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2022 (3) TMI 209 - AT - Income TaxReopening of assessment u/s 147 - Addition of unexplained cash-credit in terms of sec.68 - as argued approval granted by Addl. CIT u/s 151(2) was given in a mechanical manner without application of mind - HELD THAT:- Addl. CIT has given the approval under a wrong section i.e. section 147(b) of the Act, whereas, the said section 147(b) stood omitted from Income Tax Act w.e.f. 01.04.1989. That the approval was given by the Addl. CIT under non-existent section, in a mechanical manner, without application of mind and hence, in the absence of valid approval as mandated by law u/s 151, the reopening of the assessment u/s 147 r.w.s. 148 of the Act is bad in law and without jurisdiction and hence is liable to be quashed. As per the provisions of section 147 of the Act, the Assessing Officer (in short ‘AO’) is authorized to reopen the assessment proceedings, if he has reason to believe that any income chargeable to tax has escaped assessment. The courts of law have time and again held that such a reason to believe that the income of the assessee has escaped assessment should be based on some tangible material which comes to the knowledge of the AO. An assessment cannot be reopened under section 147 of the Act on the basis of mere suspicion. The Ld. Counsel for the assessee, as discussed in earlier paras of this order, has placed reliance on the reasons recorded by the AO for formation of belief that the income of the assessee has escaped assessment to submit that the same are not valid reasons. As approval granted by the Addl. CIT reveals that the Assessing Officer had mentioned the relevant section as ‘147(b)’ which admittedly has been omitted from the Statute w.e.f. 01.04.89 and further without application of mind to the contents of the aforesaid proposal, the Ld. Addl. CIT granted approval in a mechanical manner by saying ‘Yes’, even without application of mind that the approval has been sought under wrong section. The aforesaid contents of the approval clearly shows that the approval has been granted by the Addl. CIT in a mechanical manner without application of mind. In the case of Omkam Developers Ltd. [2021 (5) TMI 414 - ITAT DELHI] the Coordinate Bench of the Tribunal while relying upon the decision in the case of PCIT Vs NC Cable Ltd [2017 (1) TMI 1036 - DELHI HIGH COURT] has held that mere mentioning ‘Yes’ for approval without any evidence of application of mind amounts to mechanical approval by CIT. Under the similar circumstances, wherein, the section for invoking reassessment has been recorded as section 147(b), the Coordinate Bench of the Tribunal observed that this showed that the Assessing Officer had filled proforma in a mechanical manner and the Ld. CIT(A) has also approved the same mechanically. Since the approval in this case was granted in a mechanical manner without application of mind by the Ld. Addl. CIT, therefore, the same does not constitute a valid approval u/s 151 of the Act and hence, the assessment of jurisdiction to reopen the assessment by the Assessing Officer on the basis of invalid approval was bad in law. - Decided in favour of assessee.
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