TMI Blog2018 (7) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... ner, while granting the sanction just noted the word “Yes” and affixed his signature thereunder, he had only mechanically accorded permission, and that the important safe-guards provided in section 151 were lightly treated. The approval in the case at hand is clearly an approval granted without application of mind, and therefore, it is not at all a legally tenable approval. - Decided in favour of assessee. - I.T.A No. 238/Agra/2018, I.T.A No. 129/Agra/2018 - - - Dated:- 19-6-2018 - SHRI A. D. JAIN, JUDICIAL MEMBER Assessee by Shri Anurag Sinha, AR. Revenue by Shri Waseem Arshad, Sr.DR. ORDER I.T.A No. 238/Agra/2018 This is assessee s appeal for assessment year 2008-09, taking the following grounds: 1. BECAUSE, upon due consideration of facts and in the overall circumstances of the case 'appellant' denies its liability to be assessed in terms of Notice dated 26.03.2015 said to be issued under section 148 of the 'Act'. 2. BECAUSE, the Ld CIT(A) has not appreciated the fact that the purported 'Reasons' are No 'Reasons' in the eyes of Law. The so called 'Reasons' do not show any application of mind on par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No. 988/Del/2018. 2. Virat Credit Holdings (P) Ltd. Vs. ITO , in CO No. 57/Del/2012 in ITA No.89/Del/2012. 3. Hari Ram Gupta vs. ITO , ITA No.5111/Del/2013. 4. Tara Alloys Ltd. Vs. ITO , in ITA No.2421/Del/2017. 6. On the other hand, the ld. DR has placed strong reliance on the approval granted by the Additional CIT. The following decisions have been relied on: i. S. Narayanappa vs. CIT , 63 ITR 219 (SC). ii. Chhugamal Rajpal vs. S.P. Chaliha , 79 ITR 603 (SC). iii. CIT vs. M/s G.S. Tiwari and Co. , 38 taxman.com 259 (All). iv. M/s Ginni Filaments vs. CIT , Writ Tax No. 1402 of 2004 (All. H.C.) v. Sushrut Institute of Plastic Surgery vs. Dy. CIT , Misc. Bench No 219 of 2014 (All. H.C.) vi. Sanjay Kumar Agarwal, HUF vs. DCIT , ITA No.290/Agra/2010 (ITAT-Agra). vii. ITO vs. Purushottam Das Bangur , 224 ITR 362 (SC). viii. Anil Kumar Singhal vs. ITO , 33 taxman. Com 434 (Agra Trib.) (SMC Bench). ix. Abdul Majid vs. CIT , 281 ITR 366 (All). 7. Heard. In the above quoted approval granted by the Additional CIT, the approval has been granted by observing thus: Ji Haan Main Santusht Hoon. 8. Translated, this approval stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ble High Court of Madhya Pradesh in the case of CIT vs. S. Goyanka Lime Chemicals Ltd. reported in (2015) 56 taxmann.com 390 (MP) has held as under:- 7. We have considered the rival contentions and we find that while according sanction, the Joint Commissioner, Income Tax has only recorded so Yes, I am Satisfied . In the case of Arjun Singh vs. Asstt. DIT (2000) 246 ITR 363 (MP), the same question has been considered by a Coordinate Bench of this Court and the following principles are laid down:- The Commissioner acted, of course, mechanically in order to discharge his statutory obligation properly in the matter of recording sanction as he merely wrote on the format Yes, I am satisfied which indicates as if he was to sign only on the dotted line. Even otherwise also, the exercise is shown to have been performed in less than 24 hours of time which also goes to indicate that the Commissioner did not apply his mind at all while granting sanction. The satisfaction has to be with objectivity on objective material. 8. If the case in hand is analyzed on the basis of the aforesaid principle, the mechanical way of recording satisfaction by the Joint Commissioner, which acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of assessment u/s 148 of the Act. 11. In the case of Hari Ram Gupta Vs ITO , in ITA No. 5111/Del/2013 in ITAT, Delhi vide its order dated 07.07.2016 (ABP-63-67) has quashed the assessment based on approval mentioning , as in the present case, Yes I am satisfied (Para 6). 12. Again, the ITAT, Delhi Bench in the case of M/s Tara Alloys Ltd. Vs. ITO , in ITA No. 2421/Del/2017 (APB- 68-108) likewise quashed the assessment based on approval mentioning Yes I am satisfied that it is a fit case for reopening u/s 147 . (Paras 8 to 10) 13. Apropos the decisions cited by the ld. DR, they are dealt with as follows. 14. In the Hon ble Supreme Court s Judgment in the case of Parashuram Pottery Works Co. Ltd. Vs. ITO , 106 ITR 1 (SC) (relied on by both the sides, copy at APB- 109-118), the Hon ble Apex Court held that It has been said that the taxes are the price that we pay for civilization. If so, it is essential that those who are entrusted with the task of calculating and realizing that price should familiarize themselves with the relevant provisions and become well versed with the law on the subject. Any remission on their part can only be at the cost of the national ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olved therein. 19. In Sushrut Institute of Plastic Surgery vs. Dy. CIT , Misc. Bench No. 219 of 2014 (All), the Hon ble High Court, upholding the validity of the notice u/s 148, found that the only requirement of section 147 is that the Assessing Officer must have good reason to believe that some income had escaped assessment. It was observed that A bare perusal of letter dated 14.05.2013 (Annexure No.4) written by the Deputy Commissioner of Income Tax Range-VI- Lucknow, shows that in the return for assessment year 2006-07 the petitioner declared its total income Nil . However, during the said year share capital increases from ₹ 47,82,000/- to ₹ 58,82,000/- and secured loan increases from ₹ 1,23,54,001/- to ₹ 2,78,21,882/- which shows the increase of ₹ 1,54,67,871/- Investment in building increased from ₹ 7,09,770/- to ₹ 1,50,99,423/- but the petitioner did not explain the source of increment, similarly other current assets also increased. Therefore, apart from the District Valuer Report we find that there are sufficient reasons for the Assessing Officer to believe that the income chargeable to tax has escaped assessment. Thus we find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee moved an application for addition of grounds in grounds of appeal before Tribunal on the ground that since the reasons were not recorded before issuing the notice, the requirement of section 148(2) was not complied with and, therefore, the proceedings were invalid and void ab initio. However, the ITAT did not permit the assessee to raise this plea. On appeal before the Hon ble High Court, it was held that even if a plea, relating to lack of jurisdiction of officer on ground that no reason was recorded before issue of notice under section 148(2), is not raised at the first instance before the assessing authority, it can be raised before the appellate authority at a later stage and that therefore, the Tribunal had erred in not allowing the assessee to raise the additional grounds challenging the validity of the assessment order on the basis of illegal initiation of proceedings under section 148. 24. Coming back to the facts of the present case, the ld. Additional CIT granted the approval by observing merely that he was satisfied. 25. Sections 147 and 148 of the IT Act, it is trite, are charter to the Revenue to reopen completed assessments. Section 151 of the Act prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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