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2021 (3) TMI 510 - ITAT DELHIReopening of assessment u/s 147 - reassessment proceedings were initiated beyond the four years - approval granted under section 151 - HELD THAT:- The ‘reason to believe’ has to be that of the AO who is initiating the proceedings and in absence of any independent application of mind and satisfaction of the AO the reason to believe falls in the realm of conjectures. AO has to have tangible material with him and even if the information has come from Investigation wing, the AO must perused the material which has been referred in the said information and examine what is the income which has escaped assessment. Recommendation may come from any person or authority but it is the AO who has to entertain reason to believe based on material before him that income chargeable to tax has escaped assessment. The most crucial material here in this case is that assessee has removed goods without payment of duty and there were invoices which were later shown to be cancelled but nowhere there is any whisper about the invoices nor they have been produced. AO simply appears to have reopened to examine the claim of section 10B and what was the basis and premise before him as to how the claim on examine u/s 10B has incorrect is not coming fore. Mere intimation received from any authority cannot lead to immediate presumption but it needs to be verified by the AO and to apply his mind. Here in this case, even the documents pertaining to Custom & Central Excise Authorities was not available with the AO at the time of initiation of proceedings which fact has been surfaced before us. Thus, we hold that the reasons recorded by the AO do not give jurisdiction to reopen the assessment u/s 147 read with section 148. Sanction not been taken from the appropriate authority as provided u/s 151 - It is seen that in the case of CIT vs. SPL’s Siddhartha Ltd [2011 (9) TMI 640 - DELHI HIGH COURT] wherein approval was taken by the AO from superior authority i.e. CIT, whereas the under the statutory provision, approval was to be taken from JCIT/Addl CIT, it was held that notice issued u/s 148 of the Act is invalid. The issue is squarely covered in favour of the assessee as for reopening of the assessment for the AY 2003-04 and 2004-05 the sanction has been taken from the learned Addl. CIT instead of CIT, as such sanction granted for assumption of jurisdiction is not in accordance with the provisions of section 151 of the Act. Hence, respectfully following the decision of the honourable Delhi High Court, we hold that the notice issued by the AO u/s 148 of the Act for the AY 2003-04 and 2004-05 is bad in law on this ground also. Since we have already quashed the assessment being without jurisdiction under section 147 on the ground that approval granted is mechanical and also for the AY 2003-04 and 2004-05, even the so called approval is not from the competent authority, therefore, other grounds raised by the assessee challenging the assumption of jurisdiction.
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