TaxTMI 
TaxTMI 
TaxTMI 
2024 (3) TMI 828
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....ssessee was one of the concerns. Pursuant to the said search operation, reassessment proceedings were initiated against the respondent-assessee, whereby, the AO held that the respondent-assessee has taken accommodation entry amounting to Rs. 4,79,00,000/- which had escaped assessment. Upon recording of 'reasons to believe' by the concerned authority, a notice under Section 148 of the Act was duly issued to the respondent-assessee. Consequently, the respondent-assessee replied to the said notice with a request to consider the ITR it originally filed as the one filed in response to the notice under Section 148 of the Act. 3. Thereafter, in accordance with the provisions encapsulated under Section 143(3) read with Section 147 of the Act, a reassessment order was framed by the AO by making additions on account of unexplained (i) share premium and (ii) expenditure of commission for accommodation entries. The total taxable value determined by the AO amounted to Rs. 10,80,47,000/-. 4. Being aggrieved by the said order, the respondent-assessee preferred an appeal before the Commissioner of Income Tax (Appeals) ["CIT (A)"]. However, the same came to be rejected vide order dated 18.09.2017....
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....ant appeal raises no substantial question of law. 10. He submitted that unlike a mere mechanical approval, Section 151 of the Act requires sanction of the prescribed authority with a greater magnitude of consideration and analysis. According to him, while granting approval, merely appending the expression and recording "Yes" cannot be said to fall within the domain of sanction as it does not indicate a due application of mind as contemplated under Section 151 of the Act. He further submits that the ITAT has rightly relied upon the decision in the case of CIT v. M/s. S. Goyanka Lime and Chemicals Ltd. [2014 SCC OnLine MP 4550] to submit that the said expression would only mean a mechanical approval accorded by the prescribed authority. Learned counsel has further relied upon the decision of the Hon'ble Supreme Court in the case of Chhugamal Rajpal v. S.P. Chaliha [(1971) 1 SCC 453] to submit that where the sanction has been accorded mechanically, the notice itself deserves to be quashed. 11. According to him, the reasons recorded would show that there is no linkage between the tangible material and the culmination of the reasons to believe that income had escaped assessment. He su....
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....ne qua non for a valid approval as per the said Section. 16. A perusal of the proforma attached as Annexure-II in the instant appeal would suggest that though the ACIT has appended his signatures by writing in his hand "Yes, I am satisfied", however, the Principal Commissioner of Income-tax ["PCIT"] has merely written "Yes" without specifically noting his approval, while recording the satisfaction that it is a fit case for issuance of notice under Section 148 of the Act. 17. Thus, the incidental question which emanates at this juncture is whether simply penning down "Yes" would suffice requisite satisfaction as per Section 151 of the Act. Reference can be drawn from the decision of this Court in N. C. Cables Ltd., wherein, the usage of the expression "approved" was considered to be merely ritualistic and formal rather than meaningful. The relevant paragraph of the said decision reads as under:- "11. Section 151 of the Act clearly stipulates that the Commissioner of Income-tax (Appeals), who is the competent authority to authorize the reassessment notice, has to apply his mind and form an opinion. The mere appending of the expression "approved" says nothing. It is not as....
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....hat the 'rubber stamp' reason given mechanically for the supersession of each officer does not amount to 'reasons for the proposed supersession'. The most that could be said for the stock reason is that it is a general description of the process adopted in arriving at a conclusion. 28.. .. If that had been done, facts on service records of officers considered by the Selection Committee would have been correlated to the conclusions reached. Reasons are the links between the materials on which certain conclusions are based and the actual conclusions. They disclose how the mind is applied to the subject-matter for a decision whether it is purely administrative or quasi-judicial. They should reveal a rational nexus between the facts considered and the conclusions reached. Only in this way can opinions or decisions recorded be shown to be manifestly just and reasonable."(emphasis supplied)" 19. In the case of Chhugamal Rajpal, the Hon'ble Supreme Court refused to consider the affixing of signature alongwith the noting "Yes" as valid approval and had held as under:- "5. --- Further the report submitted by him under Section 151(2) does not mention any reason for ....