2020 (1) TMI 1703

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....g of assessment, as well as the addition made on merits. 3. I have heard Sh. Somnath Ghosh, ld. Counsel for the assessee and Sh. Jayanta Khanra, ld. DR on behalf of the Revenue. On a careful consideration of the facts and circumstances of the case, perusal of the papers on record and the orders of the authorities below, as well as case law cited, I hold as follows. 4. I first take up the issue of re-opening. Reasons for re-opening as extracted by the AO at page 1 & 2 of his order are extracted for ready reference: "As per information received from DDIT(lnv) Unit-2(2),Kolkata vide F.No.DDIT(lnv)/Unit2(2)/Kol/STR/2016-17/1715 dt.06.03.2017, it appears that Sri Asit Kumar Patra (PANAJGPP9385A) Prop of M/s Kalpana Trading maintai....

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....g has simply used one word ("Yes"). This takes me to a conclusion that the approval given in form for recording reasons in ITNS10 at Column 14 was a mechanical approval. No proper satisfaction is recorded by the Pr. CIT-8, Kolkata. The Hon'ble Delhi High Court in the case of PCIT vs. N.C. Cables Ltd. [2017] 391 ITR 11 (Delhi) dtd. 11.01.2017 at para 11 states as follows: "11. Section 151 of the Act clearly stipulates that the CIT (A), 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 if the CIT (A) has to record elaborate reasons for agreeing with the noting put up. At the same time, satis....

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.... the facts of the case, I have to hold that approval for re-opening of the assessment was given by Pr. CIT in a mechanical manner and without application of mind and does not meet the statutory requirement of Section 151 of the Act. Thus re-opening of assessment is bad in law. 9. I also find that the AO has not applied his mind to the information received prior to recording of reasons, that the assessment should be re-opened. The fact is that the bank accounts do not belong to the assessee. This is accepted by the AO. No verification is done by the AO to the information received. The Hon'ble Delhi High Court in the case of Signature Hotels P. Ltd. vs. ITO [2011] 338 ITR 51, it is held that: "Section 147 of the Income-tax Act, 19....