2024 (5) TMI 156

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... is illegal and without jurisdiction. 3. That under the facts and circumstances, the approval u/s. 151 is fatally defective, mechanical and without application of mind which makes the whole proceedings without jurisdiction, illegal and unwarranted. 4. That under the facts and circumstances, addition of Rs. 20,00,000/- u/s. 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. 4.1 That the findings of A.O. are unsustainable for addition of Rs. 20,00,000/- in the absence of providing the copies of all materials used against the assessee and by not providing cross-examination of persons whose statements have been relied upon, thus no proper and reasonable opportunity of hearing has been allowed and principles of natural justice is grossly violated which makes the impugned asstt. unsustainable in law. 5. That under the facts and circumstances, addition of Rs. 10,00,000/- u/s. 68 for the share capital/share premium received from Apporva leasing finance & investment (p) ltd. by holding the same as received from alle....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... page 39 & 40 Back Page of Annexure A-13. The Assessing Officer analyzed the various modus operandi related to the entry operator in his order and Assessing Officer linked the information found during the search and the information collected from the assessee. Accordingly, made additions u/s 68 to the extent of Rs. 30,00,000/- and disallowed commission expenses for availing the above said accommodation entry @ 1.8% which comes to 54,000/-. 4. Aggrieved with the above order, the assessee preferred an appeal before the Ld. CIT(A). The assessee has raised the several grounds objecting to the reopening of the assessment jurisdiction and merits of the case. After considering the detailed submissions of the assessee, both on jurisdictional as well as merit, the Ld. CIT(A) dismissed various grounds raised by the assessee by observing as under: "4.4 Therefore, from the above details, it is noted that the AO has not acted mechanically before framing the reasons to believe. He has applied his mind by considering all the information before him and then has taken the approval of the higher authorities as required u/s 151 of the Act before issuing notice u/s 148 of the Act. He has n....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....provisions of the Act u/s 147 of the Act and, therefore, the same is hereby held to be valid. Accordingly, this ground of appeal is dismissed." 5. Aggrieved the assessee is in appeal before us and filed the present appeal. 6. At the time of hearing, the Ld. AR pressed only ground No.3 before us raising the issue that Assessing Officer has not taken proper approval and even the approval was granted mechanically by the PCIT without applying his mind. In this regard, he submitted that the Ld. PCIT has granted approval u/s 151 of the Act before issuing notice u/s 148 of the Act. In this regard, he brought to our notice Page Nos. 3 & 4 of Paper Book, which is approval form u/s 151 of the Act, in which Ld. PCIT has merely approved by recording as "Yes, I am satisfied". In this regard, he brought to our notice assessee's own case for A.Y.2009-10 (ITA No.1144/Del/2018), in which the SMC Bench has decided the issue in favour of the assessee. He prayed that similar issue in this approval may be decided accordingly. 7. Since, the assessee has pressed ground No.3. and other grounds of appeal were not heard or adjudicated. 8. On the other hand, the Ld. DR objected to the above submi....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....d 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. Accordingly, the Hon'ble High Court quashed the notice, since there was no proper application of mind by the Addl.CIT. 11. I find the Hon'ble Delhi High Court in the case of Pr. CIT vs. N.C. Cables Lid., while deciding an identical issue has held that section 151 of the Act clearly stipulates that the CIT, who is the competent authority to authorize the reassessment notice has to apply his mind and form an opinion. Mere appending of the expression 'approved' says nothing. It is not as if the commissioner has to record elaborate reasons for agreeing with the noting put up before him. At the same time, satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner. When such exercise appears to have been ritualistic and formal rather than meani....