TaxTMI 
TaxTMI 
2025 (7) TMI 1094
X X X X Extracts X X X X
X X X X Extracts X X X X
....erated and controlled by the above Jain brothers and as per the reports available with the AO, assessee also an accomplice in this business for many years. Based on various informations, the case of the assessee was reopened and accordingly, notice u/s 148 of the Act was issued after taking prior approval of the competent authority requiring the assessee to file his return of income. Accordingly, the abovesaid notice was issued on 28.03.2018. Accordingly, assessment u/s 147 read with section 143(3) was passed determining the taxable income at Rs. 11,93,64,350/-. 3. Aggrieved assessee preferred an appeal before the ld. CIT (A) and ld. CIT(A) dismissed the appeal preferred by the assessee. Subsequently, assessee preferred an appeal before the ITAT and assessee has challenged various jurisdictional issue raising several grounds. The coordinate Bench has decided one of the jurisdictional issues raised by the assessee relating to the issue of whether the assessment has to be completed u/s 153C or 147 of the Act. Accordingly, they have decided in favour of the assessee and adjudicated only ground no.1.3 raised by the assessee. 4. Subsequently, Revenue filed an appeal before the Hon....
X X X X Extracts X X X X
X X X X Extracts X X X X
....upon case laws 1 In sanction proforma u/s 151 as supplied to assessee by Ld AO, reference is made to omitted provision of sec 147(b), which is no longer res integra and is held to be fatal in series of cases by this hon'ble ITAT In series of decisions of the Hon'ble ITAT it is consistently held that reference in sanction proforma of provision which is omitted would render the reopening invalid On issue of fatal impact of reference to omitted sec 147(b) in sanction proforma a) Delhi bench Amit Khatri I.T.A No.2430/Del/2023 (18.12.2024) b) Delhi bench Rajeev Kumar Arora ITA Nos. 622, 641, 698 & 642/Del/2024 (16.10.2024) c) Delhi Bench Montreaux Resorts Pvt. Ltd (09.10.2024) ITA Nos. 2352/Del/2024 & 2353/Del/2024 2 In sanction proforma where concerned PCIT has given sanction, no date is mentioned, which is also fatal to instant reopening action Undated sanction is held to be invalid On undated sanction a) Ahd bench in Amrutbhai G. Prajapat (I.T.A. No. 362/Ahd/2019) 17.01.2020 b) Hon'ble P&H High court in case of PCIT vs Prahalad Singh ITA No.91 of 2019 (27.02.2020) 7. In this regard, ld. AR submitted that in the proforma of sanction for approv....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Micro Marbles Pvt Ltd vs ITO 457 ITR 569 11. On the other hand, ld. DR of the Revenue objected to the submissions made by the ld. AR and submitted that with regard to non-mention of date while sanctioning on the proforma of approval, he submitted that AO has recorded the date 27.03.2018, therefore, it cannot be argued that no date was mentioned in the sanction letter. With regard to supply of reasons, he submitted that it is already recorded in the assessment order and submitted that there is no record brought on record by the assessee whether the assessee has asked for the same during assessment proceedings and finally he heavily relied on the findings of the lower authorities. 12. Considered the rival submissions and material placed on record. Before us, ld. AR of the assessee made detailed submissions on other jurisdictional issues raised by the assessee. At the time of hearing, assessee has raised four jurisdictional issues before us which relate to obtaining/initiating proceedings u/s 148 and for obtaining the approval u/s 151 of the Act. As per the proforma for sanction/ approval u/s 151 of the Act brought on record by the assessee, for the sake of clarity, the same are....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hereto, the ld. AO had mentioned only 147(b). We find that the provisions of Section 147(b) has been omitted from the statute book long back and was certainly not in force for A.Y.2010-11. We find that the ld. CIT(A) without looking into these facts had accorded a mechanical approval without due application of mind. We find that reliance placed by the ld. AR on the decision of Hon'ble Jurisdictional High Court squarely clinches the issue before us in this regard in the case of Smt. Kalpana Shantilal Haria vs. ACIT referred to supra, wherein it was held that:- "6. The grievance of the petitioner is that there is no proper sanction in view of non application of mind by the Joint Commissioner of Income Tax. The Assessing Officer has invoked a provision of law to sustain the impugned notice which is admittedly not in the statute and the Joint Commissioner has yet approved it. 7. Mr. Chanderpal, learned Counsel appearing for the Revenue tendered a copy of the letter dated 19th December, 2017 issued to the petitioner wherein the Assessing Officer has stated that the words "147(b)" were inadvertently filled in the prescribed form, instead of Section 147 of the Act while ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dhya Pradesh High Court in the case of CIT Vs. S. Goenka Lime and Chemicals Ltd reported in 56 taxmann.com 390 (MP HC). The Special Leave Petition (SLP) filed by the revenue against this decision was dismissed by the Hon'ble Supreme Court reported in 64 taxmann.com 313. Further, we find that the Hon'ble Jurisdictional High court in the case of PCIT Vs. NC Cables Ltd reported in 391 ITR 11 (Del) had also held the same, wherein, the approving authority had merely stated "approved" in the proforma while granting approval in terms of section 151 of the Act. This approval was held by the Hon'ble Jurisdictional High court to be a mechanical approval. The relevant observation of the Hon'ble Jurisdictional High Court in this regard are reproduced herein:- "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, satisfaction has to be recorded of the given case which can be refl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s against the backdrop of these facts that one must arrive at a conclusion as to whether the AO had triggered the reassessment proceedings in accordance with well-established principles enunciated by the courts. 17.1 The first and foremost principle of law, to which the AO must be wedded, is the obligation cast on him to furnish material and information that helped him to form a belief that income, otherwise chargeable to tax, had escaped assessment. Admittedly, the AO had in his possession a letter dated 12.03.2018 addressed to him by ITO (Nahan), which in turn contained the intimation supplied by ADIT (Inv)/Unit-4(2). It appears that the information furnished suggested that cash deposits had been made in the account bearing no. 083005000211 maintained with the ICICI bank by Ram Singh, the proprietor of Para Impex Chem, out of which monies were remitted via RTGS to the two bank accounts of the petitioner/assessee maintained with HDFC Bank. Neither the letter nor the intimation of the ADIT(Inv)/Unit-4(2), New Delhi was furnished to the petitioner/assessee. 17.2 Although the petitioner/assessee has also flagged the issue that copies of the FIR and the chargesheet f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ring the "source of funds" reflected under various heads in the balance sheets for the preceding AY and the AY in issue. Furthermore, that there was a gap in the enquiry is evident from the following. First, the respondent/revenue emphasized the fact that information was sought from the petitioner/assessee via notice dated 20.03.2018 before it issued the impugned notice on 31.03.2018. The notice dated 20.03.2018 could not have reached the petitioner/assessee [and nothing to the contrary has been placed on record by the respondent/revenue] as concededly, it did not bear the complete address of the petitioner/assessee. Second, the AO did not even have the list of shareholders of the petitioner/assessee, as indicated in the "reason to believe". 19. We are of the opinion that the AO did not have the tangible material on record that could have persuaded him to form a belief that income, otherwise chargeable to tax, had escaped assessment. The AO did not carry forward the enquiry process once he had received communication from ITO (Nahan). As noticed above, the AO did not furnish either the letter dated 12.03.2018 received from ITO (Nahan) or the relevant intimation received fro....