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TMI Blog2025 (1) TMI 1292X X X X Extracts X X X X X X X X Extracts X X X X ..... grossly contrary to the facts on record.
'Reason to believe' is the starting point for re-opening a case. A freak foundation or reason that assessee did not file ROI is blatantly contrary to the facts. Belief stemmed from wholly unfounded reasons thus betrays the prerequisites of s. 147 of the Act. See ARVIND SAHDEO GUPTA [2023 (8) TMI 522 - BOMBAY HIGH COURT] -
Assumption of jurisdiction allegedly without meeting the pre-requisites of s.151 of the Act - In consonance with the view expressed in Jagbir Singh [2025 (1) TMI 503 - ITAT DELHI] we see palpable merit in the plea of the assessee that the sanction granted under s. 151 of the Act is extraneous and an empty formality and do not accord with its salutary purpose. The requirement of law is to grant speaking approval u/s 151 of the Act which is not found to be fulfilled. The notice issued u/s 148 as a sequel to such sanction and resultant assessment is thus vitiated in law.
Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... hing but a mere pretence. 4.2. The Ld. Counsel thereafter adverted to the judgement refereed by the Hon'ble Bombay High Court in the case of Arvind Sahdeo Gupta vs ITO-1 Writ Petition No.4793 of 2021 judgement dated 08.08.2023 for the proposition that re-opening of assessment based on incorrect facts are unsustainable in law. Similar view has been expressed by the Co-ordinate Bench of the Tribunal in the case of Kunwar Ayub Ali vs ITO in ITA No.3137/Del/2018 (Del.) order dated 17.04.2023 which has been rendered in the similar facts. In that case also, the reasons towards escapement of chargeable income were recorded on the belief that the assessee has not filed the return of income which was found to be grossly contrary to the facts on record. The notice issued under s. 148 of the Act was thus quashed being issued on the basis of inherently wrong facts. The Ld. Counsel thus canvassed that the jurisdiction usurped under s. 147 is a unsustainable at the threshold. Besides, the additions made do not square with facts either. 4.4. The Ld. Counsel thereafter adverted to the sanction so accorded by the Addl.CIT and submitted that a generic and cosmetic approval "I am satisfied that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the action of the Revenue authorities. 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. The reasons recorded by the AO for issuance of notice under s. 148 of the Act are reproduced as under:- 1. "On-perusal of the e-filing portal, it is found that the assessee has not filed any return of income for the A.Y. 2016-17. In absence of any ITR for the year under consideration, the nature of business activity of the assessee, if any, cannot be ascertained. 2. As per Actionable Information monitoring System available on Insight Portal, it has been found that the assessee has made transaction in bogus Long term Capital gain through reputed stocks by issuing ante dated forged contract notes during Financial Year 2015-16 relevant to A.Y. 2016-17. The assessee is one such beneficiary who has obtained accommodation entries amounting to Rs. 2,24,00,700/- in the form of bogus Long Term Capital Gain through penny stock from sale of script M/s Yamini Investments Company Limited during the year under consideration. 3. To bring the above information avai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CHANDRA BHARTI Designation Range-1, Faridabad Approval Status Approved Date of Approval 30.03.2021 Remarks of approving authority Considering the reasons recorded by the Assessing Officer as per Annexure, I am satisfied that it is a fit case for the issue of notice u/s 148 of the Income Tax Act, 1961. Approval is hereby accorded for issue of notice u/s 148 of the Income Tax Act, 1961. 6.2. As pointed out on behalf of the assessee, the belief towards escapement of chargeable income has been entertained by the AO on the basis that the assessee has not filed the return of income for AY 2016-17 in question which is grossly contrary to the facts on record. It is demonstrated on behalf of the assessee that the assessee has duly filed return of income on 02.08.2016. Hence, the most basic reason of holding belief itself is wholly incorrect. The basis that return of income has not been filed giving rise to the reason to belief towards escapement in the reasons recorded is itself contradicted by the AO himself in the assessment order where it categorically notes that the assessee had filed return of income for AY 2016-17 on 02.08.2016, declaring total income of INR 6,40,160/-. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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