TaxTMI 
TaxTMI 
2024 (3) TMI 1493
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....rincipal Commissioner of Income Tax-15 seeks to impugn the order dated 08 May 2023 passed by the Income Tax Appellate Tribunal ["ITAT"] for Assessment Year ["AY"] 2007-08 and has proposed the following questions of law for our consideration: - "3.1 Whether on the facts and circumstances of the case and in law, Ld. ITAT erred in confirming the order passed by the Ld CIT(A) in the case of respondent-assessee. 3.2 Whether on the facts and circumstances of the case and in law, Ld ITAT erred in ignoring the fact that approval u/s 151 of the Act was granted by Addl CIT after being satisfied. 3.3 Whether on the facts and circumstances of the case and in law, Ld ITAT erred in observing that Additional CIT has not recorded....
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....raised by Respondent- Assessee only at a later stage, which were disposed of through a speaking Assessment Order, hence the dictum of GKN Driveshafts (India) Ltd. v. ITO (supra) and other similar authorities does not apply in the present case, and non-disposal of objection vide a separate order was a mere irregularity which cannot tantamount to nullity?" 2. The issue itself emanates consequent to the initiation of proceedings referable to Section 147 of the Income Tax Act ['Act'] and which in turn was based on a report/information submitted by the ADIT (Investigation). The Commissioner of Income Tax (Appeals) ['CIT(A)'] had while considering whether the Assessing Officer ['AO'] had duly applied its mind and if circumstances warranted reo....
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.... Hon'ble Court that at the stage when reasons are recorded for reopening the assessment, the Assessing Officer is not required to build a fool-proof case for making addition to the assessee's income; all that he is required to do at that stage is to form a prima-facie opinion or belief that income has escaped assessment. The relevancy of the material before the Assessing Officer is to be judged only from that perspective and not from the perspective as to whether the material is sufficient or adequate to sustain the addition ultimately. Similar view has been taken by Hon'ble court in other case Contel Medicare Systems P. Ltd. vs. CIT, 349 ITR 649, wherein the reopening was initiated on the basis of information received by AO fro....
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....the unambiguous provisions of this section clearly mandate that Joint Commissioner has to get himself 'satisfied' with the reasons recorded by AO before issuing notice and such satisfaction has to be recorded in writing in clear terms in the light of material relied upon by the AO. However, in the case of appellant, Addl. CIT has "approved" the proposal of AO for issuing notice u/s 148 of the Act. He has not recorded his satisfaction towards the reasons recorded by AO. Thus, merely affixing "approved" in mechanical manner without verifying/examining the material relied upon by AO cannot be termed as sanction as required u/s 151 of the Act. This view is supported by Hon'ble Jurisdictional High Court in the case United Electrical ....
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....l which was accorded in terms of Section 151 of the Act would also not meet the principles as laid down by a series of decisions rendered by different High Courts. Those decisions have consistently held that merely stamping the word 'approved' would not be sufficient to establish due application of mind by the approving authority. 4. Dealing with the aforesaid aspects, the ITAT has observed as follows: - "4.5 The third objection raised by appellant is that reassessment proceedings are bad in law and without Jurisdiction as the objections raised by appellant were not disposed of by AO in terms of judgment of Apex Court in the case of GKN Driveshaft (India) Ltd. vs ITO 259 ITR 19. I have gone through the objections of appellant. T....
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....response to which, assessee filed a reply dated 24.08.2012 wherein it was mentioned that return already filed on 31.03.2008 vide Acknowledgement No. 265 be treated as having been filed in response to the said notice. Thereafter, reasons recorded were supplied by AO to the appellant and she, vide letter dated 03.02.2014, filed objection to the reopening of the case. However, the assessment proceedings as well as remand proceedings do not reflect that objections filed by appellant were disposed of by the AO. It appears that the objections raised by appellant has been dealt with by AO in the assessment order itself. No separate order, disposing of the objections raised by appellant, has been passed. Thus, the AO has failed to follow the proced....