AI Drafter 
TaxTMI 
TaxTMI 
2024 (11) TMI 861
X X X X Extracts X X X X
X X X X Extracts X X X X
....d that assessee has made sale of Rs. 11,12,37,624/- to Shambhu Dayal Sharma. He observed that the sales are totally bogus because Shambhu Dayal Sharma during his assessment proceedings failed to substantiate that he has purchased gold bar in Delhi and sold them at Satna and Rewa. Based on the findings in the case of Shambhu Dayal Sharma and his statement, the assessee was asked to explain why the same should not be treated as bogus entry provided by Shambhu Dayal Sharma. However, AO of the view that the assessee failed to justify with proper evidences, accordingly, ld. DR supported the findings of the Assessing Officer and submitted that the assessee has converted his own cash by getting accommodation entries from Shambhu Dayal Sharma and objected to the findings of the ld. CIT (A). 3. On the other hand, ld. AR also brought to our notice findings of Assessing Officer at pages 16 to 18 of the order and also brought to our notice page 43 of the order of ld. CIT (A). He supported the findings of ld. CIT (A) in paras 10.6 to 10.8 of his order. He submitted that ld. CIT(A) has rightly gave a finding that the purchases and sales invoices were figured in VAT and Assessing Officer has n....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the ld. AR for the assessee. He referred to the approval granted by the JCIT which is placed at page 37 of the paper book. He submitted that it is not the case that 'Yes' alone is recorded whereas records were maintained by his office and reviewed continuously. He relied on the following cases and tried to distinguish the submissions made by the ld. AR for the assessee as under:- "I. HIGH COURT OF DELHI in the case of Principal Commissioner of Income-tax-6 v. Meenakshi Overseas Pvt. Ltd. [ITA 651/2015] (Copy Enclosed) "Para 16. the Court finds that they are distinguishable in their application to the facts of the present case. It is not as if the Additional CIT here has merely appended his signature without specifically noting his approval. This is also not a case where a "Yes" rubber stamp has been used as was in the case of Central India Electric Supply Co. (supra). For the purpose of Section 151 (l) of the Act, what the Court should be satisfied about is that the Additional CIT has recorded his satisfaction "on the reasons recorded by the Assessing Officer that it is a fit case for the issue of such notice". In the present case, the Court is satisfied that by ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oper application of mind, by recording "I am satisfied that it is a fit case for issuance of notice u/s 148", the issuance of notice under section 1471148 was held to be valid. 43. Therefore, it is clear that necessary sanction for issuance of notice under section 148, as required under section 151 had been obtained" III. HIGH COURT OF DELHI in the case of Principal Commissioner of Income-tax-7 v. Pioneer Town Planners (P.) Ltd. [2024]160 taxmann.com 652 (Delhi) (Copy Enclosed) In this case, observation of Hon'ble Delhi High Court in Para 22 of the order again confirms the ration laid down in the case of Principal Commissioner of Income-tax-o v. Meenakshi overseas Pvt Ltd. [ITA 651/2015]. In the other word Hon'ble High Court recognized that, the use of phrase "Yes I am satisfied" will II the mandate of the section 151 of the IT act. The said Para 22 of the order is reproduced as under :- "22. So far as the decision relied upon the Revenue in the case of Meenakshi Overseas Pvt. Ltd. is concerned, the same was a case where the satisfaction was specifically appended in the proforma in terms of the phrase- "Yes, I am satisfied". Moreover, par....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g has been made by the approving authority on the basis of reason recorded by the Assessing Officer. In view of ratio laid down in above mentioned decisions, the approval given by the Joint CIT under Section 151 (2) of the Act is in accordance of the provisions of the I.T. Act and the issue raised by the assessee is found to be squarely covered in favour of the Revenue by aforesaid decisions of Hon'ble High Court of Delhi and ITAT, Delhi." 6. Considered the rival submissions and material placed on record. First let us take up the department appeal, we observed that the AO has considered the information in the assessment proceedings in the case of Shambhu Dayal Sharma, in which it was found that the purchases and sales declared by him was bogus. Based on such findings, the case of the assessee was reopened and the sales declared by the assessee were treated as bogus. The AO proceeded to make the addition u/s 69A of the Act. We observed that the ld CIT(A) has given clear finding that the AO has not rejected the books of account and accepted the purchases and inventory declared by the assessee, proceeded to make the addition. We are also in agreement with the above findings tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f mind had arisen for our consideration in the case of The Principal Commissioner of Income Tax-7 vs. Pioneer Town Planners Pvt. Ltd. (2024) SCC OnLine Del 1685, wherein, we had held as follows:- "13. The primary grievance raised in the instant appeal relates to the manner of recording the approval granted by the prescribed authority under Section 151 of the Act for reopening of assessment proceedings as per Section 148 of the Act. xxxx xxxx xxxx 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the respondents that 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 reasonable."(emphasis supplied)." just and 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 S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed, the same was a case where the satisfaction was specifically appended in the proforma in "Yes, I am satisfied". Moreover, paragraph 16 of-terms of the phrase the said decision distinguishes the approval granted using the expression "Yes" by citing Central India Electric Supply, which has already been discussed above. The decision in the case of Experion Developers P. Ltd. would also not come to the rescue of the Revenue as the same does not deal with the expression used in the instant appeal at the time of granting of approval. 23. Therefore, it is seen that the PCIT has failed to satisfactorily record its concurrence. By no prudent stretch of imagination, the expression "Yes" could be considered to be a valid approval. In fact, the approval in the instant case is apparently akin to the rubber stamping of "Yes" in the case of Central India Electric Supply." 19. The decision in "Pioneer" case was followed by us in the case of Principal Commissioner of Income Tax, Central Circle- 02 vs. M/s. MDLR Hotels Pvt. Ltd. [ITA 593/2023], wherein, the Competent Authority had granted approval in terms of Section 153-D of the Act to as many as 246 proposed assessments by way....