SMT. CHARANJIT KAUR,KURUKSHETRA vs. ITO WARD-1, KURUKSHETRA

per the provisions of the CPC. The Ld. Counsel relied on the

judgment of the Hon’ble Delhi High Court in the case of CIT vs.

Chetan Gupta [2015] 62taxmann.com249(Delhi) and the decisions of

the various Benches of the Tribunal to substantiate his contention.

had deliberately evaded the notice issued by the AO, the assessee is

now estopped from taking this plea that no notice was served. The

Ld. DR further pointed out that this issue was not raised by the

assessee before the Ld. CIT(A). The Ld. DR accordingly submitted

ITA No. 193/Chd/2020- Smt. Charanjit Kaur, Kurukshetra

that there is no merit in this ground of appeal of the assessee.

perused the material on record including the case law relied upon by

the Ld. Counsel. The evidence on record prima facie shows that

notice u/s 148 of the Act was not served upon the assessee. The

Revenue is not in a position to rebut the contention of the assessee.

The Hon’ble Delhi High Court in the case of CIT vs. Chetan Gupta

(supra) has held that in order to initiate reassessment proceedings,

notice u/s 148 of the Act has to be served mandatorily served upon

assessee in accordance with section 282(1) of the Act read with

Order V, Rule 12 and Order III Rule 6 of the Civil Procedure Code.

Hence, in our considered view, the reassessment proceedings

initiated by the AO in this case is contrary to the judgment of the

Hon’ble High Court of Delhi and decisions of the various Benches of

the Tribunal, relied upon by the Ld. counsel for the assessee,

therefore liable to be quashed.

CIT(A) by raising another legal ground that the Ld. CIT(A) has eared

in confirming the action of AO in initiating reassessment

proceedings on the basis of approval granted by the Principal

ITA No. 193/Chd/2020- Smt. Charanjit Kaur, Kurukshetra

Commissioner of Income Tax (Pr. CIT) in a mechanical manner. The

Ld. Counsel submitted before us that in this case there was no

application of mind by the AO to come to the conclusion that the

income of the assessee has escaped, despite this the Ld. Pr. CIT

approved the proposal for issuing notice u/s 148 of the Act in a

mechanical manner The Ld. counsel further invited our attention to

page 1 and 2 of the paper book containing copy of reasons recorded

for reassessment and the permission accorded by the competent

authority to demonstrate lack of application by the authorities

concerned. The Ld. Counsel placing reliance on the judgment of the

Hon’ble Madhya Pradesh High Court in the case of CIT vs. S.

Goyanka Lime & Chemicals Ltd. [2015] 56 taxmann.com 390(MP)

wherein the Hon’ble Court has declared the reopening invalid on the

ground that the competent authority has accorded sanction for

issuing notice u/s 148 in a mechanical manner without application of

mind. The Ld. Counsel further relied on the decision of the Mumbai

Bench of the Tribunal in the case of Bir Bahadur Singh Sijwali vs.

ITA [2015] 53 taxmann.com 366(Delhi-Trib.) to justify his arguments

that the proceedings u/s 147 r.w.s.148 of the Act by AO without

application of mind is not sustainable in law.

ITA No. 193/Chd/2020- Smt. Charanjit Kaur, Kurukshetra

the Ld. CIT(A) submitted that there is no infirmity in the reasons

recorded by the AO and the sanction accorded by the competent

authority. The Ld. DR further submitted that the competent authority

has approved the proposal after going through the proposal of the AO

in the light of the facts of the case.

the material on record. The grievance of the assessee is that the AO

had sent proposal for issuing notice u/s 148 of the Act without

application of mind and without recording satisfaction that the

income of the assessee has escaped assessment and the Ld. Pr. CIT

accorded the sanction thereon without recording his satisfaction. We

notice that the AO has only recorded in the reasons that during the

previous year, assessee deposited cash amounting to Rs.14,32,000/-

in her bank account, which has escaped assessment. We further

notice that the Ld. Pr. CIT accorded permission by writing as “yes,

satisfied, it is a fit case for issue of notice u/s 148.”

Madhya Pradesh High Court has held in the case of CIT vs. S.

Goyanka Lime & Chemicals Ltd.(supra) that where Joint

ITA No. 193/Chd/2020- Smt. Charanjit Kaur, Kurukshetra

Commissioner recorded satisfaction in mechanical manner and

without application of mind to accord sanction for issuing notice u/s

148 of the Act, the reopening of the assessment was invalid. The

observations of the Hon’ble Court are as under:

“7. We have considered the rival contentions and we find that while according sanction, the Joint Commissioner, Income Tax only recorded so “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 analysed on the basis of the aforesaid principle, the mechanical way of recording satisfaction by the Joint Commissioner, which accords sanction for issuing notice under 148, is clearly unsustainable and we find that on such consideration both the appellate authorities have interfered into the matter. In doing so, no error has been committed warranting reconsideration.”

writing “yes, satisfied, it is a fit case for issue notice u/s 148” on the

format. In our considered view, the satisfaction recorded in the

present case is similar to the satisfaction recorded in the case

discussed above.

ITA No. 193/Chd/2020- Smt. Charanjit Kaur, Kurukshetra

reasons recorded by AO for reopening of the case prima facie

indicate that he has not applied his mind and proceeded on

assumption that the bank deposit constitutes unexplained income of

the assessee. As pointed out by the Ld. Counsel, the Delhi Bench of

the ITAT in the case of Bir Bahadur Singh Sijwali vs. ITA (supra)

has set aside the action of AO in reopening the case of the assessee

initiated on fallacious assumption that bank deposits constitute

undisclosed income of the assessee, overlooking the fact that source

of deposit need not necessarily be income of the assessee. We further

notice that in the present case, the Ld. Pr. CIT has accorded sanction

for issuing notice u/s 148 of the Act, without ensuring that the AO

has recorded the reasons after due application of mind.

the addition in question ignoring that the impugned order suffers

from the legal infirmities discussed in the forgoing paras. In the

light of the facts of the case and the cases relied upon by the Ld.

Counsel, we are of the opinion that the impugned order is not

sustainable in law as the ld. CIT(A) has passed the impugned order

ignoring the ratio laid down by the hon’ble High Court of Delhi and

ITA No. 193/Chd/2020- Smt. Charanjit Kaur, Kurukshetra

Madhya Pradesh and also the decision of the Delhi Bench of the

Tribunal discussed above. We accordingly allow the legal grounds

raised by the assessee and set aside the impugned order passed by

the. ld. CIT(A).

consider it necessary to adjudicate the other grounds of appeal raised

on merit.

In the result, the appeal filed by the assessee is allowed.

Order pronounced on 15.03.2021.

Sd/- Sd/- ( N.K. SAINI) (R.L.NEGI) उपा�य� /Vice President �याियक सद�य सद�य/ Judicial Member उपा�य� उपा�य� उपा�य� �याियक �याियक �याियक सद�य सद�य Dated : 15.03.2021 “आर.के.” आदेशक�!ितिलिपअ"ेिषत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. !#यथ�/ The Respondent 3. आयकरआयु%/ CIT 4. आयकरआयु% (अपील)/ The CIT(A) 5. िवभागीय!ितिनिध, आयकरअपीलीयआिधकरण, च)डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड�फाईल/ Guard File आदेशानुसार/ By order, सहायकपंजीकार/ Assistant Registrar