TaxTMI 
TaxTMI 
2026 (8) TMI 122
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....owever proceedings u/s. 147 of the Act were initiated in his case by issuance of notice u/s. 148 of the Act dated 31.03.2021 because information was provided by the I & CI, Delhi that during the year the assessee has sold an immovable property for Rs. 12,00,000/- whereas the circle rate of the property was Rs. 22,50,000/ -. As per the provisions of section 50C of the Act, the assessee had not declared capital gain on sale of property, thus the JAO has initiated action u/s. 147 of the Act, requiring the assessee to file his return wherein the assessee has filed his return in response to the notice u/s. 148 on 21.04.2021 declaring total income of Rs. 7,15,670/ -. Thereafter, notice u/s. 143(2) of the IT Act dated 06.12.2021 along with the notice u/s. 142(1) of the Act dated 08.02.2022 and 24.02.2022 were issued to the assessee. Along with the notice u/s. 142(1) of the Act, the reasons of reopening were provided to the assessee. The ld. AO observed that the assessee has not provided any documentary evidences in pursuance of notice u/s. 142(1) and was again vide notice dated 19.03.2022 was asked to provide the relevant details. In pursuance of the same along with the reply dated 19th M....
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....ddition made by the AO on that count was confirmed. Regarding the addition of Rs. 53,25,000/- as unexplained investment u/s. 69 of the Act, the claim of the assessee to the extent of Rs. 38,70,000/- was accepted on the basis of maturity of FDR and for the remaining balance amount, the addition was confirmed, thus the appeal of the assessee was partly allowed. 4. Aggrieved by the impugned order the assessee is in appeal has raised the following grounds of appeal: "1. That the order passed by the Ld. Commissioner of Income Tax (Appeals) (herein after referred to as "the CIT(A)") dated 26.03.2025 allowing partially the prayer of the assessee is not maintainable, as per the provisions of Section 144/147 of the Income Tax Act, 1961 (herein after referred to as "Act), It is erroneous and bad in law and on facts of the case and, hence not sustainable in the eyes of the Law. 2. That the Ld. CIT (A) has erred in law and on the facts by not allowing the prayer in full and giving only a partial relief, thereby upholding the impugned assessment order dated 30.03.2022 without appreciating that the impugned assessment order is without jurisdiction, bad in law and deserves to....
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....e of hearing." 5. We have heard the ld. AR and the ld. DR. The assessee/appellant has made an application for admission of additional grounds of appeal as per Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963 and thus requested to admit the following legal grounds as under: "1. That, on the facts and in the circumstances of the case and in law, the reassessment proceedings initiated under sections 148/147 of the Act are illegal, bad in law and void ab initio, as the notice under section 148 was issued without recording the reasons to believe, as mandatorily required under section 148(2) of the Act. 1.1. That the learned CIT(A) has failed to adjudicate and appreciate that the reasons to believe supplied to the assessee during the assessment proceedings were undated and did not bear any stamp or Document Identification Number (DIN), thereby failing to establish that such reasons were recorded prior to the issuance of the notice under section 148 of the Act. 1.2. That the learned CIT(A) has further failed to appreciate that the purported reasons to believe were vague and recorded without due application of mind, as the same were framed without co....
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....d and mechanical approval u/s. 151 of the Act. 9. In view of these facts and the submissions made and while relying the case of the Hon'ble Supreme Court in NTPC v. CIT (supra), we are inclined to admit the additional grounds as the same being purely legal grounds and no new facts are required to be brought on record. 10. We have thus heard the parties with respect to the legal grounds so raised before us as additional grounds. 11. In support of oral arguments regarding the additional ground, the ld. AR has also filed written arguments to establish before us that the revenue has failed to show that the 'reasons of reopening' were recorded prior to the issuance of notice u/s. 148 of the Act which is mandatory requirement u/s. 148(2) of the Act. The ld. AR has further tried to impress upon us that the approval u/s. 151 which is undated and has been granted in a mechanical manner. The written arguments on both the issues of extracted below as under: "REGARDING MERITS OF THE ADDITIONAL GROUNDS: A. Re Grounds 1 to 1.2: Reassessment Proceedings are invalid, illegal and without jurisdiction since the purported reasons to believe supplied during the a....
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....section 148 of the Act, failing which the entire reassessment proceedings are rendered void ab initio. 8. As stated earlier, the reasons to believe were supplied nearly end of the proceedings vide notice dated 08.02.2022 through separate attachment, which contained the proforma of reasons to believe and approval obtained u/s. 151 of the Act, however, both the reasons to believe as well the approval so obtained along with the attachment were undated, unstamped and did not bear any DIN, which could establish that the reasons were actually recorded before issuance of the notice u/s. 148 of the Act. 9. The assessee had specially raised the aforesaid objection vide his reply dated 28.03.2022, which is enclosed at page no. 61 of the PB. However, the AO did not pass any order disposing of objections of the assessee against the reasons to believe. Even, the AO, at para 8, page no. 4-5 of the assessment order, in very casual manner stated that JAO had not provided the reasons at the time of issuance of notice u/s. 143(2) of the Act dated 06.12.2021, He also stated that the JAO had recorded the reasons online through ITBA portal and the competent authority had online approv....
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....nt proceedings are rendered invalid, unwarranted in law, and without jurisdiction. 14. We also place reliance upon the following judicial pronouncements where the reassessment proceedings and consequent assessment order were quashed on the ground of the undated reasons to believe. i. Smt. Prema Mukesh Jhalani v. ITO [2025] 176 taxmann.com 630 (Mumbai - Trib.) [16- 06-2025]: "8. At the very outset, it was argued that the reasons provided to the assessee are undated and therefore it is not possible to verify as to whether the reasons were recorded on or before 28.03.2018 i.e., prior to issuance of notice u/s. 148 of the Act and in this regard, reliance is being placed on the decision of the Coordinate Bench of ITAT in Chiranjeev Lal Agarwal v. ITAT [IT Appeal NO. 598 (ASR) of 2015, dated 15-9-2011], wherein it was decided as under: .................................................................................................................... 9. After having meticulously gone through the orders passed by the Coordinate Bench in the case of Charanji v Lal Aggarwa l (supra), we are of the view that the reassessment order is liable to be ....
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....is reproduced below: 2. At the outset, we have to note that the undated form for recording the reasons for initiating proceeding under section 148 of the Act provided to Petitioner is at variance with the undated form for recording the reasons annexed to the Affidavit-in-Reply. A major part of paragraph 5 - finding of the Assessing Officer - and the entire paragraph 6 containing applicability of the provisions of section 147/151 to the facts of the case mentioned in the reasons annexed to the Affidavit-in-Reply are missing from the reasons annexed to the Petition though it is signed by the same Ankit Verma. We also note that in quite a few cases, date on the reasons or dates in the sanctions being granted are missing. Respondents are directed, henceforth, in all reasons and form for recording approval, the date will be mentioned including the date on which the officers have signed. Whichever authority is granting the sanction shall write the date and time digitally below the signature. Mr. Suresh Kumar is directed to convey these directions to the Principal Chief CIT and CIT(Judicial) who shall, in turn, convey to all officers in the Income-tax Department. This direction h....
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....ay 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.] 18. The satisfaction of higher competent authority is a jurisdictional condition and not mere a formality. What Section 151 requires in substance is that prescribed higher authority actually applied an independent mind on the reasons to believe recorded by the AO and the material based on which such reasons were formed. That independent satisfaction so arrived at by the prescribed competent authority should be discernible from the sanction order passed under section 151. Mere stating "Yes" or "Approved" on the printed format of the reasons to believe without scrutiny and application of mind have not been accepted as valid sanction/satisfaction by the Courts across the Country. 19. In the present case, the sanction/satisfaction was purportedly obtained by the AO from the Addl. CIT, Range-67, New Delhi which is enclosed at page no. 34 of the PB. The relevant sanction/satisfaction is also attached below for your kind consideration: 20. At the very outset, the aforesaid satisfaction not....
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....are of the opinion that if only he had read the report carefully, he could never have come to the conclusion on the material before him that this is a fit case to issue notice under section 148. The important safeguards provided in sections 147 and 151 were lightly treated by the Income-tax Officer as well as by the Commissioner. Both of them appear to have taken the duty imposed on them under these provisions as of little importance. They have substituted the form for the substance. In the result this appeal is allowed, the order of the High Court is set aside and the impugned notice quashed. The respondent No. 2 shall pay the costs of the appellant both in this court and in the High Court." b) CIT, Jabalpur (M.P) v. S. Goyanka Lime & Chemical Ltd. [2015] 64 taxmann.com 313 (SC): High Court by impugned order held that where Joint Commissioner recorded satisfaction in mechanical manner and without application of mind to accord sanction for issuing notice under section 148, reopening of assessment was invalid - Whether Special Leave Petition filed against impugned order was to be dismissed - Held, yes [In favour of assessee] c) Capital Broadways (P.) Ltd. ....
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....ce raised in the instant appeal relates to the manner of recording the approval granted by the prescribed authority under Section 151 of the Act for reopening of assessment proceedings as per Section 148 of the Act. XXXX xxxx xxXX 17. Thus, the incidental question which emanates at this juncture is whether simply penning down "Yes" would suffice requisite satisfaction as per Section 151 of the Act. Reference can be drawn from the decision of this Court in N. C. Cables Ltd., 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 :- "11. Section 151 of the Act clearly stipulates that the Commissioner of Income-tax (Appeals), who is the competent authority to authorize 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....
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....the same is extracted herein under: 15. Thus we have noticed that the main stress of the arguments raised on behalf of the assessee/appellant was that the reasons for reopening along with sanction u/s. 151 of the Act are undated and the said sanction u/s. 151 has been granted in a mechanical manner without application of mind. Therefore, we are relying on the judgement of the co-ordinate Bench in the case of Sh. Prahlad Singh v. ITO-3(2) in ITA No. 3375/Del/2017 and SA No. 436/Del/2017 dated 11.05.2018) (Delhi Tribunal) (supra); case of Sh. Prem Mukesh Jhalani v. ITO [2025] 176 taxmann.com 630 (Mumbai Tribunal) dated 16.06.2025 (supra), Chiranjiv Lal Aggarwal v. ITO [2017] 54 ITR (T) 349 (Amritsar-Trib.) order dated 15.09.2016 (supra) and Sterling and Wilson (P) Ltd. [2022] 285 Taxman 468 (Bombay High Court) dated 21.12.2021 (supra) where the assessment order was quashed on account of reason of reopening being undated. Further also relying on the case of Hon'ble jurisdictional High Court in PCIT v. Pioneer Town Planners Pvt. Ltd. (supra) and also on the judgment of Hon'ble High Court of Madhya Pradesh in the case of CIT, Jabalpur v. S. Goyanka Lime & Chemical Ltd., the S....
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....e the subject of excessive relief or allowing of excessive loss or depreciation N.A. 10 Whether the provisions of section 150(1) are applicable. If the reply is in the affirmative the relevant facts may be stated against item no. 11 and it may also be brought out that provisions of section 150(2) would not stand in the way of initiating proceedings u's. 147. No 11 Reasons for the belief that income has escaped assessment 1. Brief details of the ussessce: The assessee is an Individual and PAN is presently lying with this office. 2. Brief details of information: In this case information was received from I&CI, Delhi that during the year the assessee sold an immovable property for Rs. 12,00,000/- whereas the circle rate of the property was Rs. 22,50,000/ -. Therefore, as provisions of Section 50C of the Act while computing the capital gain the amount of Circle rate should have been taken by the ussessee as total sale consideration. 3. Analysis of Information: The ITR of the assessee for the A. Y. 2017-18 has been downloaded from the e-filing portal and noted that the assessee has not reported any transaction in its ITR. The capital gain on the said transfer of capital as....