2021 (6) TMI 1060

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....of cash deposit in bank account, by ignoring the facts of the case and submissions of assessee and without observing the principles of natural justice. 4. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other. 3. The assessee also raised the additional ground vide application dt. 07/03/2020 stating therein as under: 1. That having regard to the facts and circumstances of the case, Hon'ble CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in passing the impugned assessment order u/s 147 r.w.s 143(3) of the Act and that too without complying with the mandatory requirements and conditions u/s 151 as envisaged under the Income Tax Act, 1961. Since the above ground does not require fresh facts to be investigated and goes to the root of the matter, it is prayed that it may please be admitted in view of the Hon'ble Supreme Court decision in the case of NTPC Limited 229 ITR 383. 4. The Ld. Counsel for the assessee submitted that the additional ground raised is purely a legal ground, it does not requi....

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.....O. under section 147 r.w.s 148 of the Act without complying with mandatory requirement and conditions envisaged under section 151 of the Act. 8. The facts related to this issue in brief are that the A.O. on the basis of AIR information that the assessee had deposited cash amounting to Rs. 25,00,000/- in saving bank account maintained with Punjab & Sind Bank, New Grain Market, Jalnadhar initiated the proceedings under section 147 of the Act and issued the notice under section 148 of the Act. The A.O. framed the assessment at an income of Rs. 50,99,170/- as against Rs. 3,500/- declared by the assessee alongwith agriculture income of Rs. 2,00,000/-. 9. Being aggrieved the assessee carried the matter to the Ld. CIT(A) and challenged the validity of the reopening of the assessment. It was submitted that the reasons recorded by the A.O. were completely based on incorrect facts. 10. Ld. CIT(A) however observed that as the source of cash deposit received in the bank remained unexplained, the proceedings under section 147 of the Act were initiated. He therefore sustained the action of the A.O. in initiating the proceedings under section 147 of the Act. 11. Now the assessee is i....

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....ice under section 148 of the Act for reopening the assessment under section 147 of the Act. It was stated that the A.O. after recording the reasons applied, his mind and reopened the assessment. 14. We have considered the submissions of both the parties and perused the material available on the record. In the present case it is noticed that the A.O. obtained the approval of the JCIT before issuing the notice under section 148 of the Act, performa copy of which is placed at page no. 1 of the assessee's paper book, in the said Performa for recording the reasons for initiating the proceedings under section 147 / 148 of the Act and for obtaining the approval of the Ld. JCIT, it has been mentioned in column no. 11 as under: " Yes it is approved for 148 action " SD/- (Umesh Takyar) Joint Commissioner of Income Tax Range-1, Jalandhar From the aforesaid approval it is clear that the JCIT, Range-1, Jalandhar recorded the satisfaction in a mechanical manner without application of mind. He accorded the sanction for issuing notice under section 148 of the Act in a mechanical manner. 14.1 On a similar issue the Hon'ble Guwahati High Court in....

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....sue the ITAT Chandigarh Bench "B" Chandigarh vide order dt. 15/03/2021 in ITA No. 215/Chd/2020 for the A.Y. 2009-10 in the case of Shri Tek Chand Vs ITO, Ward-2, Kaithal held as under: 14.1 The A.O. obtained the approval of the PR. CIT before issuing the notice under section 148 of the Act. The proposal dt. 11/03/2016 seeking the approval for issuance of notice under section 148 of the Act, by the A.O. is placed at page no. 2 & 3 of the assessee's paper book. While giving the approval the Ld. PR. CIT, Karnal recorded as under: " Yes, satisfied, it is a fit case for issue of notice under section 148 " Sd/- Pr. CIT, Karnal 14.2 From the aforesaid approval, it is clear that the Ld. Pr. CIT recorded satisfaction in the mechanical manner, without application of mind to accord sanction for issuing notice under section 148 of the Act. On an identical issue the Hon'ble M.P. High Court in the case of CIT Jabalpur Vs. S. Goyanka Lime & Chemical Ltd. reported at (2015) 56 Taxmann.com 390 by following its own decision in the case of Arjun Singh Vs. ADIT (2000) 246 ITR 363 (M.P) held as under: 7. We have considered the rival contentions ....