TaxTMI 
TaxTMI 
2018 (2) TMI 871
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in the books of the assessee as unexplained shown as receipt of share application money. 2. On the facts and circumstances of the case and in law the learned CIT (A) has erred in appreciating that the assessee company had not discharged its onus of proving the creditability of the applicants from whom the money was alleged to have been received. 3. On the facts and in the circumstances of the case and in law the learned CIT(A) has erred in deleting the addition made u/s 69C of Rs. 1,04,500/- on account of commission paid for obtaining the accommodation entries." 3. The Objector, M/s. Virat Credit & Holdings Pvt. Ltd., by filing the present cross objections challenged the assessment order dated 30.12.2010 passed by the Assessing Officer qua the assessment year 2005-06 on the grounds inter alia that :- "1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in quashing the impugned assessment order passed by Ld. AO without complying with the mandatory requirements of section 147 to 151 of the Income tax Act, 1961 and without recording valid approval as per law and passing the impugned order that too without independent application of mind. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3/2006 vide receipt No 3122 declaring income of Rs. 31490/-. During the year the assessee company has raised share application money amounting to Rs. 12261500/-. The assessment was completed under section 143(3) of the IT Act vide order dated 4/12/2007 at returned income of Rs. 31490/-. Later on information received from office of the Addl CIT Range-1 New Delhi that during the assessment proceedings of M/s Aanchal Net Technologies Pvt Ltd, the ITO Ward 1 (1), New Delhi, came across the 7 cases of following companies, which were involved in providing bogus entries: i) M.s Anchal Net Technologies Pvt Ltd ii) M/s Anchal Buildcon Pvt Ltd iii) M/s Anchal Contractors Pvt Ltd iv) M/s Anchal Township Pvt Ltd v) M/s Anchal Info System Pvt Ltd vi) M/s Anchal Projects Pvt. Ltd. vii) M/s Anchal Infrasturals Pvt. Ltd. The above companies were having their office addresses either as "88, Baldev Park, Parwana Road, Khureji Khas Delhi" or as "Plot No 55, Patpargang Industrial Area, Delhi". It was found that one Sh P K Jindal was running a racket of providing accommodation entries. Besides the above 7 companies, he was also utilizing many more companies. He controlled mos....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the reopening contended that Addl.CIT has accorded sanction without applying judicial mind which is not sustainable; that AO has not applied his independent judicial mind while recording reasons to reopen the assessment rather reasons are based upon the alleged admission of one Shri P.K. Jindal; that the AO has not disposed of all the preliminary objections raised by the assessee company for reopening; that the entire enquiry / investigation has been made by the AO at the back of the assessee company; that Juneja Nagpal Construction Pvt. Ltd. was not doing any business. 9. However, on the other hand, the ld. DR to repel the arguments addressed by the ld. AR for the assessee company contended that only prima facie material is to be seen for the purpose of reopening; that sanction has been accorded by Addl. CIT for reopening after duly applying his mind. 10. First of all, ld. AR for the assessee company drew our attention towards sanction accorded by the Addl.CIT for reopening of the assessment obtained by moving an application under Right to Information Act, 2005, available on file as Annexure 'A'. Perusal of the sanction accorded by Addl. CIT in the prescribed proforma shows tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....llowing findings :- " Section 151, read with section 148 of the 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 assessee] Search and Seizure-Procedure for black Assessment- Search was conducted at residential and business premises of Assessee and notice for block assessment u/s. 158-BC was issued- For block period, returns were filed that were processed u/s. 143 (1)- However, notice u/s. 148 was issued by AO, on basis of certain reasons recorded-Assessee objected to same before AO, that was rejected and assessment was completed u/ss. 143(3) and 147-CIT(A) found that reason recorded by Joint Commissioner of Income Tax, for according sanction, was merely recording 'I am Satisfied'-Action for sanction was alleged to be without application of mind and to be done in mechanical mann....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s for agreeing with noting put up-At same time, satisfaction had to be recorded of given case which could be reflected in briefest possible manner- In present case, exercise appears to have been ritualistic and formal rather than meaningful, which was rationale for safeguard of approval by higher ranking officer-Revenue's appeal dismissed." 16. Furthermore, perusal of the noting sheet dated 09.03.2010 to 30.12.2010 made available to the Bench for perusal shows that only AO has recorded that Addl.CIT has considered the reasons recorded before according the sanction, however even no prima facie material is there, if Addl.CIT has applied his mind by considering the reasons recorded before according the sanction. We are of the considered view that the AO who has recorded the reasons cannot enter into the mind of the sanctioning authority (Addl.CIT) discharging the quasi-judicial function for according valid sanction for reopening the assessment. 17. Moreover, according sanction is not a supervisory role rather it is a quasi-judicial function to be performed by the Addl.CIT as required u/s 151 of the Act. When the Revenue Department is manned by highly qualified officers they are....