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Income Tax Appellate Tribunal, DELHI ‘SMC’ BENCH,
Before: SHRI N.K. BILLAIYA
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:
This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals] - XV, Delhi dated 18.06.2014 pertaining to assessment year 2003-04.
The sum and substance of the grievance of the assessee is that the ld. CIT(A) erred in confirming the addition of Rs. 9.44 lakhs and Rs. 23,600/-.
Vide an application dated 31.08.2015, the assessee raised an additional ground challenging the validity of the assessment order framed u/s 147 r.w.s 143(3) of the Income- tax Act, 1961 [hereinafter referred to as 'the Act']. Since the additional ground goes to the root of the matter, i decided to proceed with the additional ground first.
The bone of contention is the approval obtained from the Additional CIT(A), Range – 12, New Delhi. It has been strongly contended that approval is a mechanical approval without any application of mind and, therefore, the entire reassessment proceedings are vitiated as bad in law.
I deem it proper to exhibit the approval of the Additional CIT, Range -12, New Delhi and the same reads as under:
Name & Address of the Assessee M/S HONEY PORTFOLIO PRIVATE LIMITED 322 DHAKA CHAMBER, 2068/39 , NAIWALA KAROL BAGH NEW DELHI -05. PAN Ward AAACH3404J Status Company Ward ITO, Ward-12(4), New Delhi 2003-04 Assessment Year in respect of which it is proposed to issue notice u/s 148 9,44,000/- The quantum of income which has escaped assessment. Section - 147 Whether the provisions of section 147 (a) or 147 (b) applicable or both the sections are applicable. Whether the assessment is proposed Yes to be made for the first time, if the reply is in the affirmative please state (a) Whether any voluntary return had already been filed and Yes (b) If so, the date of filing the said return. Return of income of Rs. 1290- was filed on 02/12/2003 vide receipt No. 1244000873 with, Ward - 12 (4), New Delhi. If the answer to item no. 8 is in the negative, please state. (a) The income originally assessed (b) Whether it is a case of under N.A. assessment, assessment at too low a rate, assessment which has been made the subject of excessive relief or allowing of excessive loss or depreciation. No Whether the provisions of Section 150 (1) are applicable. If the reply is in affirmative, the relevant facts may be stared against item no. 11 and it may also be brought out that the provisions of section 150 (2) would not stand in the way of initiating proceedings u/s 147 As per Anu:xure-A Reasons for the belief that income has escaped assessment. Dated: 22/03/2009 (YOGESH NAYYAR) Income Tax Officer, Ward -12(4), New Delhi.
Whether the Addl. Commissioner/ YES Board is satisfied on the reasons recorded by the ITO that it is a fit [Hand written] case for the issue of notice u/s 148. grounds of selection have been dealt with adequately while finalizing the assessment Dated: (INDERJIT SINGH) ADDL.COMMISSNER OF INCOME TAX, RANGE-12
In my considered view, the reopening of an assessment u/s 147 of the Act is a potent power not to be lightly exercised. I certainly cannot be invoked casually or mechanically. The heart of the provision is the formation of the belief by the Assessing Officer and the same has to be considered by due application of mind by the superior authority while granting approval.
From the above exhibited chart, it is clear that in Column No. 12, the Additional CIT, while granting approval for issue of notice u/s 148 of the Act has simply mentioned ‘Yes”. In my view, this exercise appears to have been ritualistic and formal, rather than meaningful, which was rationale for safeguard for approval by a higher ranking officer.
The Hon'ble High Court of Madhya Pradesh in the case of S. Goyanka Lime and Chemical 231 Taxman 73 has dealt with a similar issue in which the Joint Commissioner, while according sanction only stated that “I am satisfied”. The Hon'ble High Court, on this, took the view that this action for sanction was without application of mind and this was done in a mechanical manner and, therefore, the Hon'ble High Court quashed the assessment order.
The Hon'ble Supreme Court dismissed the SLP filed by the Revenue against the aforementioned judgment of the Hon'ble High Court of Madhya Pradesh in 237 Taxmann 0378.
Considering the facts of the case in the light of the judicial decisions referred to hereinabove, I am of the opinion that the assessment order so framed is bad in law and deserves to be quashed. I order accordingly.
Since I have quashed the assessment order, I do not find it necessary to dwell into the merits of the case.
In the result, the appeal filed by the assessee in is allowed.
The order is pronounced in the open court on 14.09.2018.