TaxTMI 
TaxTMI 
2018 (7) TMI 143
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.... of Rs. 22,65,000/- the authorities below failed to consider that 'appellant' being an Agriculturist having no other source of Income liable for Tax and therefore, no addition was called for in peculiar facts of the case. 4. BECAUSE, while making the addition of Rs. 22,65,000/- the authorities below failed to consider that 'appellant' has entered into an agreement with Ghasi Ram another Agriculturist who has provided funds to the 'appellant' from which Agriculture Land was purchased. 5. BECAUSE, in any case and in any view of the matter impugned additions/disallowances and impugned assessment order is bad in law, illegal, unjustified barred by limitation, contrary to facts and law based upon incorrect assumption of facts and further without allowing adequate opportunity of hearing in violation of principals of natural justice and therefore, the additions made deserves to be quashed." 2. An additional ground has also been taken, as follows: "Because the mechanical approval, without application of mind granted by the Additional Commissioner of Income Tax, Range-3, Mathura under section 151 for issuing notice dated 27.03.2015 under....
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....n ITA No. 988/Del/2018 (APB-19-49) held that:- "6.3 It is further noted that the proceedings have been initiated on the basis of no material much less any tangible and, relevant material and as such reasons record do not constitute valid reason to believe for initiating proceedings u/s. 147 of the Act. It is further noted that the approval granted by the competent authority is a mechanical approval and action has been taken mechanically because on perusing the reasons recorded, it demonstrates that Joint CIT has written "Yes, in view of reasons recorded by the AO, I am satisfied that this is fit case for issue of notice u/s. 148 and similarly, the Ld. CIT, Dehradun has mentioned "Yes, I am satisfied" which establishes that both the authorities have not recorded proper satisfaction / approval, before issue of notice u/s. 148 of the Act. Thereafter, the AO has mechanically issued notice u/s. 148 of the Act, on the basis of information allegedly received by him from the DCIT, Central Circle, Dehradun. Keeping in view of the facts and circumstances of the present case and the case law applicable in the case of the assessee, we are of the considered view that the reopening in t....
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....te authorities have interfered into the matter. In doing so, no error has been committed warranting reconsideration." (C.) Hon'ble Supreme Court of India in the case of CIT vs. S. Goyanka Lime & Chemical Ltd. reported in (2015) 64 taxmann.com 313 (SC) in the Head Notes has held that "Section 151, read with section 148 of 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 the Assessee)." 6.4 In the background of the aforesaid discussions and respectfully following the precedents, as aforesaid, we are of the considered view that proceedings initiated by invoking the provisions of section 147 of the Act by the AO and upheld by the Ld. CIT(A) are non est in law and without jurisdiction, hence, the reassessment is quashed. Since we have already quashed the reassessment, ....
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....P. Chaliha', 79 ITR 603 (SC), the Hon'ble Supreme Court held that the ITO had no material before him which could satisfy the requirements of either clause (a) or clause (b) of section 147 and that therefore, he could not have issued a notice under section 148. The Hon'ble Supreme Court further held that "Further, the report submitted by him under section 151(2) does not mention any reason for coming to the conclusion that it is a fit case for the issue of a notice under section 148." 16. The Hon'ble Court concluded that "We are also of the opinion that the Commissioner has mechanically accorded permission. He did not himself record that he was satisfied that this was a fit case for the issue of a notice under section 148. To question No. 8 in the report which reads "Whether the Commissioner is satisfied that it is a fit case for the issue of notice under section 148", he just noted the word "Yes" and affixed his signature there-under. We are of the opinion that if only he had read the report carefully, he could never have come to the conclusion on the material before him that this is a fit case to issue notice under section 148. The important safeguards provided in sections 147 ....
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....ere the facts of the present case'. 20. In 'Sanjay Kumar Agarwal, HUF vs. DCIT', ITA No. 290/Agra/2010-ITATAgra, the Agra Bench of the Tribunal upheld the notice issued under section 148 of the Act based on the report of the Investigation Wing. The issue of validity or otherwise of the approval granted, which is the issue at hand, was not present therein. 21. In 'ITO vs. Purushottam Das Bangur', 224 ITR 362 (SC), re-assessment proceedings were upheld where the Assessee claimed that he had incurred capital loss on sale of shares held in a company, which was based on official quotation at Calcutta Stock Exchange and the same was allowed in original assessment. Subsequently, the ITO received a letter from the Directorate of Investigation, giving detailed particulars collected from the Bombay Stock Exchange, which revealed that the quotation appearing at the Calcutta Stock Exchange was a result of manipulated transaction. On the very next day of receipt of the letter, the ITO issued notice under section 147(b). The Hon'ble Supreme Court found that the letter from the Directorate contained definite information derived from the Bombay Stock Exchange Directory about the financial co....
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.... good and adequate reasons to invoke the reopening provisions. As per the mandate of section 151 (2) of the Act, the Competent Authority has to examine the reasons, material or grounds on which the reopening is sought to be based and to judge as to whether they are sufficient and adequate to the formation of the necessary belief of escapement of income from taxation on the part of the AO. It is if and only if the Competent Authority, after applying his mind, is of the opinion that the AO's belief is well reasoned and bonfide, that he will accord his sanction thereon. 26. In 'Narayanappa' (supra), it has been held that the stage for obtaining the sanction of the Competent Authority is administrative in character and not quasijudicial . However, in 'Chhugamal Rajpal vs. S.P. Chaliha', 79 ITR 603 (SC) (supra), it has been held that where the Commissioner, while granting the sanction just noted the word "Yes" and affixed his signature thereunder, he had only mechanically accorded permission, and that the important safe-guards provided in section 151 were lightly treated. 27. 'Narayanappa' (supra) is dated 27.09.1966, whereas 'Chhugamal' (supra) was handed down on 21.01.1971. Both....