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2021 (3) TMI 728 - AT - Income TaxReopening of assessment u/s 147 - validity of approval given by Addl. CIT - validity of reasons to believe - bogus share capital / share application money received - HELD THAT:- A perusal of the reasons recorded shows that the name of the companies from whom the assessee company is alleged to have accepted share capital / share application money are different from the companies mentioned in the assessment order from whom the assessee company has actually taken the share capital / share application money. Even the Ld. DR in his written synopsis has also admitted the mistake stating that the same is a typographical error. This clearly shows that neither there was any independent application of mind by the AO while recording reasons nor application of mind by the Addl. CIT while giving approval. The reassessment proceeding was made on wrong and incorrect facts and, therefore ,makes the reopening null and void. In the case of PCIT vs. Meenakshi Overseas (P) Ltd. [2017 (5) TMI 1428 - DELHI HIGH COURT] has held that where reassessment was resorted to on the basis of information from DIT (Investigation) that assessee had received accommodation entry but there was no independent application of mind by Assessing Officer to tangible material and reasons failed to demonstrate link between tangible material and formation of reason to believe that income had escaped assessment, reassessment was not justified. Addl. CIT who has given approval for such reopening has simply mentioned that “ yes, I am satisfied that this is a fit case for issue notice of u/s 148 of I.T. Act”. A perusal of the approval given by the Addl. CIT shows that he has not applied his mind properly and has in a mechanical manner given his approval - Reassessment proceedings initiated by the AO are not as per law and has to be quashed. Reassessment proceedings initiated by the AO by recording wrong and incorrect facts and the approval given by the Addl. CIT in a mechanical manner without application of mind makes the entire reassessment proceedings a nullity - Decided in favour of assessee.
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