TaxTMI 
TaxTMI 
2025 (10) TMI 417
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....s decided the M.A. filed by assessee wherein order of Co-ordinate Bench dated 04.01.2022 is recalled for the limited purposes of adjudication of three grounds of appeal taken in the original Form 36. These Grounds of appeal are bearing Nos.1.2, 1.8 & 5. The relevant observations of the Co-ordinate Bench in Para 16 of the order of MA are as under:- 16. "The facts in the present MA also similar to the above facts. We are inclined to follow the same and recall the order with limited purpose of adjudicating the specific three grounds. Therefore, we direct the Registry to post the case in due course." 3. Ground of appeal Nos. 1.2, 1.8 and 5 which were remained undecided in terms of the order of Tribunal order dated 04.01.2022, for which the case of the assessee is recalled, are as under:- 1.2. "That on the facts and in the circumstances of the case and in law. Ld CIT-A erred in sustaining the order passed by Ld AO u/s 147/143(3) without appreciating that no back material, repeatedly asked was confronted / provided to assessee thus invalidating entire reopening; 1.8 That on the facts and in the circumstances of the case and in law, Ld CIT(A) erred in sustain....
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....Sudha Surana ITA 1372/Kol/22024 (01.04.2025) 5. It is thus, prayed by Ld.AR that re-assessment proceedings being initiated on the basis of mechanical approval without independent application of mind by Ld. Pr. CIT deserves to be hold bad in law and consequent order passed to be annulled. 6. On the other hand, Ld.CIT DR for the Revenue supports the orders of lower authorities and submits that the Ld. Pr. CIT has granted approval on the basis of material available before him. Therefore, there is no question that no independent application of mind on the part of Ld. Pr. CIT who after appreciating each and every aspect of granting approval. Therefore, he prayed that the approval being valid deserves to be upheld. 7. Heard the contentions of both the parties and perused the material available on record. This issue is emerged out of the approval granted by Ld. Pr. CIT in prescribed Performa which is available in paper Book and is reproduced as under:- 8. It is seen that in aforesaid from, in Column 12, Ld. Pr. CIT has simply stated "I am satisfied" and put his signature without referring to the material which has been referred and discussed before granting the approval. 9.....
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....onsideration-Revenue's Appeals dismissed." 11. Hon'ble High Court of Delhi in case cited as SABH Infrastructure Ltd. vs. ACIT in WP (C) 1357/2016 order dated 25.09.2017 has issued guidelines to the Revenue authorities while granting the approval before issue of notice for reopening of assessment u/s 147/148 of the Act. Operative part of the order is reproduced as under:- "19. Before parting with the case, the Court would like to observe that on a routine basis, a large number of writ petitions are filed challenging the reopening of assessments by the Revenue under Sections 147 and 148 of the Act and despite numerous judgments on this issue, the same errors are repeated by the concerned Revenue authorities. In this background, the Court would like the Revenue to adhere to the following guidelines in matters of reopening of assessments: (i) while communicating the reasons for reopening the assessment, the copy of the standard form used by the AO for obtaining the approval of the Superior Officer should itself be provided to the Assessee. This would contain the comment or endorsement of the Superior Officer with his name, designation and date. In other words, ....
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....g 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." 13. Hon'ble Bombay High Court in the case of Saraswat Cooperative Bank Ltd. vs ACIT & Others [2025] 473 ITR 205 (Bom.) has held as under:- Sanction mechanism under section 151 21. Evidently, the reassessment was first proposed internally on March 24, 2021 by the jurisdictional Assessing Officer, and was recommended by a Range Officer on March 25, 2021, and approved by the Principal Commissioner of Income-tax on the same day all under section 151 of the Act. Therefore, the reassessment has b....
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....any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceeding under section 147, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the concerned assessment year. However, where an assessment under sub-section (3) of section 143 has been made for the relevant assessment year, no action can be taken under section 147 after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reasons of the failure on the part of the assessee to disclose all material facts necessary for his assessment for that assessment year. In the case in hand it is not in dispute that the assessment year involved is 1996-97. The last date of the said assessment year was March 31, 1997 and from that date if four years are counted, the period of four years expired on March 31, 2001. The notice issued is date....
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....ur years from the end of the assessment year 1996-97 and does not comply with the requirements of the proviso to section 147 of the Act, the Assessing Officer had no jurisdiction to reopen the assessment proceedings which were concluded on the basis of assessment under section 143(3) of the Act. On this short count alone the impugned notice is liable to be quashed and set aside." (emphasis¹ supplied) 25. Having regard to the foregoing and in view of the findings returned by us, the writ petition deserves to be allowed in the following terms: "(A) The order dated March 25, 2021 sanctioning the reassessment under section 151 of the Act; the impugned notice dated March 30, 2021 issued under section 148 of the Act; the impugned order dated February 25, 2022 rejecting the objections raised by the petitioner are declared to be arbitrary and devoid of valid reasons and, therefore, illegal; (B) Consequently, the order dated March 25, 2021 sanctioning the reassessment under section 151 of the Act; the impugned notice dated March 30, 2021 issued under section 148 of the Act; the impugned order dated February 25, 2022 and all consequential proceedings in respec....
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....51 of the Act in a printed format was placed before the Principal Chief Commissioner of Income-tax ("PCCIT") on March 20, 2023. The Principal Chief Commissioner of Income-tax granted the approval the same day. The approval accorded by the Principal Chief Commissioner of Income-tax in column 22 is extracted below: 22 Reasons for according approval/rejection by the specified authority to order under section 148A(d) and/or issuance of notice under section 148 of the Income-tax Act, 1961? Remarks: Approved under section 148A(d) as a fit case. Name: Rajat Bansal Designation :PCCIT, Delhi Date-20.03.2023 15. It is evident that the approval order is bereft of any reasons. It does not even refer to any material that may have weighed in the grant of approval. The mere appending of the word "approved" by the Principal Chief Commissioner of Income-tax while granting approval under section 151 to the reopening under section 148 is not enough. While the Principal Chief Commissioner of Income-tax is not required to record elaborate reasons, he has to record satisfaction after application of mind. The approval is f a safeguard and has to be meaningful and not merely rit....
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....e disturbed.' 18. Further, this court in the case of Central India Electric Supply Co. Ltd. v. ITO has taken a view that merely rubber stamping of 'Yes' would suggest that the decision was taken in a mechanical manner. Paragraph 19 of the said decision is reproduced as under (page 245 of 333 ITR): 'In respect of the first plea, if the judgments in Chhugamal Rajpal v. S. P. Chaliha, Chanchal Kumar Chatterjee v. ITO and Govinda Choudhury and Sons v. ITO are examined, the absence of reasons by the Assessing Officer does not exist. This is so as along with the pro-forma, reasons set out by the Assessing Officer were, in fact, given. However, in the instant case, the manner in which the proforma was stamped amounting to approval by the Board leaves much to be desired. It is a case where literally a mere stamp is affixed. It is signed by an Under Secretary underneath a stamped Yes against the column which queried as to whether the approval of the Board had been taken. Rubber stamping of underlying material is hardly a process which can get the imprimatur of this court as it suggests that the decision has been taken in a mechanical manner. Even if the rea....
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.... thereunder. We are of the opinion that if only he had read the report carefully, he could never have come to the conclusion on the material before him that this is a fit case to issue notice under section 148. The important safeguards provided in sections 147 and 151 were lightly treated by the Income-tax Officer as well as by the Commissioner. Both of them appear to have taken the duty imposed on them under those provisions as of little importance. They have substituted the form for the substance.' 20. This court, while following Chhugamal Rajpal v. S. P. Chaliha in the case of Ess Advertising (Mauritius) S. N. C. Et Compagnie v. Asst. CIT (International Taxation), wherein, while granting the approval, the Assistant Commissioner of Income-tax has written: This is fit case for issue of notice under section 148 of the Income-tax Act, 1961. Approved, had held that the said approval would only amount to endorsement of language used in section 151 of the Act and would not reflect any independent application of mind. Thus, the same was considered to be flawed in law." 15. In view of the above facts and looking to the approval granted by Ld. Pr. CIT, we find that Ld. Pr.....