Loading judgment…
Facts
The assessee's appeal arises from an order of assessment passed u/s 153A(1)(b) & 147 of the Income-tax Act, 1961. The primary issue concerns the validity of the assumption of jurisdiction by the Assessing Officer under Section 147.
Held
The Tribunal held that the reopening of assessment under Section 147 was invalid because the approval granted by the Principal Commissioner of Income Tax under Section 151 of the Act was mechanical and lacked application of mind. Consequently, the reassessment proceedings were quashed.
Key Issues
Whether the assumption of jurisdiction by the Assessing Officer under Section 147 of the Income-tax Act, 1961, was valid, specifically concerning the approval obtained under Section 151.
Sections Cited
153A(1)(b), 147, 148, 151
AI-generated summary — verify with the full judgment below
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, DELHI BENCH “G”: NEW DELHI
Before: SHRI M. BALAGANESH & SHRI YOGESH KUMAR U.S.
O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in AY 2009-10, arises out of the order of the Commissioner of Income Tax (Appeals)-3, Gurgaon [hereinafter referred to as „ld. CIT(A)‟, in short] in Appeal No. 10331,11543,10326,10344 & 10354/2017-18 &2016-17(Α.Υ.2009-10) dated 27.01.2023 against the order of assessment passed u/s 153A(1)(b) & 147 of the Income-tax Act, 1961 (hereinafter referred to as „the Act‟) dated 23.12.2016 by the Assessing Officer, DCIT, Circle-1, Faridabad (hereinafter referred to as „ld. AO‟).
Though the assessee has raised several grounds challenging the validity of assumption of jurisdiction u/s 147 of the Act together with merits, we deem it fit to first address the assumption of jurisdiction u/s 147 of the Act.
We have heard the rival submissions and perused the material available on record. The ld AO reopened the assessment of the assessee u/s 147 of the Act vide issuance of notice u/s 148 of the Act. The reasons recorded for reopening the assessment together with the approval granted by the ld. Principal Commissioner of Income Tax (PCIT) in terms of section 151 of the Act are placed on record in Pages 10 to 11 of the Paper Book. On perusal of the proforma seeking approval u/s 151 of the Act, we find that the ld PCIT had merely stated that „Yes, I agree‟ that this is fit case for reopening. This sort of approval granted u/s 151 of the Act was held to be approval granted without application of mind and construed as mechanical by the Hon‟ble Madhya Pradesh High Court in the case of CIT Vs. S. Goyenka Lime and Chemicals Ltd reported in 56 taxmann.com 390 (MP HC). The Special Leave Petition (SLP) filed by the revenue against this decision was dismissed by the Hon'ble Supreme Court reported in 64 taxmann.com 313. Further, we find that the Hon‟ble Jurisdictional High court in the case of PCIT Vs. NC Cables Ltd reported in 391 ITR 11 (Del) had also held the same, wherein, the approving authority had merely stated “approved” in the proforma while granting approval in terms of section 151 of the Act. This approval was held by the Hon‟ble Jurisdictional High court to be a mechanical approval. The relevant observation of the Hon‟ble Jurisdictional High Court in this regard are reproduced herein:-
Section 151 of the Act clearly stipulates that the CIT (A), who is the competent authority to authorize the reassessment notice, has to apply his mind and form an opinion. The mere appending of the expression 'approved' says nothing. It is not as if the CIT (A) has to record elaborate reasons for agreeing with the noting put up. At the same time, satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner. In the present case, the 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 officer. For these reasons, the Court is satisfied that the findings by the ITAT cannot be disturbed.
The substantial questions of law framed are answered in favour of the assessee and against the Revenue. The appeal is dismissed.”
Respectfully following the aforesaid decisions, we hold that the reopening has been made in the instant case by not taking approval u/s 151 of the Act from the competent authority in the manner known to law. Accordingly, the entire reassessment proceedings are hereby quashed. Hence, one of the legal grounds challenging the validity of assumption of jurisdiction u/s 147 of the Act is allowed in the above mentioned terms. Since the reassessment is quashed, the other legal grounds raised by the assessee as well as the grounds raised by the assessee on merits need not be adjudicated and they are left open.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 09/05/2025.