TaxTMI 
TaxTMI 
2019 (4) TMI 1744
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....from the Office of the Director of Income-tax (Investigation- II), Jhandewalan Extension, New Delhi, that the assessee has received accommodation entries from certain companies floated by Shri Surendra Kumar Jain group of cases which was detected during the course of search and post search inquiries conducted in the case of Shri Surendra Kumar Jain group of cases, the Assessing Officer reopened the assessment by recording reasons and by issue of notice u/s 148. Subsequently, the assessee asked for reasons recorded which was provided to the assessee. The assessee filed objections to the notice issued u/s 148 which was rejected by the Assessing Officer. Subsequently, during the course of assessment proceedings, the Assessing Officer noted tha....
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.... the initiation of proceedings U/s. 147/ 148 are illegal, without jurisdiction, mechanical, without application of mind and unsustainable in law as well as on merits. 2. That under the facts and circumstances, approval U/s. 151 of the superior authorities is not accordance with law and otherwise also mechanical and without application of mind, making the re - asstt. proceedings un - sustainable in law 3. That under thefacts andcircumstances, addition of Rs. 25 lacs under section 68 for the share capital / share premium received from Shalini Holdings Ltd. by holding the same as received from alleged entry operator is illegal and unsustainable in law as well as on merits. 4. That under thefacts andcircumstances, add....
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....d in 258 ITR 317, he submitted that under identical circumstances, the Hon'ble High Court has held that the CIT is required to apply his mind to the proposal put up to him for approval in the light of the material relied upon by the Assessing Officer. The said power cannot be exercised casually and in a routine manner. Referring to the decision of the Hon'ble Delhi High Court in the case of Pr. CIT vs. N.C. Cables reported in 391 ITR 11 (Del), he submitted that when there is no proper application of mind by the sanctioning authority for issuing notice u/s 147 or 148, reassessment proceedings are not valid. In this case also the approval u/s 151 was given as 'approved.' Referring to the decision of the Hon'ble Bombay High Court i....
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.... dated 31.08.2015 (ITAT Delhi); iii) Arjun Singh vs. Anr vs. ADIT & Ors., 246 ITR 363 (MP); iv) Raj Kishore Prasad, 88 CTR (All) 152; and v) Shri Amarlal Bajaj vs. ACIT, ITA No.611/Mum/2004, Order dated 24.07.2013 (ITAT, Mumbai) 6. He accordingly submitted that on this issue itself the reassessment proceedings should be quashed because the ld. CIT while giving approval has given the same in a mechanical manner and without application of mind. 7. The ld. DR, on the other hand, supported the order of the CIT(A) on this issue. The ld. counsel for the assessee, in his rejoinder, submitted that although it was argued before the CIT(A) on the issue of approval u/s 151 of the IT Act, however, the ld.CIT(A) has c....
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....der. A perusal of the approval given u/s 151, copy of which is placed at pages 20 and 21 of the paper book shows that the Pr. CIT while giving approval has simply mentioned as under:- "Yes. I am satisfied." 10. I find, the Hon'ble Delhi High Court in the case of United Electrical Company Pvt. Ltd. (supra) while deciding an identical issue has held that the power vested in the commissioner u/s 151 to grant or not to grant approval to the Assessing Officer to reopen an assessment is coupled with a duty. The commissioner is required to apply his mind to the proposal put up to him for approval in the light of the material relied upon by the Assessing Officer. That power cannot be exercised casually and in a routine manner. Accor....