TaxTMI 
TaxTMI 
2026 (2) TMI 1183
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....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 abinitio. 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 Income Tax Act. 5. On the facts and circumstances of the case, Learned CIT(A) erred in dismissing the legal grounds. 6. On the facts and circumstance of the case that the Assessment Order Passed u/s. 143(3) read with Section 148 is vitiated and has become unsustainable in law since the approval u/s. 148B has been accorded by Addl. CIT/JCIT(Range head in a mechanical manner. 7. On the facts and circumstance of the case, sanction under Section 151 of the Act, has been granted mechanically and without satisfaction that how it fits under Section 149(1)(b)(i) and Section 149(1)(b)(iii). Accordingly grant of sanction is liable to be declared as nullity and invalid and resultantly, impugned notice under Section 148 is bad in law. ....
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.... dated 23.11.2023 was issued, which was duly served on the assessee. In response to the notice issued u/s. 148, the assessee filed its return of income on 03.02.2024 admitting total income of Rs. 39,47,11,554/-. The assessee admitted an additional income of Rs. 1,98,15,318/- towards undisclosed income out of cash receipts as per entries in Focus 5.5 software found during the search proceedings. The assessee vide letter dated 06.02.2024 furnished computation of income in response to notice u/s. 148 of the Act and original computation of income and also requested to furnish the reasons for reopening of assessment u/s. 147 of the I.T. Act. The A.O vide letter dated 07.02.2024 provided the reasons recorded for reopening of assessment to the assessee. Thereafter, statutory notices under section 143(2) & 142(1) of the I.T. Act, dated 16.04.2024 & 10.05.2024, respectively, were issued calling for certain information. In response to the notices issued, the assessee furnished the information called for. The assessment has been completed u/s. 143(3) r.w.s. 147 of the I. T. Act, 1961 on 13/03/2025 and determined total income at Rs. 40,96,24,358/-, by inter alia making additions towards undisc....
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.... obtained by the Assessing Officer before issuing notice u/s. 148 dated 24.11.2023. 8. The learned Counsel for the assessee has contended that it is a settled principle 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 prescribes 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 M/s Opto Circuit India Ltd vs. Axis Bank (2021) 127 Taxmann.com 290. Therefore, if law requires something....
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....d for reopening the assessment regarding fulfilling of the conditions specified u/s. 149(1)(b) of the Act. The Assessing Officer has not even quantified that the income escaped assessment 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 i....
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....The specified authority has not given any finding at the time of granting the sanction as to why the reopening beyond 3 years is in accordance with the provisions of section 149(1)(b) of the Act. 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: 12. On the other hand, the learned DR has referred to the reasons given by the Pr. CIT (Central) for forwarding the proposal of initiation of proceedi....
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....ake a detailed or in-depth examination of the evidence collected or come to 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 the 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 the Department from the Sr. Accounts Manager of the assessee's group would be incriminating material for the purpose of issuance of notice u/s. 148 of the Act. The possession of the incriminating material by the Sr. Accounts Manager of the assessee group is certainly attributed to the assessee and other group companies. Th....
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....s carried out by the ADIT-(lnv.), Unit-I(1), Hyderabad on 04.01.2023 covering the group cases of M/s Exel Rubber Group and related entities/ individuals. The case of the assessee, M/s Ace Tyres Private Limited, a group company, in which search u/s. 132 was conducted on 04.01.2023 was centralized to this office ACIT-CC-1(2), Hyderabad. 2. During the Search proceedings, details of various unaccounted cash receipts, viz. scrap sales, cash generated from adjustment purchase transactions, cash received on sale of lands, etc. were found and seized in certain cases. After analysis of the seized material and investigation, the ADIT (Inv.), Unit-(1) has quantified the undisclosed income detected in the hands of the assessee company M/s Ace Tyres Private Limited, as under: Asst. Year Undisclosed Income Quantified by ADIT Additional Income admitted by the assessee out 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 ....
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....presenting receipts and payment in cash from the financial year 2013-14 to 2022-23. A statement of Shri Ramesh Kumar Sanaka was recorded during the course of search wherein he explained the transactions as found in FOCUS 5.,5 Software as unaccounted receipts generated from sale of scraps generated under various process of manufacturing of products and packaging material etc. There were also transactions recorded regarding expenditure incurred in cash. These transaction as found recorded in FOCUS 5.5 Software are in the nature of cash receipts as well as cash ITA Nos 1084 to 1088 and 1207 of 2025 ACE Tyres P Ltd expenditure and pertain to three companies namely Exel Rubber (P) Ltd, M/s. ACE Tyres (P) Ltd and M/s. Vilas Polymers (P) Ltd. The relevant part of the statement of Shri Ramesh Kumar Sanaka recorded u/s. 132(4) of the Act on 04/01/2023, 05/01/2023 and 06/01/2023 during the course of search & seizure action at his residential premises at Flat No.401, Chestiya Estates, Near Nagarjuna High School, Rajeev Nagar, Khairtabad, Hyderabad is reproduced as under: Q.7 Please furnish the details of Movable and Immovable properties held in the name of yourself and in the name of....
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....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) data of the company to the banks for renewal of credit limits. I follow up the payments from customers. Further, I attend to the works assigned by the management from time to time. Further, I am the Finance Head looking after the entire Exel group of business concerns and report directly to Sri G. Raghunath Reddy. Q.10 Please give details of key employees of accounts department of M/s ERPL and Its group concerns. Ans: Besides myself as Sr. Manager (Accounts), the Accounts team of M/s ERPL has Sri C. Maheshwar Rao Manager (Accounts), Sri K. Jwala Prasad Asst, Manager (Accounts), Sri K. Dorababu, Accountant, Sri Bhoopal Reddy, Accountant and Sri J. Satyanarayana. Sri C.S. Kal....
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....kbook 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. 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 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. Manager (Accounts) and records in them were updated by me and him. The transactions menti....
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....s comprising M/s. Exel Rubber (P) Ltd, M/s. Ace Tyres (P) Ltd, M/s. Vilas Polymers (P) Ltd, M/s. Spinmax Tyres (P) Ltd and M/s. Laxes Machine (P) Ltd vide warrant of authorisation and Panchanama as under: 17. In the said search & seizure action in case of Exel Group, statement of Shri Gangaram Raghunath Reddy, M.D of Exel Group of companies was recorded on 17/01/2023 u/s. 132(4) of the I.T. Act. During the said statement, Shri Gangaram Raghunath Reddy was confronted with the statement of Shri Ramesh Kumar Sanaka recorded on 04/01/2023 to 06/01/2023 at his residence at Flat No.401,Chestiya Estates as well as statemennt dated 06/01/2023 again recorded in the search & seizure operation in case of Exel Rupper (P) Ltd a group entity at the Corporate Office at Plot No.7 Thrushna Building, TGHC Layout, Infocity, Madhapur, Hyderabad. During the said statement at the Corporate Office of Exel group of entities Shri Ramesh Kumar Sanaka was confronted with his earlier statement recorded u/s. 132(4) of the Act at his residence. The relevant part of the statement in question Nos. 13 and Question No.21 as under: Q.13. Please refer to the Q.No.60 of your statement recorded at you....
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....nt in their individual 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." 18. Thus, the financial year wise summary of unaccounted cash transactions of the entire Exel Group of companies was given by Shri Ramesh Kumar Sanaka which reveals that for the A.Y 2011-12 to 2017-18 i.e. relevant to the A.Y 2012-13 to 2018- 19 no specific unaccounted cash receipts is attributed to individual company i.e. Exel Rubber (P) Ltd and Ace Tyres (P) Ltd. Only from the financial year 2018-19 onwards, the details of specific amount of unaccounted cash receipts in case of these 2 entities were given which shows that there was no specific amounts of unaccounted cash receipts attributable to these 2 companies prior to financial year 2018-19, though the total unaccounted cash receipts were given which may be comprising of the unaccounted receipts of all 5 entities subjected to search & seizure operation. Shri Ramesh K....
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.... M/s. Ace Tyres (P) Ltd is not matching with the details as given by the Assessing Officer while recording the reasons for reopening of the assessment in case of Ace Tyres (P) Ltd. Therefore, at the time of recording the reasons, the Assessing Officer was not reasonably ascertain the amount of unaccounted income escaped the assessment for the A.Ys 2014-15 to 2018-19. Even these details as recorded by the Assessing Officer in the reasons for reopening of the assessment as well as in the assessment order are not matching with the details as furnished by Shri Ramesh Kumar Sanaka being reproduced in the statement recorded u/s. 132(4) of the Act as well as the actual transaction as found in the Laptop of Shri Ramesh Kumar Sanaka. The total sum of the receipt and payment side of the Excel Sheets as taken from the Laptop of Shri Ramesh Kumar Sanaka are Rs. 233,32,59,032/- and Rs. 231,50,84,420/- respectively. Therefore, the net difference of the receipt and payments of the total transactions as found in the Excel sheets taken from the Laptop of Shri Ramesh Kumar Sanaka is less than Rs. 2 crores. For ready reference, some of the transactions found in the said Excel sheets are reproduced as....
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....s escaped assessment amounts to or is likely to amount to fifty lakh rupees or more; Provided further that the provisions of this sub-section shall not apply in a case for the relevant assessment year beginning on or before 1st day of April, 2021 if a notice under section 148 or section 153A or section 153C could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub- section (1) of this section or section 153A or section 153C, as the case may be], as they stood immediately before the commencement of the Finance Act, 2021: If a notice u/s. 148 or section 153A or section 153C could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this section or section or section 153A or section 153C, as the case may be, as they stood immediately before the commencement of the Finance Act, 2021. Provided further that the provisions of this sub-section shall not apply in a case, where a notice under section 153A, or section 153C read with section 153A is required to be issued in relation to a search initiated....
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....oceeding under section 148A is stayed by an order or injunction of any court, shall be excluded: Provided also that where immediately after the exclusion of the period referred to in the immediately preceding proviso, the period of limitation available to the Assessing Officer for passing an order under clause () of section 148A does not exceed seven days], such remaining period shall be extended to seven days and the period of limitation under this sub- section shall be deemed to be extended accordingly. Explanation - For the purposes of clause (b) of this sub- section, "asset" shall include immovable property, being land or building or both, shares and securities, loans and advances, deposits in bank account. (1A) Notwithstanding anything contained in sub-section (1), where the income chargeable to tax represented in the form of an asset or expenditure in relation to an event or occasion of the value referred to in clause (b) of sub- section (1) has escaped the assessment and the investment in such asset or expenditure in relation to such event or occasion has been made or incurred, in more than one previous years relevant to the assessment years within....
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....le of scrap or commission income etc, as well as the expenditure incurred in relation to the business activity would not constitute of an asset in terms of section 149(1)(b) of the Act. It is also a matter of fact and record that these transactions as found in the Laptop in a software FOCUS 5.5 are not in the nature of any accounts much less the books of account. These are the simple details of cash receipts and cash payments in respect of the transaction of scrap sale etc, as well as payment towards expenditure and that too the consolidated details of the entire Exel Group not a separate account of each company is maintained. Further, these are only the details of selective transaction in cash and not the transactions of other then cash. Therefore, these details found in the Laptop of the Sr. Accounts Manager, Shri Ramesh Kumar Sanaka would not constitute the books of account or parallel/duplicate books of account and consequently would not fall in the ambit of sub clause (iii) of clause (b) of section 149(1) of the I.T. Act. 24. Once the case of the assessee does not fall in the ambit of clause (b) of section 149(1) of the Act, then the reasons recorded by the Assessing ....
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....amounts of receipts and payment to each of the group companies, the Assessing Officer has though recorded 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 section 149(1)(b) of the Act. However, not a single word is stated by the Assessing Officer either in the reasons recorded for reopening of the assessment or in the assessment order to prima facie show that the income escaped assessment represents an asset and further what kind of an asset. Similarly, these details as recorded in the software Focus 5.5 in the Laptop of Shri Ramesh Kumar Sanaka do not constitute the entries in the books of account, therefore, two statements of the Assessing Officer in the reasons recorded for reopening of the assessment is very vague and without any basis. The Assessing Officer ought to have given the minimum description of the assets and the nature of the entries in the books of account so as to bring the case in the ambit of section 149(1)(b) of the Act, to the extent that the conditions provided in sub clause (i) and sub clause (iii) of clause (b) of section 149(1) of the Act satisfied. It is pertinent....
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.... out an exception in the cases where a search is initiated u/s. 132 or books of account, other documents or any asset are requisitioned u/s. 132A of the Act in the case of the assessee on or after 1/4/2021. Therefore, only because of this proviso, the Assessing Officer need not to conduct any inquiry u/s. 148A before issuing notice u/s. 148 of the Act. In the case in hand, though the search was conducted in the case of the assessee u/s. 132 of the Act on 4th January, 2023, however, the alleged incriminating material which is the basis of the initiation of proceedings u/s. 147/148 of the Act is found and seized from the possession of Shri Ramesh Kumar Sanaka under a separate search & seizure operation. Thus, that being the case, the proceedings u/s. 147/148 could be initiated only as per clause (b) and clause (c) of the proviso to section 148A of the Act. For ready reference, section 148A is quoted as under: "148A. The Assessing Officer shall, before issuing any notice under section 148-, (a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped ....
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....aining to income chargeable to tax escaping assessment for any assessment year in the case of the assessee. Explanation.- For the purposes of this section, specified authority means the specified authority referred to in section 151. Prior approval for assessment, reassessment or re- computation in certain cases. 148B. No order of assessment or reassessment or re- computation under this Act shall be passed by an Assessing Officer below the rank of Joint Commissioner, in respect of an assessment year to which clause () or clause or clause (ii) or clause (iv) of Explanation 2 to section 148 apply except with the prior approval of the Additional Commissioner or Additional Director or Joint Commissioner or Joint Director." 27. Therefore, if the Assessing Officer has not followed the procedure as provided in clause (b) and clause (c) of the proviso to section 148A of the Act, and initiated proceedings on the premises that the case of the assessee falls under clause (a) of 1st proviso to section 148A, then the approval/sanction granted by the DGIT-(Inv) u/s. 151 of the Act is also not based on the verification and application of mind on the relevant re....
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....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 each of the group companies of Exel Group. The next important aspect was ignorance or wrong perception was formed by all the authorities r....
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....uffers 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 section 149(1) requires that the income chargeable to tax should be represented in the form of (i) an asset, (ii) expenditure in respect of a transaction....
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....erfered 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 sanction. The SLP filed by the Revenue was also dismissed by the Hon'ble Supreme Court reported in 237 Taxmann.com 378. ....
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....s 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 der u/s. 148A(d) AND/OR issuance of notice under section 148 of the Income-tax Act, 1961? Remarks: Approved under section 148 A(d) as a fit case. Name: Rajat Bhansal Designatgion PCCIT Delhi Date: 20/0-3/2023 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 safeguard and has to be meaningful and not merely ritualistic or formal. The reasons are....
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.... 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 where the Income-tax Officer merely thought that it is a case only for investigati....
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....ut, 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 Court, while following Chhugamal Rajpal in the case of Ess Advertis....
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.... 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 Id 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 Id AR are constrained to reject the same. 8. Adverting to the claim of the Id 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, ie, 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 satisfied on the reasons record by the Assessing Officer ....
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....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 the A.O. is required to get the approval ....
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....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 the satisfaction could in law be only with respect to....
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....ording 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, I 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 doing so, no error has been committed warranting reconsideratio....
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.... 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 section148 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, ie, 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, that the aforementioned judgment of the Hon'ble High Court of Madhya....
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....ders 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." 14. In this view of the matter and considering the facts and circumstances of the case and also by respectfully following the Order dated 24.09.2025 of ITAT, Hyderabad Bench, Hyderabad in the case of M/s. ACE Tyres (P) Ltd., Hyderabad vs. ACIT, Central Circle-1(2), Hyderabad (supra), we are of the considered view that notice issued by the Assessing Officer u/sec.148 of the Act, in consequence to search operation conducted u/sec.132 of the....
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....ed to be assessed by (D) Search party consisting of SI No Name Designation Office 01 Bandla Dinesh Aditya DDIT (Inv.) Unit-I (3), Hyderabad 02 Vavilala Rakesh Kumar IT O/o The DDIT(Inv.), Unit-1(3), Hyderabad. 03 Jaya Rama Raju G O/o The Addi, CIT(Inv.), AU-4(3), Hyderabad. 0-1 G. Ganga Mallesh Steno 0/o The JCIT(BPU), Unit-1, Hyderabad B. Ramesh MTS O/o The Addl. CIT, Range-1, Hyderabad O/o The DDIT(Inv.), Unit-1(3), Hyderabad. O/o The Addi, CIT(Inv.), AU-4(3), Hyderabad. 0/o The JCIT(BPU), Unit-1, Hyderabad O/o The Addl. CIT, Range-1, Hyderabad (E) Name and complete address of Panchas : 2 Sri Mohd Feroz Khan S/o Mohd. Ä°brahim Khan, 17-1-375/31/A, Husnabad, Santosh Nagar, Hyderabad - 500059. 1. Sri P. Madhusudhan Rao, Flat No. 301, Varija Enclave, Gudimalkapur, Mehdipatnam. Hyderabad - 500063. On being called by Sri Bandla Dinesh Aditya, DDIT [Inv.) on 04.01.2023 at 06.50 a.m./p.m. we, the above named panchas, presented ourselves at the above place of search. The authorized officer, Bandla Dinesh Aditya, DDIT (Inv.) showed the warrant of authorization dated 03.01.2023 issued under section 132 of the income tax Act 1961 / 37Aof t....
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....h 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 scaled 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. Signature of the Panchas with date 2 1-1/23 Signature of the Authorsied Oficer Signature of the person receiving the copy of the ganchnama Document 4 3 ANNEXURE-A INCOME TAX DEPARTMENT, HYDERABAD PAGE NO.01 DATE OF SEARCH: 04.01.2023 LIST OF A/C.BOOKS, LOOSE SHEE....
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....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 assessce 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. 05/01/23 Witness-1 05/0/23 Witness-2 वी. विवेक ग-विहार à¤à¤¾à¤Šà¤¨à¥‡. Authorised Officer This-( ...... 0 11), Hyderabad 5/1/25 Assessee Document 7 PANCHANAMA Party No. MARS-1 M/s Excl Rubber Private Limited M/s Ace Tyres Private Limited M/s Vilas Polymer Private Lanned M/s Spinnmax Tyres Private Limited M/s Lexus Machines Private Limited (A) Warrant m the case of : Plot No. 7, Thrushna Building, TGHC Layout, Infocity, Madhapur, Hyderabad, Telangana [H] Warrant to search Details & Ownership of place of searchi (C) (Al and (B) stated to be assessed by....
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....used the same and to Shri Jwala Prasad, Anst Accounts Minugeriof M/s Excl Rubber Private Lamuted subsequently, whe, after reading the said withor mation, signed at in our presence in token of having perused the same Document 8 87 tempered with-as norented in the encinmuren The above mentioned search party offertil themselves for personal searen bekire commencing the search which was taken / declined A search of the above mentioned place was carried out by the said party in war presence in an orderly manner without hurting the sentiments of any of the occupants of premises Nothing untoward /-the-events narrated-in-the enckimires happened in the course of the search 5 In the course of the search (a) The following were found and Seized Books of accounts, other documents and digital evidence as per Annexure Cash of Ra. 5,51.35,000/- has been found and out of that cash of Rs 5,40,00,000/- has been seized as detailed in Annexure "B" b) The following were found but not seized ; b) Gold coins of net weight 2067 grams as per Annexure 'C'. 6. In the course of the search, the authorized officer Sri V A T Venkata Kumar recorded the statement (s) of Shri Kullac....
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....3-14 19,34,74,960 4 2014-15 20,01,18,451 5 2015-16 38,12,10,814 6 2016-17 29,42,33,365 7 2017-18 28,17,53,376 8 2018-19 12,59,09,850 12,26,00,531 24,85,10,381 9 2019-20 10,34,67,587 26,30,10,949 36,64,78,536 10 2020-21 8,58,43,158 9,45,63,382 18,04,06.540 11 2021-22 8,27,85,374 2,51,95,170 10,79,80,544 12 2022 (Till 31.12.2022) 5,22,24,341 1,12,66,627 6,34,90,968 45,02,30,310 51,66,36,659 2,51,76,51,315 172 40 663 1 ATIV Kumar 06/01/2 6/1/2020 LA TV KUMAR IR'S. Document 10 2,33,72,58,032 2,31,50,84,420 2004-2021-529 [7,00 500 1.31.415 211 000 23-44- 2055 02k 200 bags cement uale uting changes . esti pass 01-05-2011Cat 450 Repairs & Mieteharce - Factory Document 11 Annexure-A2 Proforma for approval by the Specified Authority 1 2. Name of the assessee Address & e-Mail of the assessee M/s Ace Tyres Private Limited 314 & 315, Coca Cola Road, Ameenpur Road, Bachupally Village, Hyderabad 3. PAN AADCA2210N 4. Status Company Circle/Ward/Range/CITCharge Central Circle-1(2), Hýd 6. Assessment year 2015-16 7. The quantum of income which has escaped assessment Rs.6,08.84....