TMI Blog2019 (2) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... received from the investigation wing to establish any nexus, even prima facie, with the such information. Initiation of reassessment proceedings u/s. 147 notice u/s. 148 reassessment proceedings and all consequent proceeding and orders, including impugned reassessment and first appellate order, are bad in law and thus, not sustainable and we hold so. - Decided in favour of assessee. - ITA NO.1221/DEL/2018 - - - Dated:- 28-12-2018 - Sh. K. N. Chary, Judicial Member And Dr. Mitha Lal Meena, Accountant Member For the Appellant : Shri Suresh Kumar Gupta, CA For the Respondent : Sh. S.L. Anuragi, Sr. DR ORDER PER, DR. M. L. MEENA, AM: This appeal by the assessee is directed against the order dated 15/12/2017 of the Commissioner of Income Tax, Appeals-XXV [In short CIT(A) ], New Delhi for Assessment Year 2008-09. The assessee has raised following grounds of appeal :- 1. The Ld. CIT(A) has erred both in law and in facts in upholding the validity o f reassessment proceedings and the assessment order ignoring the fact that the Assessing Officer has not assumed jurisdiction u/s 147 o f the Act without complying with the mandatory requirements o f the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of ₹ 10 lacs and ₹ 18000 u/s 68 of the IT Act on account of unexplained cash credit and commission income @1.8 % as expenditure incurred for the said accommodation entries. 4. Aggrieved assessee, filed appeal before the Ld. CIT(A) taking up the subject legal issue, vide ground No.2 and 3 in the 1st appellate Proceedings. The assessee has challenged the validity of the assessment on the ground of non application of mind before the Id. CIT(A) as under 2. The Assessing Officer has assumed jurisdiction u/s 147 without applying mind on the information passed on by the Dl investigation and reopening is based on mere subjective opinion as per information not backed by any material. 3. The reopening o f assessment u/s 147 is bad in law as the reason recorded u/s 148 are non specific vague and general and the same does not demonstrate as to how Assessing Officer formed a belief that income chargeable to tax has escaped assessment and therefore consequent assessment need be set aside. 5. While rejecting the assessee appeal, the Ld. CIT(A) dispose of the legal ground summarily as follows g. The appellant has raised a basic challenged on the raisen detre o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 120) and copy of summons dated 14.03.2016 acknowledge dated 16.03.2016 filed with the Assessing Officer (ABP 121 to 125). 7. The Id. AR brought to our notice, the copy of printed proforma of obtaining approval u/s. 151 of the Act along with reasons recorded, (APB,26-27), that in column 12 Addl. CIT has granted approval without application of mind by writing only Yes, I am satisfied Fit for issue of notice u/s 148 of the IT Act. The Id. AR relying on the decision of Hon ble Madhya Pradesh High Court in the case of CIT vs. M/s. S. Goyanka Lime and Chemicals Ltd. 231 Taxman 0073 (MP), where it was held that the Joint Commissioner recorded satisfaction in mechanical manner and without application of mind to accord sanction for issuing notice u/s. 148 of the Act and has only recorded so Yes, I am satisfied then, the reopening assessment has to be held as invalid. In support, the Ld. AR placed reliance on the following judgments of Jurisdictional High Court. 1) Pr. CIT vs. Meenakshi Overseas(P) Ltd 395 ITR 677 (Del) 2) Pr. CIT vs. G G Pharma India Ltd 384 ITR 147 (Del) 3) Pr. CIT vs. RMG Polyvinyl (I) (2017) Ltd 396 ITR 5 (Del) 8. The Id. AR drew our attention towar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material as per se and, thus, reassessment on said basis was not justified. Finally, the Id. AR submitted that the impugned initiation of reassessment proceedings, notice and all consequent proceedings and orders are not valid and bad in law therefore, the same may kindly be quashed. 12. Per contra, the Id. DR submitted that the copy of proforma for obtaining approval u/s. 151 of the Act and reasons recorded by the AO are the internal departmental communication between the PCIT and ACIT and the Addl. CIT being administrative head of the Range and senior to the ACIT has power to peruse the approval u/s. 151 of the Act and his sings thereon does not make the same as mechanical and without application of mind and the same cannot be termed or alleged as invalid or bad in law. The Id. DR submitted that in column 12 of approval, the AO has been granted valid approval by noting that Yes, I am satisfied , fit for issue of notice u/s 148 of IT Act., which is sufficient to comply with the provisions of s. 151 of the Act. 13. The Id. AR submitted that facts on record clearly show that the AO has acted on suspicion only and not on any credible input available to him through DDIT (invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot mentioned the factum of quantum income of ₹ 10 lacs of share application money and the name of the suspicious accommodation entry providers for A. Y. 2008-09 to establish/substantiate reason to believe and the escaped assessment within meaning of the provision of section 147 of the IT Act 1961. 17. The above information in the reasons recorded clearly shows that the Assessing Officer has simply relied on the information received from the investigation wing without verifying the same with reference to the facts of the case; that the Assessing Officer has not even mentioned the name of the entity from whom so called entry of share application money was accepted by the assessee, instrument number, bank account and date on which the entry was made which are essential information to support the application of mind by the Assessing Officer. The judgment of Hon ble Delhi High Court vicisiate by the Assessing Officer and Hon ble Supreme Court relied upon by the Ld. DR (supra). While rejecting the objection on the ground the information received contain minusure detail of the entry should operator and the above named particulars. In the absence of the said essential detail be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... para 10 of the reasons is based on the information received from the director of investigation wing and the AO without making any effort to examine and discuss the material received from the Investigation Wing with the support of tangible material gathered by way of conducting inquiry shall be held as without application of the mind since, he has used the same to form reason to believe that income had escaped assessment. This also shows that the AO proceeded to initiate reassessment proceedings on the basis of borrowed satisfaction without any application of mind and exercise on the information received from the Investigation Wing of the Department. Therefore, we have no hesitation to hold that the AO proceeded to initiate reassessment proceedings u/s. 147 of the Act and to issue notice u/s. 148 of the Act on the basis of borrowed satisfaction and without any application of mind and examination of the so called material and information received from the investigation wing to establish any nexus, even prima facie, with the such information. Therefore, in our considered opinion the initiation of reassessment proceedings u/s. 147 of the Act, notice u/s. 148 of the Act, reassessment pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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