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Facts
The assessee filed its return for AY 2010-11 declaring Nil income. The Assessing Officer (AO) initiated reassessment proceedings by issuing a notice under Section 148 after obtaining approval from the prescribed authority. The assessee challenged the validity of the reopening, claiming the approval was mechanical.
Held
The Tribunal held that the additional ground regarding the validity of reopening based on the prescribed authority's approval has merit. It found that the approval was granted in a mechanical manner, lacking due application of mind, and thus quashed the reassessment proceedings.
Key Issues
Whether the reopening of assessment was valid when the approval from the prescribed authority under Section 151 of the Income Tax Act was obtained in a mechanical manner without due application of mind.
Sections Cited
148, 143(3), 151
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Income Tax Appellate Tribunal, DELHI BENCH ‘B’, NEW DELHI
Before: Sh. Satbeer Singh Godara & Sh. M. Balaganesh
Asstt. Year : 2010-11 Candor Infratech Pvt. Ltd., Vs ACIT, SF-2, Bhikaji Kama Bhawan, Bhikaji Circle-5(2), Kama Place, New Delhi-110066 New Delhi-110002 (APPELLANT) (RESPONDENT) PAN No. AADCC4093R Assessee by : Sh. G. V. N. Hari, Adv. Revenue by : Sh. Surender Pal, CIT-DR Date of Hearing: 07.04.2025 Date of Pronouncement: 16.05.2025 ORDER
Per Satbeer Singh Godara, Judicial Member:
This assessee’s appeal for Assessment Year 2010-11, arises against the CIT(A)-12, New Delhi’s in case No. 46/17-18 dated 15.12.2017, in proceedings u/s 148/143(3) of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
Learned counsel representing assessee at the outset invites our attention towards it’s petition dated 04.04.2025 seeking to raise an additional ground challenging validity of the reopening herein for want of a valid approval of the prescribed authority u/s 151 of the Act.
Learned CIT-DR on the other hand vehemently submits in light of A. Govindarajulu Mudaliar Vs. CIT (1958) 34 ITR 807 (SC), CIT Vs. M. Ganapathi Mudaliar (1964) 53 ITR 623 (SC), ITO Vs. Lakhmani Mewal Das (1976) 103 ITR 437 (SC), ITO Vs. Biju Patnaik (1991) 188 ITR 247 (SC), ITO Vs. Purushottam Das Bangur (1997) 224 ITR 362 (SC) and Sonia Gandhi Vs. ACIT (2018) 407 ITR 594 (Del.) that neither the prescribed authorities’ above section 151 approval could be held as bad in the eyes of law nor the assessee is entitled to raise it’s foregoing additional ground at this belated stage once the Assessing Officer had recorded his reopening reasons strictly as per law.
We have given our thoughtful consideration to the assessee’s and Revenue’s respective vehement contentions against and in support of the former additional grounds sought to be raised in the instant appeal.
We are of the considered view that the assessee’s above additional ground indeed carries merit as not only it raises a jurisdictional issue going to the root of the matter but also it has filed the learned prescribed authorities’ approval dated 15.03.2016 (page 12 in paper book) so as to satisfy the rigor of NTPC Ltd. Vs. CIT (1998) 229 ITR 383 (SC) and All Cargo Global Logistics Ltd. Vs. DCIT (2012) 21 taxmann.com 429 Candor Infratech Pvt. Ltd. (Mum.) settling the law long back that the tribunal could indeed entertain such a legal issue for the first time in second appellate proceedings so as to determine the correct tax liability of an assessee subject to the condition that all the relevant facts form part of the records.
Next comes the basic relevant facts qua the instant legal issue of validity of the impugned reopening. The assessee company had filed it’s return 08.10.2010 declaring Nil income. The Assessing Officer thereafter formed his reasons to believe that it’s taxable income is liable to be assessed had escaped assessment. He thus issued his section 148 notice dated 17.03.2016 after obtaining the prescribed authorities approval section 151 of the Act. We reiterate that this approval forms part of the case records before us wherein the learned prescribed authority appears to have acted in a mechanical fashion by observing “yes” only which could no more be held as due application of mind going by CIT vs. S. Goyanka Lime and Chemical Ltd. (2023) 453 ITR 242 (SC). We thus quash the impugned reopening in very terms. The Revenue’s case law (supra) is not found to be relevant to the legal issue herein. Ordered accordingly.
All other pleadings on merits herein stand rendered academic.