TaxTMI 
TaxTMI 
2026 (8) TMI 1565
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....nce. 2. We find that the assessee has raised a ground in its Cross Objection challenging the validity of assumption of jurisdiction u/s 147 of the Act on the ground that the approval for reopening has been granted by the competent authority under section 151 of the Act in a mechanical manner without due application of mind. We deem it fit to first address the assumption of jurisdiction u/s 147 of the Act. 3. We have heard the rival submissions and perused the material available on record. The assessee has filed its return of income on 08.07.2013 for AY 2013-14 declaring total income of Rs. 32,41,920/-. The ld AO reopened the assessment of the assessee u/s 147 of the Act vide issuance of notice u/s 148 of the Act on 28.03.2021. The reasons recorded for reopening the assessment together with the approval granted by the learned Principal Commissioner of Income Tax (ld PCIT in short), 12, New Delhi in terms of section 151 of the Act. This approval under section 151 of the Act was granted on 28.3.2021. On perusal of the proforma seeking approval u/s 151 of the Act, we find that the ld PCIT had stated that as under:- On careful perusal of information received, relevant det....
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....2022, notice under Section 143(2) of the Act was issued by respondent No. 3 on the basis of information received by respondent No. 1 from Insight portal. Petitioner was identified as one of the parties/entities who made financial transactions with BKR Capitals Pvt. Ltd. He had made a transaction of Rs. 31,07,963/- with BKR Capitals Pvt. Ltd. to bring his unaccounted money/cash into his books of accounts to avoid tax during the relevant AY 2015-16. 6. Vide letter dated 09.02.2022, petitioner filed detailed objections to the reasons recorded, specifically objecting to the re-opening without there being valid reasons to believe. According to him, the reasons recorded for issuing the impugned notices were based on incorrect facts. He pointed out that respondent No. 1 has overlooked the fact that petitioner had obtained a loan of Rs. 45 lakhs from BKR Capitals Pvt. Ltd in the AY 2014-15 for which interest amounting to Rs. 1,19,959/-was also paid during the AY 2014-15 and the assessment for the said AY 2014-15 was completed under Section 143(3) after scrutiny. He also submitted that the said loan to the tune of Rs. 31,07,963/- was repaid in the year under consideration along wit....
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....ved at from the record and therefore the conditions envisaged under Section 151 of the Act stand satisfied. 12. Before considering the merits of the contentions of the parties, it would be apposite to examine the relevant legal framework. 13. Section 151 of the Act, as it stood prior to the substitution by Act of 13 of 2021 is reproduced hereunder:- "151. Sanction for issue of notice.-(1) No notice shall be issued under Section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice. (2) In a case other than a case falling under sub-section (1), no notice shall be issued under Section 148 by an Assessing Officer, who is below the rank of Joint Commissioner, unless the Joint Commissioner is satisfied, on the reasons 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 Chie....
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....e had held as follows:- "13. The primary grievance 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 gi....
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....ession'. The most that could be said for the stock reason is that it is a general description of the process adopted in arriving at a conclusion. 28.... If that had been done, facts on service records of officers considered by the Selection Committee would have been correlated to the conclusions reached. Reasons are the links between the materials on which certain conclusions are based and the actual conclusions. They disclose how the mind is applied to the subject-matter for a decision 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, the Hon"ble Supreme Court refused to consider the affixing of signature alongwith the noting "Yes" as valid approval and had held as under:- "5. -- 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 Commi....
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....istinguishes the approval granted using the expression "Yes" by citing Central India Electric Supply, which has already been discussed above. The decision in the case of Experion Developers P. Ltd. would also not come to the rescue of the Revenue as the same does not deal with the expression used in the instant appeal at the time of granting of approval. 23. Therefore, it is seen that the PCIT has failed to satisfactorily record its concurrence. By no prudent stretch of imagination, the expression "Yes" could be considered to be a valid approval. In fact, the approval in the instant case is apparently akin to the rubber stamping of "Yes" in the case of Central India Electric Supply." 19. The decision in "Pioneer" case was followed by us in the case of Pr. CIT v. MDLR Hotels (P.) Ltd. [IT Appeal No. 593 of 2023], wherein, the Competent Authority had granted approval in terms of Section 153-D of the Act to as many as 246 proposed assessments by way of a single letter of approval and we had affirmed the finding of the ITAT that such approval has been granted mechanically without application of mind. 20. As noticed aforesaid, we are of the firm opinion that t....