TaxTMI 
TaxTMI 
2025 (12) TMI 1232
X X X X Extracts X X X X
X X X X Extracts X X X X
....y was pleased to dispose of two Appeals preferred by the assessee/respondent assailing the assessments for the years 2015-16 and 2016-17. 4. The case, canvassed by the Assessee before the Appellate Tribunal, is that there is non-compliance with the mandatory provisions of Sections 148, 149 and 151 of the Income Tax Act, 1961; that the appreciation of the materials by the A.O. is perverse; that the assessee had filed his returns for the year 2015-16 declaring a total income of Rs. 6,54,730/-; that the returns were made on 15.08.2015. 5. That on 08.09.2015 and 18.04.2017, a survey & search operation were conducted under Section 133A & 132 of the Act against one Sri Amit Sharma. It is the case of the revenue that said Amit Sharma is a contractor of Uttar Pradesh Rajkiya Nirman Nigam Limited (hereinafter referred to as 'UPRNN' for the sake of brevity). That the said Amit Sharma was a beneficiary of largesse in the form of award of contracts by the respondent, who abused his position as MD of the State Infrastructure and Industrial Development Corporation of Uttarakhand Ltd (hereinafter referred as 'SIDCUL' for the sake of brevity). 6. It is the case of the Revenue that the civ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sons and this time forwarded the same to PCIT, Kanpur on 23.06.2020, by which time, the period of four years from the end of Assessment Year had passed-by. The assessee would particularly point out the regularly changing "quantum of escaped income". In the earliest proposal, the escaped income was recorded as Rs. 16.72 crore. In the second proposal, the escaped income was recorded as Rs. 13.16 crore. It is further elaborated that the reasons recorded were the reasons that were not approved by the Competent Authority during the first round. The second proposal also did not come to fruition or rather the fate of which is not made known. While so, again on 08.10.2020, ACIT, Dehradun once again recorded the reasons and forwarded the proposal for approval to PCIT, Kanpur u/s 151 of the Act and this time, the escaped income was recorded as Rs. 13.16 crore and Rs. 15.85 crore with Diary No. 756. The said proposal was not approved and it was recorded that the officer placing the proposal must discuss the reasons in detail. Yet again, on 07.12.2020, the ACIT, Central Circle, Dehradun sent one more proposal for the 4th time and the reasons were verbatim (this is vehemently denied by the appe....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... The Tribunal has also made a copy of the said Pages 186 & 187 as part of the order and is found at Pages 11 and 12 of the impugned order. The Tribunal has also extracted the relevant portion of the proposals and the same reads as under:- "During the period mentioned above Shri R. Rajesh Kumar was posted with SIDCUL and was holding the post of M.D., and was having close nexus with Shri Amit Sharma, the assessee surveyed. During enquiries conducted by Investigation Wing, it is found that Shri R. Rajesh Kumar was residing in the house owned by Shri Amit Sharma. He was also person responsible of work of issuing work order of various contracts to Shri Amit Sharma and his concerns. Shri R. Rajesh Kumar was issued summons / notices by the DDIT (Inv). Dehradun with the request to explain these entries appearing in the impounded material. Initially, he avoided the hearing but later on he filed written submissions denying knowledge of these entries, but he could not extend any convincing replies to these queries, as such his explanation is not worthy of truth. Further, the entries appearing in Annexure A/SE-19 page 13 were also not explained satisfactorily., Shri V.K. Raj....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d Electrical Company (P) Ltd. vs. Commissioner of Income Tax and others (Civil Writ Petition No. 5746 and CM No. 9769/2002, decided on 10.10.2002) and the order of the Hon'ble High Court of Madhya Pradesh in the case of Commissioner of Income Tax vs. S. Goyanka Lime and Chemicals Ltd. (ITA No. 82 to 84 & 87 to 89 of 2012, decided on 14.10.2014) and finally, on the ruling of the Hon'ble Apex Court in Chhugamal Rajpal vs. S.P. Chaliha & others reported in (1971) 79 ITR 0603. The relevant paragraphs have been extracted by the Tribunal in support of its findings. 19. In Paragraph-16, the Tribunal has recorded that there is no independent application of mind by the approving authority and the very same grounds and reasons, which were earlier rejected on two occasions and not approved on two occasions, have been accorded approval in the fifth round. The Tribunal, in Paragraph-17, has also discussed the allegations of nexus and the reasons for the alleged illegal gratification, i.e. the award of contracts to Amit Sharma. The Tribunal has also made out a chart in tabular form consisting of three columns under the heads 'Facts mentioned in reasons', 'Correct facts' and 'Remark'. The tabu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bunal relied on the case of Ganga Prasad Maheshwari vs. CIT reported in (1983) 139 ITR 1043 (All) and followed the Hon'ble Apex Court's exposition of law regarding "reason to believe", wherein the Hon'ble Apex Court was pleased to hold that before the Officer accepts a fact to exist, there must be justification for it and on the basis of the above discussion, concluded in Paragraph-22 that the approval was a mechanical one and hence, the assumption of jurisdiction by the AO was bad in law. 22. Learned counsel for the Revenue/Appellant would vociferously contend that the Tribunal failed to appreciate the transactions denoting the flow of funds (in cash, bullion, diamond and cheques) towards the assessee; that they were relatable to him on the basis of two direct evidences; that the papers were not dumb papers and were live incriminating papers as the same recorded entries of payments to the father of the assessee, i.e. Sri V.K. Rajan and he would place reliance on the ruling of the Jharkhand High Court in the case of Mahabir Prasad Rungta vs. CIT(A) reported in (2014) 266 CTR 175 to contend that additions could be made on the basis of loose papers if the situation so warranted. S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....warded to UPRNN are not on account of any competitive bidding but on account of a policy of the Government, whereby in respect of all civil works, the SIDCUL is put in charge of executing the same and by Government Order, the SIDCUL is required to award the contract to UPRNN, which, in turn, engages sub-contractors for executing the works. Despite this mandatory condition the revenue has presumed that the respondent had direct influence to control of sub-contracts by SIDCUL. 24. The other limb of argument, canvassed by the learned counsel for the appellant, is that the sanction letters, issued by SIDCUL and addressed to UPRNN, were found in the premises of Shri Amit Sharma. This in our firm opinion is not a prejudicial fact once it is admitted that he is a sub- contractor and it would be in usual course for him to be in possession of the same. That the impounded papers mentioned payments to one Shri Sanjay Rawat, the then AGM of SIDCUL; that the above facts formed the basis for the A.O.'s reason to believe. 25. Learned counsel for the revenue/appellant has placed reliance on several rulings of the Hon'ble Apex Court as well as of various High Courts. 26. Learned counsel fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....any audit objection to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act; or (iii) any information received under an agreement referred to in section 90 or section 90A of the Act; or (iv) any information made available to the Assessing Officer under the scheme notified under section 135A; or (v) any information which requires action in consequence of the order of a Tribunal or a Court.] Explanation 2.-For the purposes of this section, where,- (i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or (ii) a survey is conducted under section 133A, other than under sub-section (2A) [***] of that section, on or after the 1st day of April, 2021, in the case of the assessee; or (iii) 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 or requisiti....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such 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) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 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 u/s 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 u/s 132 or requisit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he time of adjudicating the Appeal is a substantial question of law. 31. The only question that arises for consideration is, whether the multiple presentations / repeated re-presentation, of the proposal for initiation of proceedings u/s 148 to the Competent Authority u/s 151, is permissible under the Act of 1961? 32. Learned counsel for the appellant/revenue would contend that neither Section 148, nor Section 151 of the Act of 1961 bars multiple presentations or re-presentation of the proposal; that in the absence of a bar, it is open for the A.O. to seek approval any number of times. In this regard, it is pertinent to note that this query was posed to the learned counsel for the appellant and along with the said query, the appellant was also asked to clarify as to whether any mechanism or remedy is available under the scheme of the Act to the A.O. in the event of refusal of approval by the Competent Authority. 33. As regards the second query, the learned A.O. has fairly conceded that there is no remedy available to the A.O. in the event of the Competent Authority refusing approval. 34. The very fact that the scope and ambit of the Act of 1961 does not provide for any ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ty under Section 151 of the Act of 1961. Thus, it can be safely presumed that the order under Section 151 of the Act of 1961 is not an appealable order. 40. We next move on to examine the provisions of Section 263 of the Act of 1961, which provides for revision of orders prejudicial to the revenue. A reading of sub-section (1) and various clauses would further clarify and buttress the view of this Court that the proceedings / the orders passed by the Competent Authority under Section 151 of the Act of 1961 are not revisable under Section 263 of the Act of 1961 but only such of those orders passed by officers/authorities, subordinate to the Competent Authority u/s 151. 41. Next, we examine the ambit of Section 264 of the Act of 1961, which deals with revision of other orders. It enables the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, either on their own motion or on an application by the assessee for revision, to call for the records of any proceedings under this Act, in which such order has been passed and to make such inquiry or cause any such inquiry to be made and subject to the provisions of this Act they may pass such ord....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... a self contained Code, be it with regard to Appeals and Revisions, the omission to provide a remedy against the same buttresses the opinion of this Court that the Parliament intended to give a finality at the hands of the Competent Authority. 48. A useful reference could be made to the law laid down by the Hon'ble Apex Court with regard to the finality of the proceedings. 49. The Hon'ble Supreme Court in the case of Rashid Khan Pathan vs. Vijay Kurle and others reported in (2021) 12 SCC 64 has held as under: "10. In a country governed by the rule of law, finality of the judgment is absolutely imperative and great sanctity is attached to the finality of the judgment. Permitting the parties to reopen the concluded judgments of this Court by filing repeated interlocutory applications is clearly an abuse of the process of law and would have far-reaching adverse impact on the administration of justice [Indian Council for Enviro-Legal Action v. Union of India, (2011) 8 SCC 161 : (2011) 4 SCC (Civ) 87]. 11. Repeated filing of applications which are not maintainable, amounts to abuse of process of law. O. Chinnappa Reddy, J. in Advocate General v. M.P. Khair Indust....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tem adopt an institutional approach which penalises such behaviour. Liberal access to justice does not mean access to chaos and indiscipline. A strong message must be conveyed that courts of justice will not be allowed to be disrupted by litigative strategies designed to profit from the delays of the law. Unless remedial action is taken by all courts here and now our society will breed a legal culture based on evasion instead of abidance. It is the duty of every court to firmly deal with such situations. The imposition of exemplary costs is a necessary instrument which has to be deployed to weed out, as well as to prevent the filing of frivolous cases. It is only then that the courts can set apart time to resolve genuine causes and answer the concerns of those who are in need of justice. Imposition of real time costs is also necessary to ensure that access to courts is available to citizens with genuine grievances. Otherwise, the doors would be shut to legitimate causes simply by the weight of undeserving cases which flood the system. Such a situation cannot be allowed to come to pass. Hence it is not merely a matter of discretion but a duty and obligation cast upon all courts to e....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... D 426]. Hence, when a statute requires a particular thing to be done in a particular manner, it must be done in that manner or not at all and other methods of performance are necessarily forbidden [Nazir Ahmad v. King Emperor, 1936 SCC OnLine PC 41 : (1935-36) 63 IA 372] . This Court too, has adopted this maxim [Parbhani Transport Coop. Society Ltd. v. RTA, 1960 SCC OnLine SC 46 : AIR 1960 SC 801]. This rule provides that an expressly laid down mode of doing something necessarily implies a prohibition on doing it in any other way." 51. The fact that the proposals are to be preceded by reason to believe and the approval/sanction ought to be after application of mind would clearly demonstrate that the exercise of powers under Sections 147 to 151 of the Act of 1961, though subjective in nature, are to be relatable to an objective assessment of the material. 52. It is no more res integra that power of review is not an inherent power, but one that is to be statutorily conferred by law. The right to seek review is neither a natural, nor a fundamental right. If the contention of the appellant's counsel is accepted it could lead to a far greater mischief and in the hands of unscrupu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t in exercising power under sub-section (2) of Section 254 of the Act on the ground that there was a 'mistake apparent from the record' committed by the Tribunal while deciding the appeal and whether it could have recalled the earlier order on that ground. Secondly, whether on merits, the assessee is entitled to exemption as claimed. 21. Plain reading of sub-section (1) of Section 254 quoted hereinabove makes it more than clear that the Tribunal will pass an order after affording opportunity of hearing to both the parties to appeal. Sub-section (4) expressly declares that save as otherwise provided in Section 256 (Reference), "orders passed by the Appellate Tribunal on appeal shall be final". Sub-section (2) enacts that the Tribunal may at any time within four years from the date of the order rectify any mistake apparent from the record suo motu. The Tribunal shall rectify such mistake if it is brought to notice of the Tribunal by the assessee or the Assessing Officer. 22. Sub-section (2) thus covers two distinct situations; (i) It enables the Tribunal at any time within four years from the date of the order to amend any order passed under sub-section (1)....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he power to review is not an inherent power. It must be conferred by law either specifically or by necessary implication. No provision in the Act was brought to our notice from which it could be gathered that the Government had power to review its own order. If the Government had no power to review its own order, it is obvious that its delegate could not have reviewed its order". (emphasis supplied) 28. The view in Patel Narshi Thakershi has been reiterated by this Court in several cases. It is not necessary for us to refer to all those cases. The legal proposition has not been disputed even by the learned counsel for the assessee." 53. Thus, if the Act of 1961, as mandated by the Finance Act, 2023, is viewed in the background of the law as settled by the Hon'ble Apex Court, as noted supra, it is apparent that the Scheme of the Act does not vest any review power in the A.O. or the Competent Authority. 54. In that view, the multiple presentation and re- presentation of the proposal by the A.O. was without jurisdiction and the act of the Competent Authority granting approval after the same had been rejected at the very initial stage itself was also an act with....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s 10 to 12) 4. Roshan Di Hatti vs. Commissioner of Income Tax (1977) 107 ITR 938 (SC) (Para 3) 5. Commissioner of Income Tax vs. Sahara India [2013] 33 taxmann.com 550 (Allahabad) (Para-19) 6. Raymond Woollen Mills Ltd. vs. Income Tax Officer [1999] 236 ITR 34 (SC) (Para-3) 7. Kantibhai Dharamshibhai Narola vs. Assistant Commissioner of Income Tax, Ward 3(2)(4) [2021] 125 taxmann.com 348 (Gujarat) (Para-32). 8. Mahabir Prasad Rungta vs. Commissioner of Income-tax (Appeals), Ranchi [2014] 43 taxmann.com 328 (Jharkhand) (Paras 15 to 18) 9. Commissioner of Income Tax vs. Durga Prasad More [1971] 82 ITR 540 (SC) (Paras 8 to 11) 10. Sumati Dayal vs. Commissioner of Income Tax [1995] 80 Taxman 89 (SC) (Paras 4 & 6) 11. Ashok Kumar vs. Commissioner of Income Tax-I, Patna [2016] 69 taxmann.com 129 (Patna) (Paras 12 to 18) 12. Venky Steels (P) Ltd. vs. Commissioner of Income Tax [2024] 167 taxmann.com 60 (Patna) (Para 11) 13. Experion Developers (P.) Ltd. vs. Assistant Commissioner of Income Tax [2020] 115 taxmann.com 338 (Delhi) (Para 42) 14. Isidore Fernandes vs. Assistant Commissioner of In....