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2024 (3) TMI 574 - AT - Income TaxReopening of assessment u/s 147 - unexplained credit u/s. 68 - discharge of initial onus or not? - Mandation to dispose off the assessee objections by AO - HELD THAT:- As per order dated 07.11.2016, the copy of reasons recorded were supplied to the authorized representative of the assessee on 04.11.2016 and objections were filed on 03.11.2016. Thus, what the A.O. is disposing as per order dated 07.11.2016 cannot be the objections raised in letter dated 03.11.2016 as the copy of the reasons, according to own admissions of the A.O. was provided to the assessee only on 04.11.2016. It can be seen from the reply dated 31.10.2016 of the assessee, it did not submit any objection with regard to reassessment proceedings initiated as per notice dated 29.03.2016 as by that time copy of reasons recorded in pursuance to notice dated 29.03.2016 were not supplied to the assessee. On these facts the disposal of objections for initiating reassessment proceedings by an order dated 07.11.2016 is a non-judicious attempt of the AO to dispose the proceedings in a manner not known in law. Therefore, the reassessment proceedings are bad in law as the AO did not follow the mandatory procedure laid down in the case of GKN Driveshaft v. ITO [2002 (11) TMI 7 - SUPREME COURT] Valid sanction u/s. 151 or not? - It can be seen that the sanction has been granted only as per letter dated 24.03.2016 which does not bear the signature of PCIT and it is only a letter wherein ACIT is informing the AO that he is directed to communicate the approval given by the PCIT. The Performa attached with the same also does not bear the signature of PCIT. Thus, it is a case where no approval has been granted by PCIT u/s. 151 of the Act as approval should be given only after application of mind by the approving authority. It can be seen from the wording of letter the so called approval has been given subject to recording of reasons. The reasons are recorded after approval letter dated 24.03.2016. The reasons recorded and provided to the assessee also not bearing any date and there is only typed date in Performa which is 17.03.2016. No proper approval has been given by the approving authority, which would render the initiation of reassessment proceedings as invalid in the eyes of law. Thus we hold that the reopening of assessment is bad in law.
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