TaxTMI 
TaxTMI 
2025 (6) TMI 466
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....Ld. CIT(A) erred in relying on the ITAT Delhi order in case of Agroha Fincap Ltd Vs ITO, ward-1 (4), Delhi which is followed Delhi HC order in Case of Pr.CIT Vs. N.C Cables (2017) 391 ITR 11 and AKG Securities & Consulting Ltd. Vs ITO even where the remarks given by competent authority while granting approval u/s 151 defer in this case from above cases. 3. The Ld. CIT(A) has failed to adjudicate on addition of Rs. 7,12,00,000/- on account of unexplained money u/s 68 of the Act and addition of Rs. 14,24,000/- u/s 68 of IT Act on account of unexplained expenditure (u/s 69 of the Act) on merits. 4. The Ld. CIT (A) has failed to appreciate that the AO had framed opinion of escapement of amount of Rs. 8,57,00,000/- but during assessment period he made addition of Rs. 7,12,00,000/- and did not act in mechanical manner. The Ld.CIT(A) failed to adjudicate the case on merits. 5. The Ld. CIT(A) has failed to appreciate the bogus nature of transactions as the assessee company did not provide relevant documents before AO to establish the genuineness of the transactions so undertaken." 2. Brief facts relating to the grounds raised by the Revenue are, assessee filed....
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....corded by the assessing officer for reopening the case under section 148/147. It is noticed that the reopening was made on the basis of the letter dated 15/03/2018 forwarded by ADIT (Inv)-2(1), Delhi only. It shows that the reopening was without application of mind and was purely on the basis of borrowed satisfaction as the AO has not made any enquiry to satisfy himself about the allegations against the appellant. There was no independent application of mind by Assessing Officer to tangible material. Therefore, reopening of the case on this count is erroneous and reliance is placed on the decision of jurisdictional High Court of Delhi in the case of PClT vs. Meenakshi Overseas (P.) Ltd. [2017] 82 taxmann.com 300 (Delhi) wherein it was held that where reassessment was resorted to on the basis of information from DIT (Investigation) that assessee had received accommodation entry but there was no independent application of mind by Assessing officer to tangible material and reasons failed to demonstrate link between tangible material and formation of reason to believe that income had escaped assessment, reassessment was not justified. .......... 4.10 Further, the Ld. ....
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....t share inclusion and advance received were from bogus entities-Tribunal allowed assessee's appeal on merits- Revenue appealed against appellate order on merits- Assessee's cross appeal was on correctness of reopening of assessment- Tribunal upheld, assessee's cross-objections and dismissed Revenue's appeal holding that there was no proper application of mind by concerned sanctioning authority u/s Section 151 as a pre-condition for issuing notice u/s 147/148-Held, Section 151 stipulates that CIT (A), who was competent authority to authorize reassessment notice, had to apply his mind and form opinion-Mere appending of expression 'approved' says nothing-It was not as if CIT (A) had to record elaborate reasons for agreeing with noting put up-At same time, satisfaction had to be recorded of given case which could be reflected in briefest possible manner-In present case, exercise appears to have been ritualistic and formal rather than meaningful, which was rationale for safeguard of approval by higher ranking officer-Revenue's appeal dismissed." 11. Similar view has been taken by the coordinate Benches of the Tribunal in a number of cases where it ha....
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.... favour of the appellant company and allowed." 4. Since ld. CIT (A) has allowed the appeal on the jurisdictional issue, he has not dealt with the merits of the case. 5. Aggrieved with the above order, Revenue is in appeal before us. 6. At the time of hearing, ld. DR of the Revenue filed a written submissions which is reproduced as under :- "1. The present appeal has been preferred by the Revenue against the order dated 13.07.2020 passed by the Learned Commissioner of Income Tax (Appeals) [Ld. CIT(A)], whereby the assessment order passed under Section 147 of the Income-tax Act, 1961 (the "Act") was quashed solely on technical grounds without adjudicating on the merits of the case. Grounds of Appeal attached as Annexure 1. 2. The Ld. CIT(A) failed to appreciate that the assessee did not object to the validity of the notice issued under Section 148 within the prescribed period under Section 124(3) of the Income Tax Act 1961. Perusal of the assessment record reveals that the notice under Section 148 was issued on 31.03.2018. Furthermore, the office order sheet noting dated 23.10.2018 clearly shows that the Authorized Representative (AR) attended the proceedin....
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.... Section 133(6) were issued to all parties and the assessee involved in the transaction with the assessee. (Annexure 3) S.No. Parties Notices u/s 133(6) issued on Reply 1 M/s. Rerum Infrastructure Pvt. Ltd. 20.03.2018 No reply 2 M/s. Focus Industrial Resources Ltd. 20.03.2018 No reply 3 M/s. Arts Elastic Pvt. Ltd. 20.03.2018 No reply 4 Sanjoss Internet Pvt. Ltd. 20.03.2018 No reply There was no compliance to the said notices and the assessee also failed to establish the genuineness of the transactions before the AO, justifying the reopening under Section 147. 6. The Ld. CIT(A) erred in holding that the approving authority had not applied an independent mind while granting approval under Section 151 of the Act. The order of the Ld. CJT(A) is contrary to law and facts for the following reasons: a. The office order notesheet dated 23.10.201 (Annexure 4) indicates that the assessment record was presented to the competent authority for discussion, involving the Assessing Officer (AO) and the Additional Commissioner of Income Tax (Addl. CIT), along with the case records and relevant information. In the....
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....pproval in this case is not a mere endorsement but reflects a conscious decision based on the material placed before the authority. The AO's reasons were scrutinized, and the approving authority ensured that the conditions for reopening were met before granting sanction. 3. Absence of Mechanical Approval - In Agroha Fincap Ltd., the approval was found to be mechanical because it lacked reasoning or evidence of consideration. In contrast, in the present case, the approving authority has provided a clear indication that the reasons recorded by the AO were examined and found to be valid. fulfilling the requirements of Section 151. Therefore, the reliance on Agroha Fincap Ltd. and the precedents cited therein does not apply to the present case, as the approval here was granted with due diligence and proper application of mind. 7. The Ld. CIT(A) erred in not adjudicating the case on merits despite the fact that the AO made additions amounting to Rs. 7,12,00,000/- under Section 68 (unexplained money) and Rs. 14,24,000/- under Section 69 (unexplained expenditure) of the Act. These additions were based on substantive evidence and could not have been ignored w....
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....S Projects Ltd vs ACIT (2020) 113 taxmann.com 534 (Delhi): The Hon'ble Court upheld reopening where the AO relied on Investigation Wing inputs and corroborated material, reinforcing the Revenue's stand that the AO exercised independent judgment in reopening the case. 9. PRAYER: The Ld. CIT(A) failed to acknowledge that the AO exercised due diligence by issuing notices under Section 133(6), recording reasons for reopening, and obtaining necessary approvals under Section 151 after proper application of mind. Furthermore, the Ld. CIT(A) did not adjudicate the case on merits, despite the AO making substantial additions under Sections 68 and 69. It is also evident that the assessee failed to challenge the notice under Section 148 within the time prescribed under Section 124(3), rendering its challenge to jurisdiction unsustainable. The Revenue prays that the order of the Ld. CIT(A) be set aside and that the assessment order passed under Section 147 be upheld in the interest of justice and equity." 7. On the other hand, ld. AR of the assessee submitted as under :- "1. It is imperative to mention that during the course of hearing, the learned DR placed before ....
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.... dismissed) 237 Taxman 378 (SC) It is thus, contended that the re-opening of assessment ought to be quashed. 3. It is interesting to note that the CIT(A) has allowed the appeal of the assessee on two counts namely, that the reopening is on the basis of borrowed satisfaction and that the approving authority has given approval without application of mind - refer order of the CIT(A) on page no 18, para no 4.11. However, the Revenue in the grounds of appeal before the Tribunal, has taken a ground only in respect of the approval given by the concerned authority but the first aspect that the reasons for re-opening of assessment are incomplete and faulty and on the basis of borrowed satisfaction has not been challenged. Thus, notwithstanding the conclusion of the Honourable Tribunal on the grounds raised by the Revenue, the order quashing the assessment order of the Assessing Officer will still hold the field on the basis of the reasons being on the basis of borrowed satisfaction." 8. Considered the rival submissions and material available on record. We observed that based on the search and survey operations carried out in the case of Shri Pradeep Kumar Jindal who ....