civil consequences to the assessee. 8.1. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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