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TMI Blog2025 (1) TMI 1292X X X X Extracts X X X X X X X X Extracts X X X X ..... r.w.s 144 r.w.s 144B of the Act pertaining to assessment year 2016-17. 2. As per the grounds of appeal, the assessee has challenged the legitimacy of jurisdiction assumed under s. 147 of the Act as well as additions made by the Assessing Officer ("AO") towards Long Term Capital gain ("LTCG") on sale of shares. 3. When the matter was called for hearing, the Ld. Counsel adverted to the assessment order and submitted at the outset that jurisdiction was assumed by the AO under s. 147 of the Act on the premise that the assessee has not filed any return of income for AY 2016-17 and in the absence of income tax return for the year under consideration, the nature of activities of the assessee cannot be ascertained. As alleged further the informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 93 of 2021 judgement dated 08.08.2023 for the proposition that re-opening of assessment based on incorrect facts are unsustainable in law. Similar view has been expressed by the Co-ordinate Bench of the Tribunal in the case of Kunwar Ayub Ali vs ITO in ITA No.3137/Del/2018 (Del.) order dated 17.04.2023 which has been rendered in the similar facts. In that case also, the reasons towards escapement of chargeable income were recorded on the belief that the assessee has not filed the return of income which was found to be grossly contrary to the facts on record. The notice issued under s. 148 of the Act was thus quashed being issued on the basis of inherently wrong facts. The Ld. Counsel thus canvassed that the jurisdiction usurped under s. 147 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 82 of 2012 judgment dated 14.01.2014 (M.P. High Court) (SLP by the Revenue dismissed in CIT vs. S. Goyanka Lime and Chemicals Lid.. (2023) 453 ITR 242 (SC); Manujendra Shah vs. CIT, WP(C) 12677/2018 judgment dated 18.07.2023 and plethora of Coordinate Bench judgments to contend that the Competent Authority while discharging statutory obligation under s. 151 of the Act is not expected to function mechanically and accord sanction on dotted lines. The satisfaction of the Competent Authority must be recorded with some degree of objectivity based on some objective material. The Ld. Counsel thus submitted that on this ground alone, the issuance of notice under s. 148 based on a cryptic sanction is vitiated and consequently, the assessment order f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mini Investments Company Limited during the year under consideration. 3. To bring the above information available with department to the knowledge of assessee, a letter was issued to the assessee requiring thereby furnishing response in this regard. It was specifically mentioned that if no response is received, appropriate proceedings under the Income Tax Act, 1961 may be initiated. The assessee has not given any details of receipts on account of sale of shares of script M/s Yamini Investments Company Limited. 4. In absence of any response, prima-facie it is clear that the assessee has obtained bogus accommodation entry through penny stock of M/s Yamini Investments Company Limited which has been unravelled by the investigation wing of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above income or any other income which comes to my notice subsequently in the course of assessment proceedings u/s 147, I proceed to initiate proceedings u/s 147 of the I.T. Act, 1961 in the case for A.Y. 2016-17." Approval Details Name UMESH CHANDRA BHARTI Designation Range-1, Faridabad Approval Status Approved Date of Approval 30.03.2021 Remarks of approving authority Considering the reasons recorded by the Assessing Officer as per Annexure, I am satisfied that it is a fit case for the issue of notice u/s 148 of the Income Tax Act, 1961. Approval is hereby accorded for issue of notice u/s 148 of the Income Tax Act, 1961. 6.2. As pointed out on behalf of the assessee, the belief towards escapement of chargeable income h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that where the reasons cited that the assessee did not file the return of income was found to be factually incorrect, the notice issued under s. 148 of the Act for re-opening of assessment requires to be quashed for assumption of jurisdiction on extraneous grounds. 8. In the light of the judgements rendered in the case of Arvind Sahdeo Gupta vs ITO-1 (supra) and Kunwar Ayub Ali vs ITO (supra) expounding the position of law, we find palpable merit in the plea of the assessee towards inherent lack of jurisdiction under s. 147 of the Act. 9. We not also advert to the other challenge to assumption of jurisdiction allegedly without meeting the pre-requisites of s.151 of the Act. 10. The assessee contends that the Addl.CIT/JCIT has express ..... X X X X Extracts X X X X X X X X Extracts X X X X
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