TaxTMI 
TaxTMI 
2025 (11) TMI 1764
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....r, case of the assessee was re-opened in terms of the notice issued u/s 148 of the Act dated 31.03.2019 and subsequently, re-assessment order was passed on 24.12.2019 by making addition of INR 3.50 crores received from M/s. Anamika Steel Traders Pvt. Ltd. of INR 1.75 crores and M/s. Gajraj Steel Merchants Pvt.Ltd. of INR 1.75 crores each by holding the same as unexplained credits. 3. Against the said order, the assessee preferred appeal before Ld. CIT(A) who vide impugned order dated 24.06.2024 has confirmed the order passed by AO. Aggrieved, the assessee is in appeal before the Tribunal by taking following grounds of appeal:- A. u/s 147 Unlawful Reopening and conduct of Assessment Proceedings i. The re-assessment proceedings, and the confirmation thereof, are invalid and bad in law as the re-opening of the case has been made unlawfully and in contravention of the provisions of law in this regard, in light of the facts of the case. ii. The assessment proceedings, and the confirmation thereof, are bad in law as, contrary to the rulings of courts of the land, the case has been reopened without due investigation and fresh application of mind by t....
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....e has been done without rejecting the objections of the assessee against such re-opening through a speaking order and by stating falsehoods in such order. x. The assessment is bad in law, being inequitable and injudicious, as the same has been concluded through a non-speaking order. xi. The assessment is bad in law, being inequitable and injudicious, as the same has been passed by the LAO in haste, by Ignoring the request for time and by deliberately pre-dating his order and the CIT(A) has unjustly struck down this argument of the assessee on incorrect facts and conclusions. xii. The assessment proceedings, and the confirmation thereof, are bad in law as, the case has been reopened and concluded by completely ignoring, Incorrectly quoting and/or deliberately misconstruing the submissions made by the assessee before the re-opening and during the course of the re-assessment proceedings. xiii. The LAO has erred in reopening the case, and the Hon'ble CIT(A) has erred in confirming such re-opening, as in doing so, they have both gone against the principles of natural justice. B. u/s 68 Addition of Rs. 3,50,00,000/- i. Th....
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....se of the assessee was completed accepting the income declared. He further submits that the assessee has received a notice u/s 133(6) on 26.03.2019 issued by the AO wherein it was stated by Ld. ACIT, Central Circle15, New Delhi that assessee has received credit entries of INR 3.50 crores which has not been recorded in the books of accounts. In response, a mail was sent to the AO on 29.03.2019 wherein it was requested to supply the details of entries which were alleged as not recorded on the books of accounts. However, the AO had not supplied any such information and after recording the reasons, had issued notice u/s 148 of the Act on 31.03.2019 for re-opening the completed assessment. 6. The Ld. AR for the assessee further submits that notice so issued u/s 148 of the Act, contained PAN No. of assessee as "AAJCS2757B" as against the correct PAN of AAICS2757B. He submits that notice issued u/s 148 of the Act on 31.03.2019 for AY 2012-13 was thus issued on wrong PAN and never served to the assessee within the statutory time limit i.e. within six years from the end of the relevant AY. For this, the assessee has drew our attention to the screenshot of the Income Tax Portal taken on 0....
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....d accordingly. 8. It is further argued that in the reasons recorded in Column No.17, while granting the approval for re-opening the Ld. PCIT observed "perused reasons satisfied fit case for 148 proceedings". He submits that from the perusal of the observations of Ld. PCIT, it could be seen that no independent application of mind and approval was given in mechanical manner wherein Ld. PCIT simply given his approval on the reasons recorded by the AO which contains serious error of fact that no loan of INR 3.50 crores was received by the assessee from M/s. Anamika Steel Trading Pvt. Ltd. for which satisfaction was recorded of escapement of income by the AO. He thus, submits that on this score also, the proceedings initiated u/s 148 deserves to be hold as bad in law. 9. On the other hand, Ld. Sr. DR for the Revenue vehemently supports the orders of the lower authorities and submits that there was an information that assessee has received its unaccounted money in the shape of loans of INR 3.50 crores and this fact is not found to be incorrect as the assessee has received loan of INR 3.50 crores in the year under appeal. The necessary copies of the correspondence are available in t....
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....naged by entry operator who provided the entries after charging commission and through this company, assessee has taken accommodation entries of INR 3.50 Crores which was received from M/s Anamika Steel Trading Pvt. Ltd. However, assessee submits that it had received loan of INR 1.75 crores only from M/s Anamika Steel Trading Pvt. Ltd. for which all necessary documents such as confirmation etc. were filed in terms of letter dated 26.03.2014 before the AO during the course of assessment proceedings u/s 143(3) of the Act. When the assessee has stated that fact that only 1.745 crores were received from M/s Anamika Steel Trading Pvt. Ltd., the AO modified his allegation and alleged that assessee has received INR 1.75 Crores from M/s. Anamika Steel Trading Pvt. Ltd. and balance of INR 1.75 Crores was received from M/s. Gajraj Steel Merchants Pvt. Ltd., another company managed and controlled by same entry provider. This clearly established that before recording the reasons for re-opening the assessment, AO has not made any enquiry/investigation so as to verify the correctness and completeness of the information, more particularly, when assessment in the instant case was already completed....
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....tisfaction by Joint Commissioner, that accorded sanction for issuing notice u/s. 147, was clearly unsustainable-On such consideration, both Appellate authorities interfered into matter- o error was committed warranting reconsideration-As far as explanation to S. 151, brought into force by Finance Act, 2008 was concerned, same only pertained to issuance of notice and not with regard to manner of recording satisfaction-Amended provision did not help Revenue-No question of law involved in matter, that warranted reconsideration Revenue's Appeals dismissed." 15. The Hon'ble Delhi High Court in the case of CIT vs N.C. Cables Ltd. (supra) has observed as under:- "Reassessment-Issuance of Notice-Sanction for issue of Notice Assessee had in its return for A Y 2001-02 claimed that sum of Rs. 1 Crore was received towards share application amounts and a further sum of Thirty Five Lakhs was credited to it as an advance towards loan-Original assessment was completed u/s 143(3)- However, pursuant to reassessment notice, which was dropped due to technical reasons, and later notice was issued and assessments were taken up afresh-After considering submissions of assessee and document....
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.... recorded by such Assessing Officer, that it is a fit case for the issue of such notice. (3) For the purposes of sub-section (1) and sub-section (2), the Principal Chief Commissioner or the Chief Commissioner or the g Principal Commissioner or the Commissioner or the Joint Commissioner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice under section 148, need not issue such notice himself." 12. A plain reading of the aforesaid provision clearly indicates that the prescribed authority must be "satisfied", on the reasons recorded by the Assessing Officer ("AO"), that it is a fit case for the issuance of such notice. Thus, the satisfaction of the prescribed authority is a sine qua non for a valid approval. 13. It is trite law that the grant of approval is neither an empty formality nor a mechanical exercise. The competent authority must apply its mind independently on the basis of material placed before it before grant of sanction. 14. A perusal of the record reveals that the request for approval under section 151 of the Act in a printed format was placed before the P....
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....the Act. Reference can be drawn from the decision of this court in Pr. CIT v. N. C. Cables Ltd.¹, wherein, the usage of the expression 'approved was considered to be merely ritualistic and formal rather than meaningful. The relevant paragraph of the said decision reads as under (page 17 of 391 ITR): '11. Section 151 of the Act clearly stipulates that the Commissioner of Income-tax (Appeals), who is the competent authority to authorise 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 Commissioner of Income-tax (Appeals) 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 reflected in the briefest possible manner. In the present case, the exercise appears to have been ritualistic and formal rather than meaningful, which is the rationale for the safeguard of an approval by a higher ranking officer. For these reasons, the court is satisfied that the findings by the Income-tax Appellate Tribunal cannot be disturbed.' 18. Further, this court in the case of Central In....
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....whether it is purely administrative or quasi-judicial. They should reveal a rational nexus between the facts considered and the conclusions reached. Only in this way can opinions or decisions recorded be shown to be manifestly just and reasonable." (emphasis supplied)' 19. In the case of Chhugamal Rajpal v. S. P. Chaliha³, the hon'ble Supreme Court refused to consider the affixing of signature along with the noting Yes' as valid approval and had held as under (page 608 of 79 ITR): 'Further the report submitted by him under section 151(2) does not mention any reason for coming to the conclusion that it is a fit case for the issue of a notice under section 148. We are also of the opinion that the Commissioner has mechanically accorded permission. He did not himself record that he was satisfied that this was a fit case for the issue of a notice under section 148. To question 8 in the report which reads "whether the Commissioner is satisfied that it is a fit case for the issue of notice under section 148", he just noted the b word "yes" and affixed his signatures thereunder. We are of the opinion that if only he had read the report carefully, he ....
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....Whereas I have reason to believe that your income chargeable to Tax for the Assessment Year 2012-13 has escaped Assessment within the meaning of section 147 of the Income Tax Act, 1961. I, therefore, propose to assess/re-assess the income/loss for the said Assessment Year and I hereby require you to deliver to me within 30 days from the service of this notice, a return in the prescribed form for the said Assessment Year. This notice is being issued after obtaining the necessary satisfaction of the Pr. Commissioner of Income Tax-2, New Delhi. () (Parbodh Kumar) Asstt. Commissioner of Income Tax (Central Circle-15, Delhi) PARGODH KUMAR Assit. Commissioner of Income Tax Central Circle-15, New Delhi CERTIFIED TRUE COPY Document 2 the D . 8 My Account e-Filing Anywhere Anytime Accessibility Optibris T Comest de Luato Income Tax Department, Government of India Welcome SPIRIT GLOBAL CONSTRUCTIONS PRIVATE LIMITED (Corporate) Logout Last Login: 04/04/2019 16:35:52 Idle Session Timer 1 9 [o] [a] Dashboard My Account e-File e-Proceeding e-Nivaran Worklist Profile Settings Compliance Income Tax Return No valid notice found for the....