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Facts
The assessee filed a return of income showing nil income. The case was reopened under Section 147 by issuing a notice under Section 148 after obtaining approval from the PCIT. The assessee did not comply, and an addition of ₹57,00,000 was made.
Held
The Tribunal held that the approval for reopening the assessment by the PCIT was mechanical and lacked application of mind, as it merely stated 'Yes, I am satisfied' without providing reasons. Therefore, the reopening was invalid.
Key Issues
Whether the reopening of assessment under Section 147 was valid when the approval by the PCIT was mechanical and lacked application of mind, as required by Section 151 of the Act.
Sections Cited
147, 148, 151, 143(3), 150(1), 144
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Income Tax Appellate Tribunal, “A” BENCH, KOLKATA
O R D E R
Per Rajesh Kumar, AM:
This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 29.07.2025 for the AY 2012-13.
2. At the time of hearing, the Counsel of the assessee pressed ground no.4, which is in respect of reopening of assessment not being in accordance with law and therefore, the entire reassessment is liable to be quashed.
2.1. The facts in brief are that the assessee filed the return of income on 14.09.2012, showing total income at ₹nil. The case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on 27.03.2019, which was duly served upon the assessee. The assessee did not comply with the notice issued u/s 148 of the Act. Finally, the assessment was made by making an addition of ₹57,00,000/- on account of money received by the assessee during the year from M/S Kashi Vishwanath Tradecom Pvt Ltd. 2.3. After hearing the rival contentions and perusing the materials available on record, we find that in this case the case of the assessee has been reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on 27.03.2019. The copy of order sheet containing the reasons recorded for reopening of assessment is available at page no.1 of the Paper Book. The said notice has been issued after obtaining approval from PCIT, Kolkata-3, which is extracted below:-
Wherein it has been stated by Pr. CIT -3, Kolkata ‘yes I am satisfied’, which is in our opinion is a mechanical approval granted by the ld. PCIT without any application of mind. Therefore, any reopening of “10. Section 151(1) of the Act categorically provides that no notice shall be issued under Section 148 by the Assessing Officer, after expiry of period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Commissioner or Principal Commissioner or Commissioner is satisfied on the reasons recorded by the Assessing Officer that it is a fit case for the issue of such notice. In the present case, since reopening was beyond the period of four years, it was for the PCIT to record satisfaction for reopening the assessment. In the case of SBC Minerals Pvt. Ltd. vs. Assistant Commissioner of Income Tax Circle 22(2), Delhi, WP (C) 7885/2023, we had clearly held that prescribed authority referred to in Section 151 must be "satisfied" on the reasons recorded by the Assessing Officer that it is a fit case for the issuance of such notice and therefore the satisfaction of the prescribed authority is a sine qua non for a valid approval. We had also held that the competent authority must apply its mind independently on the basis of material placed before it before grant of the sanction.
While dealing with the scope and requirement under Section 151 of the Act for initiating proceedings under Section 147 read with 148 of the Act, this Court in the case of Yum! Restaurants Asia Pte. Ltd v. Deputy Director of Income Tax (2017) 397 ITR 665, held as under:-
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 18.12.2025.