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2019 (3) TMI 394 - HC - Income TaxReopening of assessment - Application of mind while granting sanction u/s 151 - sanction granted by the Commissioner of Income Tax on a complete misreading of the reasons - HELD THAT:- The reasons for sanction is different from the reasons recorded and thus appears to be without application of mind to the reasons recorded. We note that the para 3(ii) of reasons recorded in support of the impugned notice records the activity of one Himanshu Verma group in providing accommodation entries while the order granting sanction proceeds on the basis that it is the respondent assessee who is engaged in providing accommodation entries. Order granting the sanction records that the funds of public limited company are being siphoned of to the private limited companies. This is not evident at all from the reasons recorded which makes references only to Private Limited companies being used as vehicles for providing accounting entries by the Himanshu Verma group. Thus, on the face of it, the sanction granted is bad in law. Grant of the sanction by the CIT under Section 151 of the Act, is not a mechanical act on his part but it requires due application of mind to the reasons recorded before granting the sanction. This has been so provided as to safeguard against issue of reopening notice (which seek to disturb the settled position) to ensure that assessee is not troubled with reopening issues without satisfactory reasons. Therefore, it must pass muster of the Superior Officer in the context of Sections 147 and 148 of the Act, before it is issued to the party. - Decided in favour of assessee.
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