TMI Blog2014 (1) TMI 1280X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessing officer - the Commissioner has simply put "approved" and signed the report thereby giving sanction to the AO - Nowhere the Commissioner has recorded a satisfaction note not even in brief - it cannot be said that the Commissioner has accorded sanction after applying his mind and after recording his satisfaction - Relying upon United Electrical Co. (P.) Ltd. v. CIT [2002 (10) TMI 86 - DELHI High Court] - the reopening proceedings vis-à-vis provisions of Sec. 151 are bad in law and the assessment has to be declared as void ab initio – Decided in favour of Assessee. - I.T.A. No.611,534/Mum/2004 - - - Dated:- 24-7-2013 - I.P. BANSAL AND SHRI N.K. BILLAIYA, JJ. For the Appellant : Hiro Rai. For the Respondent : Rajen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ld. Counsel that it is mandatory for the AO if he proposes to reopen an assessment 4 years to take a prior sanction from the appropriate Commissioner. To substantiate, the Ld. Counsel relied upon the decision of the Hon'ble Supreme Court in the case of Chhugamal Rajput v. Chaliha [1971] 79 ITR 603. The Ld. Counsel for the assessee argued that while giving the sanction, the Commissioner has mechanically accorded permission without applying his mind as is evident from the copy of the order sheet submitted by the Ld. Departmental Representative which is on our record. The Ld. Counsel further relied upon the decision of the Hon'ble Calcutta High Court in the case of Chanchal Kumar Chatterjee v. ITO [1974] 93 ITR 130 and in the case of Lakhma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . "151. (1) In a case where an assessment under sub-section (3) of section 143 or section 147 has been made for the relevant assessment year, no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of Assistant Commissioner or Deputy Commissioner, unless the Joint Commissioner is satisfied on the reasons recorded by such Assessing Officer that it is a fit case for the issue of such notice : Provided that, after the expiry of four years from the end of the relevant assessment year, no such notice shall be issued unless the Chief Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer aforesaid, that it is a fit case for the issue of such notice. (2) I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner against the question "whether the Commissioner is satisfied that it is a fit case for the issue of notice under section 148 merely noted "Yes" and affixed his signature there under. On these facts, the Hon'ble Supreme Court observed that the important safeguards provided in sections 147 and 151 were lightly treated by the officer and the Commissioner. The Hon'ble Supreme Court further observed that the ITO could not have had reason to believe that income had escaped assessment by reasons of the appellant-firm's failure to disclose material facts and if the Commissioner had read the report carefully he could not have come to the conclusion that this was a fit case for issuing a notice under section 148. The notice issued under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the above mentioned reasons, in our considerate view, Sections 147 and 148 are charter to the Revenue to reopen earlier assessments and are, therefore protected by safeguards against unnecessary harassment of the assessee. They are sword for the Revenue and shield for the assessee. Section 151 guards that the sword of Sec. 147 may not be used unless a superior officer is satisfied that the AO has good and adequate reasons to invoke the provisions of Sec. 147. The superior authority has to examine the reasons, material or grounds and to judge whether they are sufficient and adequate to the formation of the necessary belief on the part of the assessing officer. If, after applying his mind and also recording his reasons, howsoever briefly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed his approval, which was mandatory in terms of the proviso to sub-section (1) of section 151 of the Act as the action under section 147 was being initiated after the expiry of four years from the end of the relevant assessment year. The power vested in the Commissioner to grant or not to grant approval is coupled with a duty. The Commissioner is required to apply his mind to the proposal put up to him for approval in the light of the material relied upon by the Assessing Officer. The said power cannot be exercised casually and in a routine manner. We are constrained to observe that in the present case there has been no application of mind by the Additional Commissioner before granting the approval". 9. The observations of the Hon'ble Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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