Tribunal invalidates notice under section 148, quashes reassessment, deletes penalty The tribunal found that the approval for issuing notice u/s. 148 was mechanical and lacked application of mind, rendering the reopening of the assessment ...
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Tribunal invalidates notice under section 148, quashes reassessment, deletes penalty
The tribunal found that the approval for issuing notice u/s. 148 was mechanical and lacked application of mind, rendering the reopening of the assessment invalid. Citing relevant case laws, the tribunal quashed the notice u/s. 148, allowing the appeal. As a result, the reassessment in the quantum appeal was deemed invalid, leading to the deletion of the penalty in the penalty appeal. Both appeals by the assessee were allowed, with the order pronounced on 05-10-2020.
Issues: Appeal against impugned order dated 21.2.2017 in quantum appeal and order dated 27.3.2018 in penalty appeal for assessment year 2006-07.
Analysis: 1. The assessee filed a return of income declaring NIL income, which was later reopened due to information received about accommodation entries totaling Rs. 75 lacs. The AO made an addition of Rs. 75 lacs as unexplained investment, which was upheld by the Ld. CIT(A) in the impugned order dated 21.2.2017. The assessee challenged the assessment order on various grounds, including the validity of the notice u/s. 148 of the Act.
2. The Ld. Counsel for the assessee argued that the approval for issuing notice u/s. 148 was mechanical and without application of mind, rendering the reopening of the assessment invalid. The Ld. CIT(A) and Ld. CIT(DR) supported the AO's decision. The Ld. Counsel for the assessee provided written submissions challenging the notice and the approval process, emphasizing that the notice u/s. 148 was not in accordance with the law.
3. The tribunal found that the approval granted by the Ld. CIT was mechanical and lacked application of mind, making it invalid for initiating reassessment proceedings. Citing relevant case laws, including the decision in Dharmender Kumar vs. ITO, the tribunal concluded that the reopening of the assessment was bad in law and quashed the notice u/s. 148. The tribunal allowed the legal ground involved in the appeal, leading to the allowance of the appeal.
4. Regarding the penalty appeal, since the reassessment in the quantum appeal was quashed, the penalty was deemed invalid and was deleted. Consequently, both appeals filed by the assessee were allowed, and the order was pronounced on 05-10-2020.
Full Summary is available for active users!
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
of 
Join Channel
TaxTMI 
