TMI Blog2019 (4) TMI 1744X X X X Extracts X X X X X X X X Extracts X X X X ..... f the commissioner has to record elaborate reasons for agreeing with the noting put up before him. At the same time, satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner. When such exercise appears to have been ritualistic and formal rather than meaningful which is the rationale for the safeguard of an approval by a higher ranking official, the finding of the Tribunal quashing the reassessment proceedings cannot be disturbed. - Hon'ble Supreme Court in the case of Chhugamal Rajpal vs. S.P. Chaliha Ors [ 1971 (1) TMI 9 - SUPREME COURT] has held that where the commissioner had mechanically recorded permission and the important safeguards provided in the section 147 and 151 were lig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee has received share capital of ₹ 35 lakhs from M/s Shalini Holdings Ltd. and M/s Virgin Capital Services Pvt. Ltd. Since the assessee could not explain satisfactorily the identity, credit worthiness and genuineness of the transaction of the two companies in terms of the provisions of section 68, the Assessing Officer, relying on various decisions made addition of ₹ 35 lacs to the total income of the assessee under the provisions of section 68. The Assessing Officer further made addition of ₹ 60,000/- being the commission expenses incurred for arranging the accommodation entry being 1.8% of the total bogus share application money. Thus, the Assessing Officer completed the assessment at a total income of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law as well as on merits. 4. That under thefacts andcircumstances, addition of ₹ 10 lacs under section 68 for the share capital / share premium received from Virgin Capital Services (P) Ltd. by holding the same as received from alleged entry operator is illegal and unsustainable in law as well as on merits. 5. Thatthe whole addition of ₹ 35 lacs under section 68 beingmade without confronting with all the adverse material used and also without allowing the cross examination in the cases where statements have been taken on the back of the assessee which have been used adversely, cannot be sustained in law as well as on merits. 6. Thatunder the facts and circumstances, addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not valid. In this case also the approval u/s 151 was given as approved. Referring to the decision of the Hon'ble Bombay High Court in the case of German Remedies Ltd. vs. DCIT (2006) 287 ITR 494 (Bom), he submitted that while granting approval, the CIT was required to verify whether there was any failure on the part of the assessee to disclose full and true relevant facts in the return and to consider whether or not power to reopen is being invoked within a period of four years from the end of the relevant assessment year. When none of these aspects was considered by him, the approval granted suffers from non-application of mind and is liable to be quashed. Referring to the decision of the Hon'ble Supreme Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the CIT(A) on this issue. The ld. counsel for the assessee, in his rejoinder, submitted that although it was argued before the CIT(A) on the issue of approval u/s 151 of the IT Act, however, the ld.CIT(A) has conveniently ignored the same while deciding the issue of validity of reassessment proceedings. 8. I have considered the rival arguments made by both the sides and perused the material available on record. It is an admitted fact that the case of the assessee was reopened by the Assessing Officer after recording reasons and issue of notice u/s 148 as per the provisions of section 147 and 148 of the Act on the basis of the information received from the Investigation Wing that the assessee is a beneficia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... val to the Assessing Officer to reopen an assessment 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. That power cannot be exercised casually and in a routine manner. Accordingly, the Hon'ble High Court quashed the notice, since there was no proper application of mind by the Addl.CIT. 11. I find the Hon'ble Delhi High Court in the case of Pr. CIT vs. N.C. Cables Ltd ., while deciding an identical issue has held that section 151 of the Act clearly stipulates that the CIT, who is the competent authority to authorize the reassessment notice has to apply his mind and form an opinion. Mere a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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