SHRI KAILASH BANSAL,HISAR vs. ITO WARD 2, HISAR

Ld. AR mainly relied on ground no.1.3 which is a legal ground that Ld. AR mainly relied on ground no.1.3 which is a legal ground that Ld. AR mainly relied on ground no.1.3 which is a legal ground that notice dated 26.3.2016 u/s 148 of the Act issued by the ITO, Ward notice dated 26.3.2016 u/s 148 of the Act issued by the ITO, Ward notice dated 26.3.2016 u/s 148 of the Act issued by the ITO, Ward-2, Hisar, placed at page 5 of Paper Book, page 5 of Paper Book,in absence of approval and in any in absence of approval and in any case a valid approval under section case a valid approval under section 151 of the Act, assumption of 151 of the Act, assumption of jurisdiction is invalid. He further submitted that copy of the approval jurisdiction is invalid. He further submitted that copy of the approval jurisdiction is invalid. He further submitted that copy of the approval dated 9.5.2024 u/s 151 of the Act is placed at u/s 151 of the Act is placed at page 181 of Paper Book, page 181 of Paper Book, for the sake of brevity, the same is for the sake of brevity, the same is reproduced below :-

It is submitted that it is evident from aforesaid approval that the said approval is for alleged escapement of income of Rs.81,34,341/- as against alleged escapement of Rs.1,03,89,341/- as stated in reasons recorded u/s 148(2) of the Act. He thus submitted that without making any query from Assessing Officer that what is the actual figure of income alleged to escape assessment has granted the mechanical approval, that too by marking the STAMP – ‘Yes’ I am Satisfied.Accordingly, he submitted that such approval is not a valid approval u/s 151 of the Act. He placed reliance on various judicial pronouncements and some of which are reproduced below :-

In view of the above, he pleaded that proceedings-initiated u/s 147 of the Act is bad in law and liable to be quashed as such and allow the appeal of the assessee 6. On the other hand, ld. DR of the Revenue relied upon the orders of the lower authorities. 7. Considered the rival submissions and material placed on record. We find that in the instant case approval for issue of notice u/s. 148 was granted in a mechanical manner by the PCIT, Hisar by only mentioning the word “Yes, I am satisfied” (rubber stamped) which is bad in law and resultantly the re-assessment proceedings initiated based on such approval is bad in law. Further, we also observed that the said approval is for alleged escapement of income of Rs.81,34,341/- as against alleged escapement of Rs.1,03,89,341/- as stated in reasons recorded u/s 148(2) of the Act. We find that ld. AR relied on various judicial pronouncements which fortifies his case. We observed Hon’ble Delhi High Court in the case of Capital Broadways (P) Ltd. (supra) and the decision of the coordinate Bench in the case of Sandhya Sharma v. ACIT(supra) (wherein Accountant Member is the Author), fortified our view that approval is bad in law wherein it is held as under :-  301 Taxman 506 (Del) dated 3.10.2024 Capital Broadways (P) Ltd. v. ITO

Coming to the issue of approval granted u/s 151 of the Act raised by the assessee, we observed that the assessee has brought to our notice the approval form wherein the JCIT has given approval by merely recording ‘yes’ in the allotted form and the same was also approved on the same day without discussing anything further. The ld AR submitted before us that the approval is mechanical by relying on the decision of Hon’ble Delhi High Court in the case of Vinod Kumar Solanki (supra). At the same time, ld DR heavily relied on the decisions of Meenakshi Overseas Pvt Ltd (supra), Experion Developers (P) Ltd (supra) and Pioneer Town Planners P Ltd (supra), wherein the issue of reasons recorded by mentioning the words, ‘Yes, I am Satisfied’. In which the Hon’ble Delhi High Court has decided the issue in favour of the revenue. 8. After considering the submissions of both sides, we observe that the decision relied by the assessee in the case of Vinod Kumar Solanki (supra) is pronounced on 14.08.2024 in which the similar issue of approval was considered and decided in favour of the assessee by considering the earlier decision which are also relied by the ld DR. It is also fact that the decisions relied by the ld DR were decided prior and also considered the similar views by the Hon’ble High Court on the issue raised by the assessee before us. Therefore, we are bound to follow the recent decision of the Hon’ble Court and accordingly, we are inclined to decide the issue of mechanical approval that too merely recording as ‘yes’. For the sake of brevity, the decision of the High Court is reproduced below: ……. 9. Even in this case, the approval was granted from the assessment of another person and merely recorded the reason as ‘yes’, proceeded to approve the same mechanically. Hence we are inclined to allow the ground raised by the assessee and held to be initiation of proceeding itself is bad in law and accordingly, the assessment made in the case of the assessee is set aside. In the result, appeal filed by the assessee is allowed.” 8. In view of the aforesaid precedents, we hold that the approval granted by the PCIT, Hisar for issuance of notice u/s. 148 of the Act is not valid.