Reassessment notice invalidated due to mechanical approval, partially favoring assessee.

The Tribunal deemed the reassessment proceedings invalid due to the mechanical approval under Section 151 by the Pr. CIT. Consequently, the reassessment notice under Section 148 was invalidated, partially favoring the assessee. Other grounds raised were dismissed. The decision was pronounced on 18-12-2019.

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Issues Involved:
1. Validity of the order passed by the CIT(A).
2. Legality of the initiation of proceedings under Section 147/148.
3. Adequacy of reasons for reassessment.
4. Full and true disclosure by the assessee.
5. Independent application of mind in recording reasons for reassessment.
6. Validity of approval obtained under Section 151.
7. Addition of share application money under Section 68.
8. Enhancement of income by assuming commission under Section 69C.
9. Violation of principles of natural justice in enhancing income without notice under Section 251(2).

Issue-wise Detailed Analysis:

1. Validity of the order passed by the CIT(A):
The assessee contended that the order passed by the CIT(A) was erroneous both in law and on facts. The Tribunal did not specifically address this issue independently but considered it within the broader context of the reassessment proceedings.

2. Legality of the initiation of proceedings under Section 147/148:
The assessee argued that the initiation of proceedings under Section 147, read with Section 148, was invalid as the conditions and procedures prescribed under the statute were not complied with. The Tribunal found that the approval granted by the Pr. CIT was mechanical and without application of mind, thus invalidating the reassessment proceedings.

3. Adequacy of reasons for reassessment:
The assessee claimed that the reasons for reassessment lacked a live link between the material and the belief formed. The Tribunal agreed, noting that the approval for reassessment was granted without proper examination of materials, making the reassessment proceedings invalid.

4. Full and true disclosure by the assessee:
The assessee asserted that all material facts necessary for assessment were fully and truly disclosed. The Tribunal did not find it necessary to address this issue separately, given the decision on the invalidity of the reassessment proceedings.

5. Independent application of mind in recording reasons for reassessment:
The assessee argued that the reassessment order was based on reasons recorded without independent application of mind and was merely a borrowed satisfaction. The Tribunal concurred, emphasizing that the approval by the Pr. CIT was mechanical and lacked detailed examination.

6. Validity of approval obtained under Section 151:
The Tribunal focused significantly on this issue, concluding that the approval granted by the Pr. CIT was mechanical and without application of mind. The Tribunal cited precedents, including the case of Dharmender Kumar vs. ITO, to support its decision that the reassessment proceedings were invalid due to improper approval.

7. Addition of share application money under Section 68:
The Tribunal did not specifically address this issue independently due to the quashing of the reassessment proceedings based on the invalid approval under Section 151.

8. Enhancement of income by assuming commission under Section 69C:
Similarly, the Tribunal did not examine this issue independently, as the reassessment proceedings were already deemed invalid.

9. Violation of principles of natural justice in enhancing income without notice under Section 251(2):
The assessee argued that the enhancement of income was done without giving notice, violating the principles of natural justice. The Tribunal did not address this issue separately, given the overall decision on the invalidity of the reassessment proceedings.

Conclusion:
The Tribunal concluded that the reassessment proceedings were invalid due to the mechanical and non-application of mind in granting approval under Section 151 by the Pr. CIT. Consequently, the reassessment notice issued under Section 148 was deemed invalid, and the appeal was partly allowed in favor of the assessee. Other grounds raised by the assessee were dismissed as they were not pursued further. The Tribunal's decision was pronounced on 18-12-2019.

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