TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 936
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....appeal in ITA No. 1084/Hyd/2025 for the A.Y 2014-15 is taken as lead case. 2. The assessee has raised identical grounds for all these six years except some extra grounds raised for the A.Y 2019-20. The grounds of appeal in ITA No. 1084/Hyd/2025 are reproduced as under: "1. On the facts and circumstances of the case, the Learned CIT(A) erred in both law and facts while passing the Order. 2. On the facts and circumstance of the case, Learned CIT(A) is not justified in dismissing the ground that the issue of Notice U/ s 148 by the Assessing Officer is without Jurisdiction. 3. On the facts and circumstances of the case, Learned CIT(A) is not justified in dismissing the ground that the issue of Notice u/s 148 by the Assessing Officer is bad in law as the Assessing Officer has not fulfilled the prescribed conditions laid down under Section 148 and consequently the Assessment is void ab initio. 4. On the facts and circumstances of the case, Learned CIT(A) is not justified in dismissing the ground that the notice issued u/s 148 and consequent Assessment is in valid in law as the Assessing Officer has not complied the provisions of Section 149 of the I....
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....ts containing details of several hundreds of transactions representing receipts and payments in cash were found recorded for several financial years. Sri Ramesh Kumar Sanka in his statement explained that the transactions recorded in the Focus 5.5 software is unaccounted receipts generated from sale of scrap, scrap of intermediate mixing products, scrap generated in packing products etc. This software also contains the expenditure incurred in cash for all the three companies put together specifically for the purpose of business. This software also includes loans given and repaid back and some Contra entries etc., Based on the unaccounted transactions the MD of the group admitted unaccounted income of Rs. 107.63 crores for the three companies put together. Out of such unaccounted income, an amount of Rs. 42.15 crores pertained to the appellant company. For the year under consideration i.e. A.Y 2014-15 the Appellant company admitted an amount of Rs. 1.13 crores. However the Assessing Officer has made further addition of Rs. 0.27 lakhs. 4. Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before Learned CIT(Appeals). During the course of appeal proce....
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....iple of law that where the power is given to do certain things in certain way, the thing has to be done in that way alone and not in other manner which is otherwise not provided in the law as held by the Hon'ble Supreme Court in the case of Chandra Kishore Jha vs. Mahaveer Prasad (1999)8 SCC 266 as well as in case of Cherrukuri Mani v. Chief Secretary, Govt. of A.P (2015) 3 SCC 722. The learned Counsel for the assessee has submitted that the Hon'ble Supreme Court has held time and again that where the law prescribe the things to be done in a particular manner following a particular procedure, it shall have to be done in the same manner following the principles of law without deviating from the prescribed procedure. He has relied upon the judgment of the Hon'ble Bombay High Court in the case of Municipal Corporation Greater Mumbai (MCGM) vs. Abhilash Lal (2019) 111 taxmann.com 405 as well as in case of Opto Circuit India Ltd vs. Axis Bank (2021) 127 Taxmann.com 290. Therefore, if law require something to be done in a particular manner, then it must be done in that manner; if it is not done in that manner then it would have no existence in the eyes law. By following the s....
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....sessment is Rs. 50 lakhs or more for each of the A.Ys taken up for initiation of proceedings u/s 147/148 of the Act. He has referred to the reasons recorded for reopening of the assessment placed at page No.9 of the Paper Book and submitted that the Assessing Officer in the reasons recorded has not pointed out which asset is constituting the income assessable to tax escaped the assessment. Further, the details of the receipts and payments as found in the laptop during the search are not the entries in the books of account and therefore, the said condition as provided u/s 149(1)(b) of the Act is also not satisfied for initiation of proceedings u/s 147/148 of the Act. In support of his contention, he has relied upon the decision of the Rajkot Bench of the Tribunal dated 10/06/2025 in the case of Mukesh Manekchand Sheth vs. Dy.CIT in ITA Nos.581, 545 to 547/RJT/2024 and submitted that the Tribunal has stated the exercise of jurisdiction u/s 147/148 of the Act in pursuant to the search & seizure action is not meant to determine during the re-assessment as to whether an item represents an asset or an expenditure or whether it exceeds a threshold limit of Rs.50 lakhs. Such exercises is r....
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..... The alleged material which is the basis of reopening of the assessment does not reveal the fact that the income escaped the assessment represents the asset or expenditure or an entry/entries in the books of account of the assessee for any of the years under consideration. In support of his contention, he has relied upon the judgment of the Hon'ble Supreme Court in case of Chhuganmal Rajpal vs. SP Chaliha (1971) 79 ITR 603 as well as the judgment of the Hon'ble Andhra Pradesh High Court in the case of P Munirathnam /Chetty and P. Satyanarayana Chetty vs. Income Tax Officer (1975) 101 ITR 385. Thus, the learned Counsel for the assessee has submitted that the exercising power u/s 151 of the Act in a casual and routine or mechanical manner without application of mind is not a valid sanction. He has relied upon the following case laws: i) CIT vs.S Goyanka Line & Chemical Ltd (2015) 56 Taxmann.com 390 (MP) ii) CIT vs.S Goyanka Line & Chemical Ltd (2015) 64 Taxmann.com 313 (SC) iii) United Electrical Co (P) Ltd vs. CIT (2002) 258 ITR 317 iv) SBC Minerals (P) Ltd vs. ACIT (2024) 475 ITR 360 v) P Munirathnam Chetty and P Satyanarayana C....
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....suing notice u/s 148, the Assessing Officer only have prima facie satisfied that the income amounting or exceeding Rs. 50 lakhs may have escaped the assessment. He has further submitted that the Hon'ble High Court has held that at the time of issuance of notice u/s 148, the Assessing Officer may not have the occasion to undertake a detailed or in depth examination of the evidence collected or come to a definite information with respect to the total income which may have escaped the assessment. Since the computation and estimation of income i.e. likely to have escaped the assessment would at this stage be provisional and the proceedings initiated for re-assessment cannot be quashed on this objection. The learned DR has further submitted that the seized material had found in the Laptop of the Sr. Accounts Manager of the assessee during the search, however, a separate warrant was required for search of the premises of the individual persons, though part of the assessee's group of concern. He has relied upon the judgment of the Hon'ble Madras High Court in case of S.R. Trust vs. ACIT dated 12/03/2021 in Writ Petition No.2221 of 2018 and submitted that the material seized by....
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.... of the Undisclosed Income Detected 2014-15 1,62,60,027 1,13,43,528 2015-16 6,08,84,018 4,24,74,689 2016-17 17,43,34,114 12,16,21,199 2017-18 8,21,89,996 5,73,38,438 2018-19 9,79,67,978 6,83,45,676 2019-20 3,78,69,796 2,64,19,212 2020-21 5,95,94,164 4,15,74,845 2021-22 3,00,82,983 2,09,86,875 2022-23 114,26,53,017 85,36,56,501 2023-24 1,61,80,065 1.12,87,744 Total 171,80,16,158 125,50,48,707 3. In view of the above, there is information which suggests that income chargeable to tax has escaped assessment in the case of the assessee company and this office is in possession of books of accounts or other documents or evidence which reveal that the income chargeable to tax represented in the form of an asset and an entry or entries in the books of account, as per the provisions of Sec.149(1)(b) of the Act, which has escaped assessment amounts to more than Rs.50 lakhs. 4. Considering the above information and based on material available on record, it is held that the case of the assessee company M/s Ace Tyres Private Limited is a fit case for issue of notice u/s. 148 for A....
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....tiya Estates, Near Nagarjuna High School, Rajeev Nagar, Khairtabad, Hyderabad is reproduced as under: ....................... 15. It is pertinent to mention that the statement of Shri Ramesh Kumar Sanaka, Sr. Accounts Manager of the assessee was recorded on 4th to 6th January, 2023 in pursuant to the search & seizure action conducted in the case of Shri Ramesh Kumar Sanaka at his Flat bearing No.401 vide warrant of authorization dated 03/01/2023 and Panchama as under: 16. Therefore, there is a separate authorization and Panchanama for conducting the search & seizure action in case of Shri Ramesh Kumar Sanaka at his residential premises beairng Flat No.401, Chestiya Estates, Rajeev Nagar, Hyderabad during which external harddisk having copied the data from the Lap Top of Shri Ramesh Kumar Sanaka and loose sheets were seized and the same are marked as A/RKS/RES/01, A/RKS/RES/02 and A/RKS/RES/03 as per the list of seized material being Annexuere A to Panchanama reproduced above. It is also clear from the statement that the search was conducted in the personal capacity of Shri Ramesh Kumar Sanaka at his residential premises and his personal belongings, assets, bank account loc....
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....cer has also admitted this fact that the unaccounted cash receipts as well as expenditure could not be attributed to specific companies and therefore, the Assessing Officer has apportioned the unaccounted cash receipts in the ratio of the turnover of these various entities including the assessee in para 7.32 as under: 7.32 As detailed above, Shri G.Raghunath Reddy in his submissions during the course of post search enquiries was categorical in stating that the 'unaccounted' cash receipts' generated at various locations cannot be ascribed to any one entity with certainty as they had a centralized monitoring system to oversee the generation of cash and utilization of the same. Accordingly, the group had apportioned the 'unaccounted cash receipts' and the resultant 'undisclosed incomes' worked out and admitted in the hands of the active entities, in accordance with the turnovers recorded for different assessment years. Following the proportion adopted by the assessee in distribution of additional income of Rs. 107,63,08,796/- to different corporate entities of the group, the amount of Rs. 154,28,01,275/- was worked out as follows: FIN.YEAR EX....
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....to each of the entity and further the nature of these receipts and payments so as to arrive at the correct and net figure of unaccounted income in the hands of the assessee being escaped the assessment. Some of the transactions of receipts may not be in the nature of the income being the transactions of loan and similarly, some of the payment transactions may not be in the nature of the expenses, if the payments are in the nature of loans or advances in cash. Even if all the transactions of receipts are considered as income/revenue and all the payments are considered as the expenditure which are business receipts and expenditure and incidental for earning the said income duly recorded in the seized material, then only the net amount of these receipts and payments out of books can be regarded as unaccounted/ undisclosed income of the assessee. Taking only one side of the details on the part of the Department is a highly arbitrary. The Department cannot make an addition over and above the surrender of income made by the assessee during the course of search & seizure action if the said surrender of income itself is not based on the correct facts and backed by the seized material. 2....
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....earch is inilialed under section 132; or (b) a search under section 132 for which the last of authorisations 1s executed; or (c) requisition is made under section 132A, after the 15th day of March of any financial year and the period for issue of notice under section 148 expires on the 31st day of March of such financial year, a period of fifteen days shall be excluded for the purpose of computing the period of limitation as per this section and the notice issued under section 148 in such case shall be deemed to have been issued on the 31st day of March of such financial year: Provided also that where the information as referred to in Explanation 1 to section 148 emanates from a statement recorded or documents impounded u/s 131 or section 133A, as the case may be, on or before the 31st day of March of a financial year, in consequence of: (a) a search u/s 132 which is initiated; or (b) a search u/s 132 for which the last of authorization is executed or (c) a requisition made u/s 132A Provided also that for the purposes of computing the period of limitation as per this section, the time or extended time allowed to the ass....
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....scaped the assessment amount to or likely amounts to fifty lakh rupees or more. In the case in hand, undisputedly the notice issued u/s 148 of the Act for the A.Y 2014-15 to 2018-19 were issued after 3 years from the end of the relevant A.Y. Therefore, until and unless the conditions as stipulated in clause (b) of section 149(1) of the Act are satisfied, the notice issued u/s 148 of the Act would be invalid being bartred by limitation provided u/s 149(1) of the Act. 23. The Assessing Officer in the reasons recorded for reopening of the assessment stated that the income chargeable to tax represented in the form of an asset and an entry/entries in the books of account as per the provisions of section 149(1)(b) of the Act. Therefore, the Assessing Officer proposed to bring the case of the assessee in sub-clause(i) and sub-clause (iii) of clause (b) of section 149(1) of the Act. From the details of the transactions as found in the Laptop, it is clear that these are receipts and payments in cash and no corresponding cash or any other assets were found during the coruse of search and seizure action representing these enbtries. It is not the case of either party that these transactions....
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.... that the details of unaccounted cash receipts and cash payments found during the course of search & seizure action were not specifically attributed to each of the group companies and further only the receipts found in the said seized material are taken into consideration for arriving to the conclusion that the income of more than Rs. 50 lakhs for each of the companies has escaped assessment. The Assessing Officer has proceeded on the basis of the details provided by the ADIT (Inv) and not proceeded on the basis of the seized material containing these transactions of unaccounted cash receipts and payments. The reasons recorded by the Assessing Officer manifest that no such minimum verification was done by the Assessing Officer regarding the nature of the transaction, the net outcome of the receipt and payment as recorded in the said seized material, apportionment of the amounts of receipts and payments to each of the group companies to quantify the income escaped assessment for the A.Ys 2014-15 to 2018-19. Thus it is a simple case of non-application of mind and a borrowed satisfaction on the part of the Assessing Officer while recording the reasons for reopening. 25. Apart from ....
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....the assessee does not fall in the first proviso to section 148A of the I.T. Act. We have already reproduced the search warrant/ authorization separately issued in the name of Shri Ramesh Kumar Sanaka for conducting a search at his residential premises. The search in the case of the assessee and other group concerns was carried out under a separate authorization and warrant of search. It is evident from the Panchanama and authorization separately given that there are two search and seizure operations conducted by the Department, one in the case of 5 companies of Exel Group of Companies including the assessee and another in the case of Shri Ramesh Kumar Sanaka, Sr. Accounts Manager of the Exel Group at his residential premises. Both these searches were also conducted at different placed. The only common thread between these 2 search operations is that Shri Ramesh Kumar Sanaka is a Sr. Accounts Manager of Exel group of companies, however, the said relation between Shri Ramesh Kumar Sanaka and the assessee company cannot obliterate the fact of 2 separate search & seizure operations. Section 148A casts an obligation on the Assessing Officer to conduct an inquiry with the prior approval ....
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.... is received by him, or where no such which reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: Provided that the provisions of this section shall not apply in a case where, (a) search is initiated u/s 132 or books of account, other documents or any assets are requisitioned u/s 132A in the case of the assessee on or after the 1st day of April, 2021: or (b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, Jewellery or other valuable article or thing, seized in a search under Section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st Day of April, 2021, belongs to the assessee; or (c) the Assessing Officer is satisfied with the prior approval of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search under section 132 or requisitioned under section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, 70 re....
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....ma sent by the Assessing Officer placed at page Nos. 35 to 37 of the paper book as under: 28. Though there is a recommendation by the Pr. CIT, however, the sanction/approval granted by the DG reveals that it has concurred with the proposal that the impugned matter covered u/s 149(1)(b) of the Act and issue of notice u/s 148 is approved. This sanction/approval granted by the DGIT (Inv) Hyderabad in the light of the facts as discussed in the preceding part of this order clearly shows that the crucial aspects of the matter were overlooked while granting the sanction/approval. The seized material was found and seized from the possession of one Shri Ramesh Kumar Sanaka in a separate search & seizure operation which is the very basis of the initiation of the proceedings. However, the proceedings are initiated on the premises that the seized material is found from the possession of the assessee during the search & seizure operation of the assessee. The other glaring aspect of the matter is that only the receipt side of the details of the transactions found in the Laptop of Shri Ramesh Kumar Sanaka are taken into consideration without proper appropriation/allocation of these receipts to....
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....ding of the reasons and then issue of notice pursuant to the reasons. The show cause notice (SCN) having used both the phrases at a time, it suffers from vagueness and demonstrates absence of initial judgment itself, as to whether the information represents assessee's asset or expenditure. As a result, the notice becomes bad in law and assessment order deserves to be quashed. The exercise of jurisdiction u/s the new sections 147 and 148 of the Act, is not meant to determine during reassessment, as to whether an item represents an asset or an expenditure or whether it exceeds the threshold of Rs. 50 lakhs. The said exercise is required to be carried out prior to or at the time of recording the satisfaction and the reasons and while obtaining the requisite approvals of higher authorities. Obviously, this has not been done and hence the notice suffers from an inherent jurisdictional lack of power. The assessee submitted before the assessing officer that in the assessee's case, no 'asset' or 'expenditure' is identified in the entire Annexure (Reason) and hence, reopening of the case beyond the prescribed time-limit is patently illegal. The clause no. (b) of sect....
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....suing notice under section 148, is clearly unsustainable and we find that on such consideration both the appellate authorities have interfered into the matter. In doing so, no error has been committed warranting reconsideration. 9. As far as explanation to Section 151, brought into force by Finance Act, 2008 is concerned, the same only pertains to issuance of notice and not with regard to the manner of recording satisfaction. That being so, the said amended provision does not help the revenue. 10. In view of the concurrent findings recorded by the learned appellate authorities and the law laid down in the case of Arjun Singh (supra), we see no question of law involved in the matter, warranting reconsideration." 31. Thus, the Hon'ble High Court has held that granting the sanction mechanically in order to discharge the statutory obligation goes to indicate that the authority did not apply its mind while granting the sanction. The satisfaction has to be with the objectivity on the objective material. Therefore, the Hon'ble High Court has upheld the quashing of the notice u/s 148 on the ground of mechanical way of recording the satisfaction while granting s....
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.... Commissioner of Income-tax (Supra), the Hon'ble Delhi High Court while considering an identical issue has held in para 14 and 15 as under: "14. Perusal of the record reveals that the request for approval under section 151 of the Act in a printed format was placed before the Principal Chief Commissioner of Income-tax ["PCCIT"] on 20-3-2023. PCCIT granted the approval the same day. The approval accorded by the PCCIT in Column No. 22 is extracted below :- 22 Reasons for according approval/rejection by the specified authority to order u/s 148A(d) AND/OR issuance of notice under section 148 of the Income-tax Act, 1961? Remarks: Approved u/s 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 PCCIT while granting approval under section 151 to the re-opening under section 148 is not enough. While the PCCIT is not required to record elaborate reasons, he has to record satisfaction after application of mind. The approval is a ....
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.... bogus. The Income- tax Officer did not even come to a prima facie conclusion that the transactions to which he referred to are not genuine transactions. He appeared to have only a vague feeling that they may be bogus transactions. Further, in his report he stated, "hence proper investigation regarding these loans is necessary". In those circumstances the Supreme Court pointed out that the conclusion of the Income-tax Officer was that there was a case for investigation as to the truth of the alleged transactions which is not the same thing as saying that there are reasons to issue notice under section 148. In this case, however, the Income-tax Officer refers to the order of the sales tax authority determining a turnover at a higher figure and levying penalty for the suppression of turnover. On the basis that the turnover has been suppressed he was prima facie entitled to assume on the strength of the order of the sales tax authorities, the Income- tax Officer had reasonable grounds to say that there was omission or failure on the part of the assessee to disclose fully and truly the material facts necessary for the purpose of computation of the correct income. This is not a case whe....
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....h the Commissioner might have said against column 8 that he was so satisfied. But, in this case, I am unable to say that the Commissioner could not have applied his mind or could not have been satisfied. The form like the one which is being used containing an endorsement merely saying "Yes" would justifiably cause apprehension that the act of the Commissioner is a mechanical act. In order to obviate this impression and to infuse more confidence in the assessee, it would be proper if the Commissioner also briefly states why he has given his sanction to the proceedings under section 147, thus avoiding all arguments in courts of law whether he applied his mind or he would have been satisfied in the circumstances of the case or not. The writ petition is dismissed but in the circumstances without costs." 37. It was held by the Hon'ble High Court that merely putting the word 'yes' against the column would not satisfy the requirement of section 151 of the I.T. Act. 38. The Hon'ble Delhi High Court in the case of Pr. CIT vs. Pioneer Tower Planners Pvt. Ltd (456 ITR 356 (Del) has explained the proposition of law in para and 20 & 21 as under: "20. This....
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....r the form of approval was obtained from the Additional CIT, Range-VI, Pathankot is concerned, we are of the considered view, that the said assertion of the ld AR is based on misconceived and half- baked facts. As stated by the Ld DR, and rightly so, as the Commissioner of Income-tax Range-VI, Pathankot was at the relevant point of time holding the charge as that of the Additional CIT, Range-VI, Pathankot, therefore, it was incorrect on the part of the ld AR to claim that the AO had obtained the approval from an authority different from that as stated in the body of the "reasons to believe". We, thus, finding no substance in the aforesaid claim of the ld AR are constrained to reject the same. 8. Adverting to the claim of the ld AR, that the authority granting the sanction u/s 151 of the Act, viz. Addl. CIT, Range- VI, Pathankot had granted the approval in a mechanical manner, i.e, without application of mind, we find substance in the same. On a perusal of Column No. 12 of the form of approval wherein sanction had been granted by the Additional CIT, Range-VI, Pathankot, we find that the same reads as under :- 12 Whether the Additional Commissioner of Income Tax is sat....
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....f the Act. In our considered view, mere scribbling of "Yes" by the approving authority can by no means suffice the statutory obligation cast upon him for granting approval after due application of mind for issuance of notice u/s 148 of the Act by the AO, because, if that be so, then, the said statutory check on the part of the superior authorities would be rendered as mere an idle formality, nugatory or in fact nothing better than an eye wash, which would beyond any doubt defeat the very purpose for which the said supervisory jurisdiction of the superior authorities had been made available on the statute by the legislature. Our aforesaid conviction is supported by the recent order of this Tribunal in the case of Shri Charanjiv Lal Aggarwal, Prop. M/ s. Premier Rubber Mills, Amritsar Vs. ITO, Ward-4(1), Amritsar, ITA No. 598/Asr/2015. Also, a similar view had been taken by this Tribunal in the case of S/ shri Tralochan Singh & Narotam Singh Vs. ITO, Ward 1(4), Mansa in ITA Nos. 306 & 307/ASR/2019, dated 30.06.2021, wherein it was held as under :- "12. As regards to the validity of the reassessment proceedings under section 147 r.w.s 148 of the Act, it is not in dispute that....
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....i High Court in the case of Ladhuram Laxmi narayan Vs. ITO, Additional 102 ITR 595 (supra) held as under: 22. Sub-section (2) of Section 151 requires that before issuing a notice under Section 148, the Commissioner must be satisfied on the reasons recorded by the Income-tax Officer that it is a fit case for the issue of such notice. The submission of the learned counsel is that in the instant case there was no real satisfaction of the Commissioner or in other words there could not be satisfaction of the Commissioner as contemplated under Subsection (2) in the facts and circumstances of the case. In the column of the report whether the Commissioner was satisfied, the Additional Commissioner said " Yes ". 23. We have already found that the first ground given by the Income-tax Officer in his report praying for sanction for acting under Section 148 is admittedly a mistaken ground and, therefore, non-existent. That being so, the satisfaction of the Additional Commissioner in the instant case, so far as the first ground is concerned, is wholly mechanical without applying his mind. It has further been held 24. Regarding the second ground, we find that t....
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....nsidered the rival contentions, and we find that while according to sanction, the Joint Commissioner, Income Tax has only recorded so "Yes, I am satisfied". In the case of Arjun Singh (supra), the same question has been considered by a Coordinate Bench of this Court, and the following principles are laid down :-- The Commissioner acted, of course, mechanically in order to discharge is statutory obligation properly in the matter of recording sanction as he merely wrote on the format "Yes, 1 am satisfied" which indicates as if he was to sign only on the dotted line. Even otherwise also, the exercise is shown to have been performed in less than 24 hours of time which also goes to indicate that the Commissioner did not apply his mind at all while granting sanction. The satisfaction has to be with objectivity on objective material. 8. If the case in hand is analysed on the basis of the aforesaid principle, the mechanical way of recording satisfaction by the Joint Commissioner, which accords sanction for issuing notice under section 148, is clearly unsustainable and we find that on such consideration both the appellate authorities have interfered into the matter. In doi....
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....legal issue in favour of the assessee therefore no finding is given on the other grounds raised by the assessee on merit." Also, we find that a similar view had been taken by the ITAT, Chandigarh Bench in the case of Shri. Tek Chand Vs. The ITO, Ward-2, Karnal, ITA No. 255/Chd/2020, dated 15.03.2021. In the said case the approving authority, i.e., Principal CIT, Karnal had granted the approval for issuance of notice u/s 147 of the Act, as under :- "Yes, satisfied, it is a fit case for issue of notice under section 148 -Sd/- Pr. CIT, Karnal" The Tribunal by drawing support from the judgments of the Hon'ble High Court of Madhya Pradesh in case of CIT Vs. S. Goyanka Lime & Chemical Ltd (2015) 56 taxmann.com 390 (MP) and that in the case of Arjun Singh Vs. Asst. DIT reported in (2000) 246 ITR 363 (MP), had observed, that as the reopening of the case of the assessee u/s 148 was on the basis of a mechanical approval, i.e, without application of mind by the Principal CIT. Therefore, the reopening of the case on the basis of the notice issued u/s 148 could not be sustained and was liable to be quashed. At this stage, we may herein observe, t....
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....he approval of the specified authority granted in a mechanical way renders the reopening of the assessment itself bad in law. Accordingly, in view of the facts and circumstances as cited above and various decisions as stated above, we hold that the reopening of the assessment is not valid and liable to be set aside. Apart from the invalid approval/sanction u/s 151 of the Act, the Assessing Officer has also failed to bring the case in the category where mandatory conditions u/s 149(1)(b) of the Act are satisfied for initiation of proceedings u/s 147/148 of the Act after the expiry of 3 years from the end of the relevant A.Ys and therefore, the reopening of the assessment for want of the satisfaction of mandatory condition u/s 149(1)(b) of the Act is also invalid and liable to be quashed. We order accordingly. ITA No.1207/Hyd/2025 A.Y 2019-20 42. The assessee has raised the following grounds of appeal: "1. On the facts and circumstances of the case, the Learned CIT(A) erred in both law and facts while passing the Order. 2. On the facts and circumstance of the case, Learned CIT(A) is not justified in dismissing the ground that the issue of Notice U/s 148 by the....
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....n response to which the assessee has filed the return of income on 15/11/2023. However, the Assessing Officer dropped the re-assessment initiated vide notice u/s 148 dated 18/03/2023 and issued a fresh notice u/s 148 on 14/11/2024. Thus, the assessee has challenged the notice issued by the Assessing Officer u/s 148 on 14/11/2024 which is after 3 years from the end of A.Y under consideration on the similar grounds and contention as raised against this notice u/s 148 for the A.Y 2014-15 to 2018-19 as well as on the ground that in the absence of any fresh material after dropping of the earlier proceedings, the Assessing Officer has no jurisdiction to issue a 2nd notice u/s 148 of the Act. Further, the assessee has also challenged the validity of the second notice issued u/s 148 dated 14/11/2024 on the ground that while issuing this notice, the Assessing Officer cannot assume jurisdiction as per the proviso to section 148A of the Act. The learned Counsel for the assessee has submitted that once the original proceedings initiated vide notice u/s 148 dated 18/03/2023 were dropped by the Assessing Officer, then the second notice issued u/s 148 on 14/11/2024 is invalid as the Assessing Off....
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....onsideration and consequently, the notice issued u/s 148 of the Act on 14/11/2024 is held as invalid and liable to be quashed. 48. Since this notice u/s 148 of the Act, dated 14/11/2024 was issued after dropping the proceedings initiated by the Assessing Officer vide notice u/s 148 dated 18/03/2023, therefore, in our considered opinion, the Assessing Officer cannot initiate the fresh proceedings u/s 147/148 of the Act on the basis of the same material and facts after the proceedings initiated earlier vide notice u/s 148A of the Act dated 18/03/2003 were dropped by the Assessing Officer. The reasons for dropping of the proceedings were not beyond the control of the Assessing Officer. The Assessing Officer has given the reasons that notice u/s 143(2) was issued, however, non-issuance of notice u/s 143(2) leads to the inference and conclusion that the Assessing Officer did not choose to scrutinize the return of income filed by the assessee in response to the notice issued by the Assessing Officer u/s 148 dated 18/11/2023 and thus, proceedings stands dropped/closed by accepting the return of income. In the absence of fresh material or change in the facts, the Assessing Officer canno....
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....anufactured with the raw material supplied by these companies and as per their specifications. M/s LMPL is into the business of manufacturing of machinery related to tire industry and also maintenance of machinery of our group companies viz. ATPL and ERPL. M/s STPL is also into the business of manufacturing of two/three tires. The company does job work for the companies Apollo and Michelin tires. It manufactures the tires using the raw material supplied by them and as per their specifications. M/s VPPL is into the business of manufacturing of automotive flaps. The company does the job for the CEAT tire company using the raw material supplied by them and as per their specifications. Further, the company also does the job work for Apollo and Bridgestone using the raw material purchased by us and as per their specifications. Q.9 Please explain your role and responsibilities in the company M/s ERPL and in overall Exel group of business concerns. Ans. I am working as Sr. Manager (Accounts) in the company, M/s Exel Rubber Private Limited. I prepare quotations to the customers quarterly for the material manufactured by the company. I prepare CMA (Credit Monetary Appraisal) ....
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....re-A/RKS/RES/01 in my presence. 1 Q.59 I am showing you an excel workbook named "CASH ACE 20-21" found in the folder named "CASH" on desktop of your Dell laptop which was found during the course of search and seizure proceedings at this premise. Please confirm the same and explain the contents in it. Please also state that the transaction in the excel workbook were recorded in the books of accounts. Ans. Yes sir, I confirm that an excel workbook named "CASH ACE 20-21" found in the folder named "CASH" on desktop of my Dell laptop. The excel workbook contains the details of receipts and payments made in cash for the FY 2020-21 of M/s ATPL. This excel workbook was created by Sri Jwala Prasad, Asst. Manager (Accounts) and records in it were updated by me and him. The transactions mentioned in this excel workbook were not recorded in the books of accounts of M/s ATPL. These transactions were downloaded from Focus 5.5 software maintained in my laptop and the complete transactions are available in the software. 1 06/01/2 25 61/23 Document 6 Q.60 I am showing you excel workbooks named "CASH ACE 21-22", "CASH EXEL 20-21", "CASH EXEL 21-22" and "CASH VILAS 21-22" found in the....
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.....से. B. DINESH ADITYA. :. R.S. Deputy Director of Income Tax (inv.) FIZ-1(3), 24RTZ / Unit-1(3), Hyderabad 1-2: A 06/1/23 (S.RAMESH KUMAR) 1 Document 8 PANCHANAMA Party No. H O (A) Warrant in the case of M/s Ramesh Kumar Sanaka (B) Warrant to search .. Flat No. 401, Chestiya Estates, Near Nagarjuna High School, Rajeev Nagar, Khairatabad, Hyderabad - 500045. (Details & Ownership of place of search) Telephone Numbers (C) (A) and (B) stated to be assessed by (D) Search party consisting of SI No Name Designation Office 01 Bandla Dinesh Aditya DDIT (Inv.) Unit-1 (3), Hyderabad 02 Vavilala Rakesh Kumar ITI 0/o The DDIT(Inv.), Unit-1(3), Hyderabad. 03 Jaya Rama Raju G ITI 0/o The Addi. CIT(Inv.), AU-4(3), Hyderabad. 04 G. Ganga Mallesh Steno 0/o The JCIT(BPU), Unit-1, Hyderabad 05 B. Ramesh MTS O/o The Addl. CIT, Range-1, Hyderabad (E) Name and complete address of Panchas : 1. Sri P. Madhusudhan Rao, Flat No. 301, Varija Enclave, Gudimalkapur, Mehdipatnam, Hyderabad - 500063. 2. Sri Mohd Feroz Khan S/o Mohd. Ibrahim Khan, 17-1-375/31/A, Husnabad, Santosh Nagar, Hyderabad - 500059. On being called by Sri Bandla D....
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....tionship Wife Jhansi Rani Sanaka 8. The search commenced on 04.01.2023 at 06.50 a.m./p.mr The proceedings were closed 06.01.2023 at 10.15 a.m./p.m as finally-concluded / temporarily concluded for the day to be commenced subsequently for which purpose seals were placed the locker inside Almirah in the Bed room, situated at the North-west corner of the residence premises at Flat No. 401, Chestiya Estates, Near Nagarjuna High School, Rajeev Nagar, Khairatabad, Hyderabad in our presence. 9. Orders under 132(3) of the I. T. Act 1961 in respect of the sealed locker inside Almirah in the Bed room, situated at the North-west corner of the residence premises at Flat No. 401, Chestiya Estates, Near Nagarjuna High School, Rajeev Nagar, Khairatabad was served on Shri. Ramesh Kumar Sanaka by the said authorized officer, Bandla Dinesh Aditya, DDIT(Inv.), Unit-1(3), Hyderabad. 10. Before leaving the above mentioned place of the search, the entire search party again offered themselves for personal search which was taken / declined. The above panchnama has been read by us / explained-to-us-in-local-language-via-Telugu-by-Shri-/-Smt- and is certified that it has been correctly recorded. ....
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....party (With Name & Position) Signature of Authorised Officer (With Name & Designation) Signature of panchas Ber litz: 1 S RAMESH TOMAR - 2 Document 12 RUNNING PANCHANAMA IN THE CASE OF SRI RAMESH KUMAR SANAKA, Flat No. 401, Chestiya Estates, Near Nagarjuna High School, Rajeev Nagar, Khairatabad, Hyderabad - 500045 DATE: 05.01.2023 AT 03:00 PM. During the course of Search and Seizure operation conducted u/s.132 of the Income tax Act, 1961 in the case of Sri Ramesh Kumar Sanaka at Flat No. 401, Chestiya Estates, Near Nagarjuna High School, Rajeev Nagar, Khairatabad, Hyderabad - 500045, the assessee Sri Ramesh Kumar Sanaka was sent to the corporate office of M/s Exel Rubber Private Limited at Plot No.7, Thrushna Building, TGIIC layour, Infocity, Madhapur, Hyderabad - 500081. Witness-1 05/01/23 de Witness-2 LA 05/01/23 बी. दिनेश à¤-दित था.रा.से. Authorised Officer . . . . ... .- . 1 x (Inv ) ific-t( ). .... i. t. that 1(3), Hyderabad Assessee Document 13 93 PANCHANAMA Party No. MARS-1 M/s Excl Rubber Private Limited M/s Ace Tyres Privat....
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....Director of Income- tax (Inv.], Hyderabad to Shri Satendra Sharma (Security incharge) who was present in the said place at the time and after-reading the mid-outhorition/-after the authorization was explained to him in local language viz .. Hindi by Shri Rajesh Kumar Meena, Inspector of Income Tax, signed it in our presence and along with us, in token of having perused the same and to Shri Jwala Prasad, Asst Accounts Manager of M/s Excl Rubber Private Limited subsequently, who, after reading the said authorization, signed it in our presence in token of having perused the same. nimionce-of-the-proceeding-on Document 14 83 seols-which had been placed on that date ie and bund them to be intact / tampered-with-as narrated in the encinsures . 3 The above mentioned search party offered themselves for personal search before commencing the search which was token / declined 4. A search of the above mentioned place was carried out by the said party in our presence in an orderly manner without hurting the sentiments of any of the occupants of premises Nothing untoward /-the-events-norrated-in-the-enclosures happened in the course of the search. 5 In the course of the sea....
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.....) Name: S.RAMESH KUMAR position in / relationship to 'A' Excel Robben 81 td Finance Duce Date: Document 15 Q.13 Please refer to the Q.No.60 of your statement recorded at your residence during the course of Search and Seizure u/s 132 of the I.T. Act, 1961 which is reproduced below. X Q.60 1 am showing you excel workbooks named "CASH ACE 21-22", "CASH EXEL 20-21", "CASH EXEL 21-22" and "CASH VILAS 21-22" found in the folder named "CASH" on desktop of your Dell laptop which was found during the course of search and seizure proceedings at this premise. Please confirm the same and explain the contents in them. Please also state that the transactions in the excel workbooks were recorded in the books of accounts. Ans. Yes sir, I confirm that an excel workbooks named "CASH ACE 21-22", "CASH EXEL 20-21", "CASH EXEL 21-22" and "CASH VILAS 21-22" found in the folder named "CASH" on desktop of my Dell laptop. The excel workbooks contain the details of receipts and payments made in cash for the FY 2021-22 of M/s ATPL, FY 2020-21 of M/s ERPL, FY 2021-22 of M/s ERPL and FY 2021-22 of M/s VPPL respectively. These excel workbooks were created by Sri Jwala Prasad, Asst. ....
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....l capacity. I would like to further state that amounts mentioned in the table above for different financial years include amounts realized from the debtors to whom either the Group concerns or the individual directors have advanced loans earlier which have to be adjusted for arriving at the actual cash generated over years. Document 19 2.11.12.59.012 2.31,50,84,420 10 00,100 |Cautaa Batters & Other Advances 104.0011-4 1.00.000 |Cantes Entries & Diluer Adultery 14.00,00 CATH ÄƯỢC Tá»” ÄẤT GA MÉÄỘT ThÆ°Æ¡n ch hoạn 11,00.000 1.41.000 1,000 Haft wallace 2704-2011/C 21.04.20110 11.04.201 11.745 Repars & Mandanaice - Factory 02-06-2011 Casa 81:00-2011: Cach coding shutters transporation charges : gusa 91-06- 2011 Cash 03-05-2011 Cach 03-08-2011 CHA 04.01-2013 CM8 fencing poles removing work - latou charprs 04-05-1011 Cauh 04-05-2011 CHUN 8450 Repars & Maitenance - Factory Document 20 Annexure-A2 Proforma for approval by the Specified Authority 1. Name of the assessee M/s Ace Tyres Private Limited 2. Address & e-Mail of the assessee ....
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....e u/s 148 of I.T.Act, as per clause (i) of explanation 2 of section 148, which also suggests that income to tune of Rs. 6,08,84,018/- chargeable to tax has escaped assessment, the proposal of AO deserves consideration. 3. In view of the above, approval may kindly be accorded by the Director General of Income Tax (Inv.), Hyderabad for issuance of u/s. 148 of the I.T Act. Date: 08/09/2023 H.X/ (M NAVEEN, IR8/9/23. Central Range-1, Hyderabad. Additional Commissioner of Income Document 22 3 Recommendations of the CIT / PCIT 20. as per annexwe attached. Date: 3721 (YOGESH KUMAR VERMA, IRS) Principal Commissioner of Income Tax (Central). Hyderabad. Reasons for according approval / rejection by the specified authority to order u/s 148A(d) and / or issuance of notice under section 148 of the Income Tax Act, 1961 21. covered up (149(1) (b). Isone of motive wfs 148 in anyqual . 6/10/23 Date: (SANJAY BAHADUR, IRS) Director General of Income Tax (Inv). Hyderabad. Document 23 GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT OFFICE OF THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE-1(2) HYDERABAD To. ....