ACIT, CIRCLE - 25, KOLKATA , KOLKATA vs. M/S. MALA ROY & OTHERS, KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘C’ BENCH, KOLKATA (Before Sri J. Sudhakar Reddy, Accountant Member & Sri Aby T. Varkey, Judicial Member) ITA No. 406/Kol/2018 Assessment Year: 2008-09 & ITA No. 407/Kol/2018 Assessment Year: 2012-13

Asstt. Commissioner of Income Tax, Circle-25, Kolkata……………………….………....…........Appellant Vs. M/s. Mala Roy & Others……………………………………………………....................……………….…..Respondent 192D, Netaji Subhas Chandra Bose Road Tollygunge Kolkata – 700 040 [PAN : AAJFM 7391 P] C.O. No. 40/Kol/2019 Assessment Year: 2008-09

M/s. Mala Roy & Others……………………………………………………....................……………….……. Appellant 192D, Netaji Subhas Chandra Bose Road Tollygunge Kolkata – 700 040 [PAN : AAJFM 7391 P] Vs. Deputy Commissioner of Income Tax, Central Circle-1(1), Kolkata…….………....…....Respondent Appearances by: Shri Supriyo Pal, JCIT Sr. D/R, appearing on behalf of the Revenue Shri S.M. Surana, Advocate, appeared on behalf of the assessee. . Date of concluding the hearing : November 13th, 2019 Date of pronouncing the order : December 31st, 2019 ORDER Per J. Sudhakar Reddy, AM :-

Both these appeals are filed by the revenue for the Assessment Years 2008-09 & 2013-13, respectively. The cross-objection is filed by the assessee for the Assessment Year 2008-09. 2. We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows:-

2 ITA No. 406/Kol/2018 Assessment Year: 2008-09 & ITA No. 407/Kol/2018 Assessment Year: 2012-13 C.O. No. 407/Kol/2018 Assessment Year: 2008-09 M/s. Mala Roy & Others 4. The assessee in this case has filed its return of income u/s 139(1) of the Act on The assessee in this case has filed its return of income u/s 139(1) of the Act on The assessee in this case has filed its return of income u/s 139(1) of the Act on 28/09/2008 declaring total income of Rs.17,11,08,910/ 28/09/2008 declaring total income of Rs.17,11,08,910/-. The assessmen . The assessment u/s 143(3) of the Act, was completed on 29/12/2010. The total income of the assessee was assessed the Act, was completed on 29/12/2010. The total income of the assessee was assessed the Act, was completed on 29/12/2010. The total income of the assessee was assessed at Rs.17,11,70,330/-. Thereafter notice for reopening was issued u/s 148 of the Act on . Thereafter notice for reopening was issued u/s 148 of the Act on . Thereafter notice for reopening was issued u/s 148 of the Act on 28/11/2014 and this was duly served on the assessee on 02/12/2014. Th 28/11/2014 and this was duly served on the assessee on 02/12/2014. Th 28/11/2014 and this was duly served on the assessee on 02/12/2014. The reasons for reopening are as follows:- “Information in the form of Hon’eble Justice M.B. Shah Commission Report was Information in the form of Hon’eble Justice M.B. Shah Commission Report was Information in the form of Hon’eble Justice M.B. Shah Commission Report was received wherein it was stated that during the relevant period there was excess received wherein it was stated that during the relevant period there was excess received wherein it was stated that during the relevant period there was excess production of Iron Ore which was not disclosed by the asse production of Iron Ore which was not disclosed by the assessee Firm at the time of ssee Firm at the time of assessment.” 4.1. The ld. CITT(A), at para 7.1.2. of his order at page 6, held as follows: The ld. CITT(A), at para 7.1.2. of his order at page 6, held as follows: The ld. CITT(A), at para 7.1.2. of his order at page 6, held as follows:- “7.1.2. I prefer not to adjudicate on this issue, but only to make some remarks I prefer not to adjudicate on this issue, but only to make some remarks I prefer not to adjudicate on this issue, but only to make some remarks – as, following my order for the AY 2012-13, I will be gran 13, I will be granting relief on the quantum issue; and further that as the ting relief on the quantum issue; and further that as the AO was to send his report on remedial action taken, and, the Ld. CIT had granted sanction for AO was to send his report on remedial action taken, and, the Ld. CIT had granted sanction for AO was to send his report on remedial action taken, and, the Ld. CIT had granted sanction for issue of the notice u/s 148, thus it is not appropriate for me to adjudicate on the issue. But, there issue of the notice u/s 148, thus it is not appropriate for me to adjudicate on the issue. But, there issue of the notice u/s 148, thus it is not appropriate for me to adjudicate on the issue. But, there are definitely deficiencies in that: e definitely deficiencies in that: a) The ‘reason to believe’ of the AO The ‘reason to believe’ of the AO – mere citing of the Justice M B Shah enquiry mere citing of the Justice M B Shah enquiry report – is not reason to believe of the AO. The AO has to give his own reason; is not reason to believe of the AO. The AO has to give his own reason; and referencing to the assessment records and referencing to the assessment records – that income chargeable to tax had that income chargeable to tax had escaped assessment. The enquiry report escaped assessment. The enquiry report – is just as any other enquiry report is just as any other enquiry report only. Its correctnes only. Its correctness has to be looked into; and considering that there are s has to be looked into; and considering that there are numerous number of cases mentioned therein. numerous number of cases mentioned therein. b) Not providing the reasons to the assessee. Not providing the reasons to the assessee. 4.2. The contention of the assessee is that, the reopening is beyond a period of four The contention of the assessee is that, the reopening is beyond a period of four The contention of the assessee is that, the reopening is beyond a period of four years from the end of the years from the end of the Assessment Year and the original assessment has been Assessment Year and the original assessment has been completed u/s 143(3) of the Act, and there is no allegation in the reasons record for completed u/s 143(3) of the Act, and there is no allegation in the reasons record for completed u/s 143(3) of the Act, and there is no allegation in the reasons record for reopening stating that there is failure on the part of the assessee to disclose fully and reopening stating that there is failure on the part of the assessee to disclose fully and reopening stating that there is failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment and hence the reassessment is bad in cessary for assessment and hence the reassessment is bad in cessary for assessment and hence the reassessment is bad in law. 4.2.1. Further submission were made that the satisfaction is borrowed satisfaction Further submission were made that the satisfaction is borrowed satisfaction Further submission were made that the satisfaction is borrowed satisfaction and there is non application of mind by the Assessing Officer to the material received. and there is non application of mind by the Assessing Officer to the material received. and there is non application of mind by the Assessing Officer to the material received. It was also argued that in the reasons recorded, the quantum of income which has hat in the reasons recorded, the quantum of income which has hat in the reasons recorded, the quantum of income which has escaped assessment has also escaped assessment has also not been mentioned. Several case-law were relied upon. law were relied upon. Other arguments were raised that the reasons recorded for approval from the ld. Other arguments were raised that the reasons recorded for approval from the ld. Other arguments were raised that the reasons recorded for approval from the ld. CIT(A) Range-8 in the proforma 8 in the proforma is not proper recording of satisfaction s not proper recording of satisfaction. In these

3 ITA No. 406/Kol/2018 Assessment Year: 2008-09 & ITA No. 407/Kol/2018 Assessment Year: 2012-13 C.O. No. 407/Kol/2018 Assessment Year: 2008-09 M/s. Mala Roy & Others reasons also there is no allegation that the assessee has failed to disclose reasons also there is no allegation that the assessee has failed to disclose reasons also there is no allegation that the assessee has failed to disclose truly and fully all material facts necessary for assessment. It was further argued that the fully all material facts necessary for assessment. It was further argued that the fully all material facts necessary for assessment. It was further argued that the reasons were not supplied to the asses reasons were not supplied to the assessee despite specific request for the same. see despite specific request for the same. 5. The ld. D/R submits that the material came into the possession of the The ld. D/R submits that the material came into the possession of the The ld. D/R submits that the material came into the possession of the Assessing Officer that suggested escapement of income and valid reasons were Assessing Officer that suggested escapement of income and valid reasons were Assessing Officer that suggested escapement of income and valid reasons were recorded and thereafter assessments were reopened after obtain recorded and thereafter assessments were reopened after obtain recorded and thereafter assessments were reopened after obtaining statutory approvals. He also relied on certain case law which we would be referring to as and approvals. He also relied on certain case law which we would be referring to as and approvals. He also relied on certain case law which we would be referring to as and when necessary. 6. A perusal of the reasons recorded clearly demonstrates that there is no A perusal of the reasons recorded clearly demonstrates that there is no A perusal of the reasons recorded clearly demonstrates that there is no whisper that there was violation on the part of the assessee to dis whisper that there was violation on the part of the assessee to disclose fully and truly close fully and truly all material facts necessary for assessment. Also, facts necessary for assessment. Also, the reopening is beyond a period of the reopening is beyond a period of four years from the end of the Assessment Year and as the original assessment was four years from the end of the Assessment Year and as the original assessment was four years from the end of the Assessment Year and as the original assessment was completed u/s 143(3) of the Act, completed u/s 143(3) of the Act, and hence the proviso to Section 147 of the Act, comes into play. 7. This Bench of the of the Tribunal under identical circumstances in the case of This Bench of the of the Tribunal under identical circumstances in the case of This Bench of the of the Tribunal under identical circumstances in the case of M/S. Cygnus Cygnus Cygnus Investment Investment Investment & & & Finance Finance Finance Vs Vs Vs ACIT; ACIT; ACIT; I.T.A. I.T.A. I.T.A. No. No. No. 117/Kol/2018, 117/Kol/2018, 117/Kol/2018, Assessment Year: 2008-09, had hel had held as follows:- “We find that the 'A' Bench of this Tribunal in the case of M/s. Beekay Steel Industries Ltd. vs. We find that the 'A' Bench of this Tribunal in the case of M/s. Beekay Steel Industries Ltd. vs. We find that the 'A' Bench of this Tribunal in the case of M/s. Beekay Steel Industries Ltd. vs. DCIT CC-XXX, Kolkata, in I.T.A. No. 105/Kol/2015, order dt. 31/05/2017, held as follows: XXX, Kolkata, in I.T.A. No. 105/Kol/2015, order dt. 31/05/2017, held as follows: XXX, Kolkata, in I.T.A. No. 105/Kol/2015, order dt. 31/05/2017, held as follows: 4.4. The Hon'ble Bombay High Court in the case of 4.4. The Hon'ble Bombay High Court in the case of Tao Publishing (P) Ltd. v. Dy.CIT Tao Publishing (P) Ltd. v. Dy.CIT reported in (2015) 370 ITR 135 (Bom.), has held as follows: reported in (2015) 370 ITR 135 (Bom.), has held as follows:- "10. As stated above, the reasons supplied to the Petitioner do not disclose that "10. As stated above, the reasons supplied to the Petitioner do not disclose that "10. As stated above, the reasons supplied to the Petitioner do not disclose that there was any failure on the there was any failure on the part of the Petitioner to provide all the material part of the Petitioner to provide all the material facts. That being the position, this ground could not have been taken up against facts. That being the position, this ground could not have been taken up against facts. That being the position, this ground could not have been taken up against the Petitioner at the time of disposing of the objections. Once this was not the the Petitioner at the time of disposing of the objections. Once this was not the the Petitioner at the time of disposing of the objections. Once this was not the basis for issuance of notice for Reassessme basis for issuance of notice for Reassessment, it cannot be held against the nt, it cannot be held against the Petitioner that the Petitioner had failed to make a true and full disclosure. It Petitioner that the Petitioner had failed to make a true and full disclosure. It Petitioner that the Petitioner had failed to make a true and full disclosure. It will have to be held that the Petitioner did not fail to make full and true will have to be held that the Petitioner did not fail to make full and true will have to be held that the Petitioner did not fail to make full and true disclosure of all material facts. The jurisdictional requirement disclosure of all material facts. The jurisdictional requirement disclosure of all material facts. The jurisdictional requirement for carrying out the reassessment, after the expiry of period of four years, is not fulfilled in the the reassessment, after the expiry of period of four years, is not fulfilled in the the reassessment, after the expiry of period of four years, is not fulfilled in the present case." present case." 4.5. The Hon'ble Bombay High Court in the case of Sound Casting (P) Ltd. v. Dy. CIT 4.5. The Hon'ble Bombay High Court in the case of Sound Casting (P) Ltd. v. Dy. CIT 4.5. The Hon'ble Bombay High Court in the case of Sound Casting (P) Ltd. v. Dy. CIT reported in 250 CTR 119 (Bom.) (HC), has held that ther reported in 250 CTR 119 (Bom.) (HC), has held that there is no allegation in the reasons e is no allegation in the reasons which have been disclosed to the assessee that there was any failure on his part to fully which have been disclosed to the assessee that there was any failure on his part to fully which have been disclosed to the assessee that there was any failure on his part to fully

ITA No. 406/Kol/2018 Assessment Year: 2008-09 & ITA No. 407/Kol/2018 Assessment Year: 2012-13 C.O. No. 407/Kol/2018 Assessment Year: 2008-09 M/s. Mala Roy & Others and truly disclose material facts necessary for assessment and therefore reopening and truly disclose material facts necessary for assessment and therefore reopening and truly disclose material facts necessary for assessment and therefore reopening beyond four years was not valid. (A.Y. 2005 beyond four years was not valid. (A.Y. 2005-06). 4.6. The Hon'ble Delhi High Court in the case of 4.6. The Hon'ble Delhi High Court in the case of CIT vs. Orient Craft Ltd. reported in [2013] 354 . reported in [2013] 354 ITR 356 (Del.)(HC) has held as follows: ITR 356 (Del.)(HC) has held as follows: "The reasons recorded by the Assessing Officer in the present ca "The reasons recorded by the Assessing Officer in the present ca "The reasons recorded by the Assessing Officer in the present case do confirm our apprehension about the harm that a less strict interpretation of the words "reason to apprehension about the harm that a less strict interpretation of the words "reason to apprehension about the harm that a less strict interpretation of the words "reason to believe" vis-à-vis an intimation issued under vis an intimation issued under section 143(1) can cause to the tax regime. can cause to the tax regime. There is no whisper in the reasons recorded, of any tangible material which came to the whisper in the reasons recorded, of any tangible material which came to the whisper in the reasons recorded, of any tangible material which came to the possession of the assessing officer subsequent to the issue of the intimation. It reflects an possession of the assessing officer subsequent to the issue of the intimation. It reflects an possession of the assessing officer subsequent to the issue of the intimation. It reflects an arbitrary exercise of the power conferred under arbitrary exercise of the power conferred under section 147." 4.7. The Hon'ble Delhi High Court in the case of Haryana Acrylic Manufacturing Co. v. 4.7. The Hon'ble Delhi High Court in the case of Haryana Acrylic Manufacturing Co. v. 4.7. The Hon'ble Delhi High Court in the case of Haryana Acrylic Manufacturing Co. v. Commissioner of Income-Tax and Anor. reported in [2009] 308 ITR 38 (Delhi) has held as follows: Tax and Anor. reported in [2009] 308 ITR 38 (Delhi) has held as follows: Tax and Anor. reported in [2009] 308 ITR 38 (Delhi) has held as follows: "26Viewed in this light, the proviso to sect "26Viewed in this light, the proviso to section 147 of the said Act, carves out an exception ion 147 of the said Act, carves out an exception from the main provisions of section 147. If a case were to fall within the proviso, whether from the main provisions of section 147. If a case were to fall within the proviso, whether from the main provisions of section 147. If a case were to fall within the proviso, whether or not it was covered under the main provisions of section 147 of the said Act would not or not it was covered under the main provisions of section 147 of the said Act would not or not it was covered under the main provisions of section 147 of the said Act would not be material. Once the exce be material. Once the exception carved out by the proviso came into play, the case would ption carved out by the proviso came into play, the case would fall outside the ambit of section 147. fall outside the ambit of section 147. 27 Examining the proviso [set out above], we find that no action can be taken under 27 Examining the proviso [set out above], we find that no action can be taken under 27 Examining the proviso [set out above], we find that no action can be taken under section 147 after the expiry of four years from the end of the releva section 147 after the expiry of four years from the end of the relevant assessment year if nt assessment year if the following conditions are satisfied: the following conditions are satisfied: (a) an assessment under sub (a) an assessment under sub-section (3) of section 143 or this section has been made section (3) of section 143 or this section has been made for the relevant assessment year; and (b) unless any income chargeable to tax has for the relevant assessment year; and (b) unless any income chargeable to tax has for the relevant assessment year; and (b) unless any income chargeable to tax has escaped assessment for escaped assessment for such assessment year by reason of the failure on the part of the h assessment year by reason of the failure on the part of the assessee: (i) to make a return under section 139 or in response to a notice issued under assessee: (i) to make a return under section 139 or in response to a notice issued under assessee: (i) to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148; or (ii) to disclose fully and truly all section (1) of section 142 or section 148; or (ii) to disclose fully and truly all section (1) of section 142 or section 148; or (ii) to disclose fully and truly all material facts nec material facts necessary for his assessment for that assessment year. Condition (a) is admittedly satisfied inasmuch as the original assessment was Condition (a) is admittedly satisfied inasmuch as the original assessment was Condition (a) is admittedly satisfied inasmuch as the original assessment was completed under section 143(3) of the said Act. Condition (b) deals with a special kind completed under section 143(3) of the said Act. Condition (b) deals with a special kind completed under section 143(3) of the said Act. Condition (b) deals with a special kind of escapement of income chargeable to of escapement of income chargeable to tax. The escapement must arise out of the tax. The escapement must arise out of the failure on the part of the assessee to make a return under section 139 or in response to failure on the part of the assessee to make a return under section 139 or in response to failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub a notice issued under sub-section (1) of section 142 or section 148. This is clearly not section (1) of section 142 or section 148. This is clearly not the case here because the petitione the case here because the petitioner did file the return. Since there was no failure to r did file the return. Since there was no failure to make the return, the escapement of income cannot be attributed to such failure. This make the return, the escapement of income cannot be attributed to such failure. This make the return, the escapement of income cannot be attributed to such failure. This leaves us with the escapement of income chargeable to tax which arises out of the leaves us with the escapement of income chargeable to tax which arises out of the leaves us with the escapement of income chargeable to tax which arises out of the failure on the part of the assessee failure on the part of the assessee to disclose fully and truly all material facts necessary to disclose fully and truly all material facts necessary for his assessment for that assessment year. If it is also found that the petitioner had for his assessment for that assessment year. If it is also found that the petitioner had for his assessment for that assessment year. If it is also found that the petitioner had disclosed fully and truly all material facts necessary for its assessment, then no action disclosed fully and truly all material facts necessary for its assessment, then no action disclosed fully and truly all material facts necessary for its assessment, then no action under section 147 co under section 147 could have been taken after the four year period indicated above. So, uld have been taken after the four year period indicated above. So, the key question is whether or not the petitioner had made a full and true disclosure of the key question is whether or not the petitioner had made a full and true disclosure of the key question is whether or not the petitioner had made a full and true disclosure of all material facts ? all material facts ? 29 In the reasons supplied to the petitioner, there is no whisper, what to sp 29 In the reasons supplied to the petitioner, there is no whisper, what to sp 29 In the reasons supplied to the petitioner, there is no whisper, what to speak of any allegation, that the petitioner had failed to disclose fully and truly all material facts allegation, that the petitioner had failed to disclose fully and truly all material facts allegation, that the petitioner had failed to disclose fully and truly all material facts

ITA No. 406/Kol/2018 Assessment Year: 2008-09 & ITA No. 407/Kol/2018 Assessment Year: 2012-13 C.O. No. 407/Kol/2018 Assessment Year: 2008-09 M/s. Mala Roy & Others necessary for assessment and that because of this failure there has been an necessary for assessment and that because of this failure there has been an necessary for assessment and that because of this failure there has been an escapement of income chargeable to tax. Merely having a reason to believe that escapement of income chargeable to tax. Merely having a reason to believe that escapement of income chargeable to tax. Merely having a reason to believe that income had escaped assessment, is not sufficient to reopen assessments beyond the income had escaped assessment, is not sufficient to reopen assessments beyond the income had escaped assessment, is not sufficient to reopen assessments beyond the four year period indicated above. The escapement of income from assessment must four year period indicated above. The escapement of income from assessment must four year period indicated above. The escapement of income from assessment must also be occasioned by the failure on the part of the assessee to disclose material facts, also be occasioned by the failure on the part of the assessee to disclose material facts, also be occasioned by the failure on the part of the assessee to disclose material facts, fully and truly. This is a necessary condition for overcoming the bar set up by the y and truly. This is a necessary condition for overcoming the bar set up by the y and truly. This is a necessary condition for overcoming the bar set up by the proviso to section 147. If this condition is not satisfied, the bar would operate and no proviso to section 147. If this condition is not satisfied, the bar would operate and no proviso to section 147. If this condition is not satisfied, the bar would operate and no action under section 147 could be taken. We have already mentioned above that the action under section 147 could be taken. We have already mentioned above that the action under section 147 could be taken. We have already mentioned above that the reasons supplied to the petitioner does not contain any such allegation. Consequently, ns supplied to the petitioner does not contain any such allegation. Consequently, ns supplied to the petitioner does not contain any such allegation. Consequently, one of the conditions precedent for removing the bar against taking action after the one of the conditions precedent for removing the bar against taking action after the one of the conditions precedent for removing the bar against taking action after the said four year period remains unfulfilled. In our recent decision in WelIntertrade said four year period remains unfulfilled. In our recent decision in WelIntertrade said four year period remains unfulfilled. In our recent decision in WelIntertrade Private Ltd (supra) we had agreed with the view taken by the Punjab and Haryana e Ltd (supra) we had agreed with the view taken by the Punjab and Haryana e Ltd (supra) we had agreed with the view taken by the Punjab and Haryana High Court in the case of Duli Chand Singhania (supra) that, in the absence of an High Court in the case of Duli Chand Singhania (supra) that, in the absence of an High Court in the case of Duli Chand Singhania (supra) that, in the absence of an allegation in the reasons recorded that the escapement of income had occurred by allegation in the reasons recorded that the escapement of income had occurred by allegation in the reasons recorded that the escapement of income had occurred by reason of failure o reason of failure on the part of assessee to disclose fully and truly all material facts n the part of assessee to disclose fully and truly all material facts necessary for his assessment, any action taken by the Assessing officer under section necessary for his assessment, any action taken by the Assessing officer under section necessary for his assessment, any action taken by the Assessing officer under section 147 beyond the four year period would be wholly without jurisdiction. Reiterating our 147 beyond the four year period would be wholly without jurisdiction. Reiterating our 147 beyond the four year period would be wholly without jurisdiction. Reiterating our view- point, we hold that the notice dated 29.03.2004 under section 148 based on the e hold that the notice dated 29.03.2004 under section 148 based on the e hold that the notice dated 29.03.2004 under section 148 based on the recorded reasons as supplied to the petitioner as well as the consequent order dated recorded reasons as supplied to the petitioner as well as the consequent order dated recorded reasons as supplied to the petitioner as well as the consequent order dated 02.03.2005 are without jurisdiction as no action under section 147 could be taken 02.03.2005 are without jurisdiction as no action under section 147 could be taken 02.03.2005 are without jurisdiction as no action under section 147 could be taken beyond the four ye beyond the four year period in the circumstances narrated above. 4.8. Applying the propositions laid down in the above case law to the facts to this case, we have to 4.8. Applying the propositions laid down in the above case law to the facts to this case, we have to 4.8. Applying the propositions laid down in the above case law to the facts to this case, we have to necessarily hold that the re necessarily hold that the re-opening of the assessment proceedings is not valid that there is not opening of the assessment proceedings is not valid that there is not even a whisper in the reasons recorded for the reopening of the assessment that there is a failure isper in the reasons recorded for the reopening of the assessment that there is a failure isper in the reasons recorded for the reopening of the assessment that there is a failure on the part of the assessee to disclose fully and truly all the necessary material facts required for on the part of the assessee to disclose fully and truly all the necessary material facts required for on the part of the assessee to disclose fully and truly all the necessary material facts required for assessment in view of the 1st proviso to Section 147 of the Act. assessment in view of the 1st proviso to Section 147 of the Act. In this case no tangible materials In this case no tangible materials have come to the possession of the Assessing Officer subsequent to the Assessment Order u/s have come to the possession of the Assessing Officer subsequent to the Assessment Order u/s have come to the possession of the Assessing Officer subsequent to the Assessment Order u/s 143(3). Re-opening is done based on the same material and record and hence it is bad in law. As opening is done based on the same material and record and hence it is bad in law. As opening is done based on the same material and record and hence it is bad in law. As far as the contention, that ther far as the contention, that there is a change in opinion is concerned, we are unable to agree with e is a change in opinion is concerned, we are unable to agree with the ld. Counsel for the assessee as there was neither a query on this issue by the Assessing Officer the ld. Counsel for the assessee as there was neither a query on this issue by the Assessing Officer the ld. Counsel for the assessee as there was neither a query on this issue by the Assessing Officer during the original assessment proceedings, nor there was a reply by the assessee. Hence during the original assessment proceedings, nor there was a reply by the assessee. Hence during the original assessment proceedings, nor there was a reply by the assessee. Hence there was no opinion formed. Thus, the question of change of opinion does not arise. was no opinion formed. Thus, the question of change of opinion does not arise. was no opinion formed. Thus, the question of change of opinion does not arise. 4.9. In any event, as we have held that the re 4.9. In any event, as we have held that the re-opening is bad in law as it does not fulfill the opening is bad in law as it does not fulfill the requirement of the Proviso to Section 147 of the Act, and as no tangible requirement of the Proviso to Section 147 of the Act, and as no tangible material has come to the material has come to the possession of the Assessing Officer, we quash the assessment and allow the appeal of the assessee. possession of the Assessing Officer, we quash the assessment and allow the appeal of the assessee. possession of the Assessing Officer, we quash the assessment and allow the appeal of the assessee. 5. In the result, the appeal of the assessee is allowed. 5. In the result, the appeal of the assessee is allowed. 5.1. Hence for this reason, we have to necessarily hold that the reopenin 5.1. Hence for this reason, we have to necessarily hold that the reopening of the assessment is bad g of the assessment is bad in law. 6. Section 151 of the Act, reads as follows: of the Act, reads as follows:- "151. Sanction for issue of notice. "151. Sanction for issue of notice.--(1) No notice shall be issued under section 148 by an (1) No notice shall be issued under section 148 by an Assessing Officer, after the e Assessing Officer, after the expiry of a period of four years from the end of the relevant xpiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or assessment year, unless the Principal Chief Commissioner or Chief Commissioner or assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is Assessing Officer, that it is a fit case for the issue of such notice."

ITA No. 406/Kol/2018 Assessment Year: 2008-09 & ITA No. 407/Kol/2018 Assessment Year: 2012-13 C.O. No. 407/Kol/2018 Assessment Year: 2008-09 M/s. Mala Roy & Others 6.1. Admittedly, the approval u/s 151(1) of the Act, in the case on hand has been granted by the 6.1. Admittedly, the approval u/s 151(1) of the Act, in the case on hand has been granted by the 6.1. Admittedly, the approval u/s 151(1) of the Act, in the case on hand has been granted by the Additional Commissioner of Income Tax Range Additional Commissioner of Income Tax Range - 7 vide order dated 31.03.2015 vide No. Addl. 7 vide order dated 31.03.2015 vide No. Addl. CIT/Range-7/Kol/148/2014 7/Kol/148/2014-15/3916 and not by the Commissioner of Income Tax as mandated 15/3916 and not by the Commissioner of Income Tax as mandated under the Act. Hence the reopening in question is bad in law as held by the Hon'ble Bombay High under the Act. Hence the reopening in question is bad in law as held by the Hon'ble Bombay High under the Act. Hence the reopening in question is bad in law as held by the Hon'ble Bombay High Court in the case of Ghanshyamdas Khabrani vs. ACIT 346 ITR 443, wherein it has been held as Court in the case of Ghanshyamdas Khabrani vs. ACIT 346 ITR 443, wherein it has been held as Court in the case of Ghanshyamdas Khabrani vs. ACIT 346 ITR 443, wherein it has been held as follows:- "The second ground upon which the reopening is sought to be challenged is that the "The second ground upon which the reopening is sought to be challenged is that the "The second ground upon which the reopening is sought to be challenged is that the mandatory requirement of section 151(2) has not been fulfilled. Section 151 requires a mandatory requirement of section 151(2) has not been fulfilled. Section 151 requires a mandatory requirement of section 151(2) has not been fulfilled. Section 151 requires a sanction to be taken for the issuance of a notice under section 148 in certain sanction to be taken for the issuance of a notice under section 148 in certain sanction to be taken for the issuance of a notice under section 148 in certain cases. In the instant case, an assessment had not been made under section 143(3) or section 147 for instant case, an assessment had not been made under section 143(3) or section 147 for instant case, an assessment had not been made under section 143(3) or section 147 for assessment year 2004 assessment year 2004-05. Hence, under sub-section (2) of section 151, no notice can be section (2) of section 151, no notice can be issued under section 148 by an Assessing Officer who is below the ran issued under section 148 by an Assessing Officer who is below the ran issued under section 148 by an Assessing Officer who is below the rank of Joint Commissioner after the expiry of 4 years from the end of the relevant assessment year Commissioner after the expiry of 4 years from the end of the relevant assessment year Commissioner after the expiry of 4 years from the end of the relevant assessment year unless the Joint Commissioner is satisfied, on the reasons recorded by such Assessing unless the Joint Commissioner is satisfied, on the reasons recorded by such Assessing unless the Joint Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice. The expressi Officer, that it is a fit case for the issue of such notice. The expressi Officer, that it is a fit case for the issue of such notice. The expression 'Joint Commissioner' is defined in section 2(28C) to mean a person appointed to be a Joint Commissioner' is defined in section 2(28C) to mean a person appointed to be a Joint Commissioner' is defined in section 2(28C) to mean a person appointed to be a Joint Commissioner of Income Commissioner of Income-tax or an Additional Commissioner of Income tax or an Additional Commissioner of Income-tax under section 117(1). In the instant case, the record before the Court indicates that the A 117(1). In the instant case, the record before the Court indicates that the A 117(1). In the instant case, the record before the Court indicates that the Assessing Officer submitted a proposal on 28 Officer submitted a proposal on 28-3-2011 to the Commissioner (Appeals) through the 2011 to the Commissioner (Appeals) through the Additional Commissioner. On 28 Additional Commissioner. On 28-3-2011, the Additional Commissioner forwarded the 2011, the Additional Commissioner forwarded the proposal to the Commissioner. proposal to the Commissioner. On this, a communication was issued on 29 On this, a communication was issued on 29-3-2011 from the office of the Commissioner 2011 from the office of the Commissioner (1) conveying approval to the proposal submitted by the Assessing Officer. There is merit (1) conveying approval to the proposal submitted by the Assessing Officer. There is merit (1) conveying approval to the proposal submitted by the Assessing Officer. There is merit in the contention raised on behalf of the assessee that the requirement of in the contention raised on behalf of the assessee that the requirement of in the contention raised on behalf of the assessee that the requirement of section 151(2) could have only been fulfilled by the satisfaction of the Joint Commissioner that this is a could have only been fulfilled by the satisfaction of the Joint Commissioner that this is a could have only been fulfilled by the satisfaction of the Joint Commissioner that this is a fit case for the issuance of a notice under fit case for the issuance of a notice under section 148. Section 151(2) Section 151(2) mandates that the satisfaction has to be of the Joint Commissioner. That expression has a distinct meaning satisfaction has to be of the Joint Commissioner. That expression has a distinct meaning satisfaction has to be of the Joint Commissioner. That expression has a distinct meaning by virtue of the definition in by virtue of the definition in section 2(28C). The Commissioner is not a Joint . The Commissioner is not a Joint Commissioner within the meaning of Commissioner within the meaning of section 2(28C). In the instant case, the Additional . In the instant case, the Additional Commissioner forwarded the proposal submitted by the Assessing Offi Commissioner forwarded the proposal submitted by the Assessing Offi Commissioner forwarded the proposal submitted by the Assessing Officer to the Commissioner. The approval which has been granted is not by the Additional Commissioner. The approval which has been granted is not by the Additional Commissioner. The approval which has been granted is not by the Additional Commissioner but by the Commissioner. There is no statutory provision under which a Commissioner but by the Commissioner. There is no statutory provision under which a Commissioner but by the Commissioner. There is no statutory provision under which a power to be exercised by an officer can be exercised by a superior officer. When the power to be exercised by an officer can be exercised by a superior officer. When the power to be exercised by an officer can be exercised by a superior officer. When the statute mandates the satisfaction of a particular functionary for the exercise of a power, tatute mandates the satisfaction of a particular functionary for the exercise of a power, tatute mandates the satisfaction of a particular functionary for the exercise of a power, the satisfaction must be of that authority. Where a statute requires something to be the satisfaction must be of that authority. Where a statute requires something to be the satisfaction must be of that authority. Where a statute requires something to be done in a particular manner, it has to be done in that manner. [Para 6] Once the done in a particular manner, it has to be done in that manner. [Para 6] Once the done in a particular manner, it has to be done in that manner. [Para 6] Once the Court has come to the conclusion that there was no compliance of the mandatory has come to the conclusion that there was no compliance of the mandatory has come to the conclusion that there was no compliance of the mandatory requirements of sections 147 sections 147 and 151(2), the notice reopening the assessmen , the notice reopening the assessment cannot be sustained in law. [Para 7] Under similar circumstances, the Lucknow Bench of the ITAT sustained in law. [Para 7] Under similar circumstances, the Lucknow Bench of the ITAT sustained in law. [Para 7] Under similar circumstances, the Lucknow Bench of the ITAT in the case of Balbir Singh, being ITA No. 880/K/2014, dt. 13/03/2015, wherein the in the case of Balbir Singh, being ITA No. 880/K/2014, dt. 13/03/2015, wherein the in the case of Balbir Singh, being ITA No. 880/K/2014, dt. 13/03/2015, wherein the judgement of the Delhi High Court in the case of judgement of the Delhi High Court in the case of CIT vs. SPL's Siddhartha Ltd. [2012] 345 's Siddhartha Ltd. [2012] 345 ITR 223 (Delhi) wherein it has been held as follows: ITR 223 (Delhi) wherein it has been held as follows:- It was apparent from records that the Assessing Officer had specifically sought the It was apparent from records that the Assessing Officer had specifically sought the It was apparent from records that the Assessing Officer had specifically sought the approval of the Commissioner only. Therefore, it approval of the Commissioner only. Therefore, it could not be said that the Joint could not be said that the Joint Commissioner/Additional Commissioner had granted the approval. Further, no doubt, Commissioner/Additional Commissioner had granted the approval. Further, no doubt, Commissioner/Additional Commissioner had granted the approval. Further, no doubt, the file was routed through Additional Commissioner. However, he also, in turn the file was routed through Additional Commissioner. However, he also, in turn the file was routed through Additional Commissioner. However, he also, in turn

ITA No. 406/Kol/2018 Assessment Year: 2008-09 & ITA No. 407/Kol/2018 Assessment Year: 2012-13 C.O. No. 407/Kol/2018 Assessment Year: 2008-09 M/s. Mala Roy & Others forwarded the same to the Commissioner. [Para 4] It is clear forwarded the same to the Commissioner. [Para 4] It is clear that the Additional CIT did that the Additional CIT did not apply his mind or gave any sanction. Instead, he requested Commissioner to accord not apply his mind or gave any sanction. Instead, he requested Commissioner to accord not apply his mind or gave any sanction. Instead, he requested Commissioner to accord the approval. It, thus, cannot be said that it is an irregularity curable under section the approval. It, thus, cannot be said that it is an irregularity curable under section the approval. It, thus, cannot be said that it is an irregularity curable under section 292B. [Para 5] Section 116 also defines the Income 292B. [Para 5] Section 116 also defines the Income-tax authorities as different and authorities as different and distinct Authorities. Such different and distinct authorities have to exercise their powers distinct Authorities. Such different and distinct authorities have to exercise their powers distinct Authorities. Such different and distinct authorities have to exercise their powers in accordance with law as per the powers given to them in the specified circumstances. If in accordance with law as per the powers given to them in the specified circumstances. If in accordance with law as per the powers given to them in the specified circumstances. If powers conferred on a particular authority a powers conferred on a particular authority are arrogated by other authority without re arrogated by other authority without mandate of law, it will create chaos in the administration of law and hierarchy of mandate of law, it will create chaos in the administration of law and hierarchy of mandate of law, it will create chaos in the administration of law and hierarchy of administration will mean nothing. Satisfaction of one authority cannot be substituted by administration will mean nothing. Satisfaction of one authority cannot be substituted by administration will mean nothing. Satisfaction of one authority cannot be substituted by the satisfaction of the other authority. It the satisfaction of the other authority. It is trite that when a statute requires, a thing to is trite that when a statute requires, a thing to be done in a certain manner, it shall be done in that manner alone and the Court would be done in a certain manner, it shall be done in that manner alone and the Court would be done in a certain manner, it shall be done in that manner alone and the Court would not expect its being done in some other manner. [Para 7] Thus, if authority is given not expect its being done in some other manner. [Para 7] Thus, if authority is given not expect its being done in some other manner. [Para 7] Thus, if authority is given expressly by affirmative words upo expressly by affirmative words upon a defined condition, the expression of that condition n a defined condition, the expression of that condition excludes the doing of the Act authorised under other circumstances than those as excludes the doing of the Act authorised under other circumstances than those as excludes the doing of the Act authorised under other circumstances than those as defined. It is also established principle of law that if a particular authority has been defined. It is also established principle of law that if a particular authority has been defined. It is also established principle of law that if a particular authority has been designated to record his/her s designated to record his/her satisfaction on any particular issue, then it is that authority atisfaction on any particular issue, then it is that authority alone who should apply his/her independent mind to record his/her satisfaction and alone who should apply his/her independent mind to record his/her satisfaction and alone who should apply his/her independent mind to record his/her satisfaction and further mandatory condition is that the satisfaction recorded should be "independent" further mandatory condition is that the satisfaction recorded should be "independent" further mandatory condition is that the satisfaction recorded should be "independent" and not "borrowed" or "d and not "borrowed" or "dictated" satisfaction. Law in this regard is now well ictated" satisfaction. Law in this regard is now well- settled. [Para 8] The Apex Court in the case of Anirudh Sinhji Karan Sinhji Jadeja v. State of [Para 8] The Apex Court in the case of Anirudh Sinhji Karan Sinhji Jadeja v. State of [Para 8] The Apex Court in the case of Anirudh Sinhji Karan Sinhji Jadeja v. State of Gujarat [1995] 5 SCC 302 has held that if a statutory authority has been vested with Gujarat [1995] 5 SCC 302 has held that if a statutory authority has been vested with Gujarat [1995] 5 SCC 302 has held that if a statutory authority has been vested with jurisdiction, he has jurisdiction, he has to exercise it according to its own discretion. If discretion is exercised to exercise it according to its own discretion. If discretion is exercised under the direction or in compliance with some higher authorities instruction, then it under the direction or in compliance with some higher authorities instruction, then it under the direction or in compliance with some higher authorities instruction, then it will be a case of failure to exercise discretion altogether. [Para 9] Therefore, the will be a case of failure to exercise discretion altogether. [Para 9] Therefore, the will be a case of failure to exercise discretion altogether. [Para 9] Therefore, the Tribunal has rightly decided the legal aspect, keeping in view well has rightly decided the legal aspect, keeping in view well-established principles established principles of law laid down in catena of judgments including that of the Supreme Court. [Para 10] of law laid down in catena of judgments including that of the Supreme Court. [Para 10] of law laid down in catena of judgments including that of the Supreme Court. [Para 10] No question of law arises. This appeal is accordingly dismissed. [Para 11] The Hon'ble No question of law arises. This appeal is accordingly dismissed. [Para 11] The Hon'ble No question of law arises. This appeal is accordingly dismissed. [Para 11] The Hon'ble Delhi High Court in the case of Delhi High Court in the case of Pr. CIT vs N.C. Cables in ITA No. 335/2015 judgement in ITA No. 335/2015 judgement dated 11.01.2017 held that approval under dated 11.01.2017 held that approval under section 151 is to be made after application of e after application of mind. It is not so in this case as mechanical approval is given by an officer who is not mind. It is not so in this case as mechanical approval is given by an officer who is not mind. It is not so in this case as mechanical approval is given by an officer who is not authorised to do so in law. authorised to do so in law. 6.2. Thus on this count also we hold that the reopening is bad in law. 6.2. Thus on this count also we hold that the reopening is bad in law. 7. Further a perusal of the reasons recorde 7. Further a perusal of the reasons recorded shows non-application of mind by the Assessing application of mind by the Assessing Officer. Directions have been given by the DDIT (Inv.) Unit Officer. Directions have been given by the DDIT (Inv.) Unit-2(1), Kolkata, vide communication 2(1), Kolkata, vide communication cited. The reasons recorded are only based on such directions. The reopening was done in cited. The reasons recorded are only based on such directions. The reopening was done in cited. The reasons recorded are only based on such directions. The reopening was done in compliance in such directions. tions. 7.1. The Hon'ble Delhi High Court in the case of 7.1. The Hon'ble Delhi High Court in the case of Commissioner of Income-tax, IV v.Insecticides tax, IV v.Insecticides (India) Ltd[2013] 357 ITR 330 (Delhi) upheld the order of the ITAT Delhi Bench in ITA Nos. 2332 [2013] 357 ITR 330 (Delhi) upheld the order of the ITAT Delhi Bench in ITA Nos. 2332 [2013] 357 ITR 330 (Delhi) upheld the order of the ITAT Delhi Bench in ITA Nos. 2332- 2333/Del/2010, holding as follows: /Del/2010, holding as follows:- "7. We may point out at this juncture itself that the Tribunal did not go into the question of "7. We may point out at this juncture itself that the Tribunal did not go into the question of "7. We may point out at this juncture itself that the Tribunal did not go into the question of merits. It only examined the question of the validity of the proceedings under Section 147 of the merits. It only examined the question of the validity of the proceedings under Section 147 of the merits. It only examined the question of the validity of the proceedings under Section 147 of the said Act. The Tribunal, in ess said Act. The Tribunal, in essence, held that the purported reasons for reopening the assessments ence, held that the purported reasons for reopening the assessments were entirely vague and devoid of any material. As such, on the available material, no reasonable were entirely vague and devoid of any material. As such, on the available material, no reasonable were entirely vague and devoid of any material. As such, on the available material, no reasonable person could have any reason to believe that income had escaped assessment. Consequently, person could have any reason to believe that income had escaped assessment. Consequently, person could have any reason to believe that income had escaped assessment. Consequently, the Tribunal held that the proceedings under Section 147 of the said Act were invalid. Tribunal held that the proceedings under Section 147 of the said Act were invalid. Tribunal held that the proceedings under Section 147 of the said Act were invalid.

ITA No. 406/Kol/2018 Assessment Year: 2008-09 & ITA No. 407/Kol/2018 Assessment Year: 2012-13 C.O. No. 407/Kol/2018 Assessment Year: 2008-09 M/s. Mala Roy & Others 8. The Tribunal gave detailed reasons for concluding that the proceedings under Section 147 8. The Tribunal gave detailed reasons for concluding that the proceedings under Section 147 8. The Tribunal gave detailed reasons for concluding that the proceedings under Section 147 were invalid. Instead of adding anything to the said reasons, we think it wo were invalid. Instead of adding anything to the said reasons, we think it would be appropriate if uld be appropriate if the same are reproduced:-- -- "In the case at hand, as is seen from the reasons recorded by the AO, we find that the AO has "In the case at hand, as is seen from the reasons recorded by the AO, we find that the AO has "In the case at hand, as is seen from the reasons recorded by the AO, we find that the AO has merely stated that it has been informed by the Director of Income merely stated that it has been informed by the Director of Income-tax (Inv.), New Delhi, vide tax (Inv.), New Delhi, vide letter dated 16.06.2006 that the above named company was involved in giving and taking bogus .2006 that the above named company was involved in giving and taking bogus .2006 that the above named company was involved in giving and taking bogus entries/transactions during the relevant year, which is actually unexplained income of the entries/transactions during the relevant year, which is actually unexplained income of the entries/transactions during the relevant year, which is actually unexplained income of the assessee company. The AO has further stated that the assessee company has failed to disclo assessee company. The AO has further stated that the assessee company has failed to disclo assessee company. The AO has further stated that the assessee company has failed to disclose fully and truly all material facts and source of these funds routed through bank account of the fully and truly all material facts and source of these funds routed through bank account of the fully and truly all material facts and source of these funds routed through bank account of the assessee company. In the reasons recorded, it is nowhere mentioned as to who had given bogus assessee company. In the reasons recorded, it is nowhere mentioned as to who had given bogus assessee company. In the reasons recorded, it is nowhere mentioned as to who had given bogus entries/transactions to the assessee or to whom the assessee had entries/transactions to the assessee or to whom the assessee had given bogus entries or given bogus entries or transactions. It is also nowhere mentioned as to on which dates and through which mode the transactions. It is also nowhere mentioned as to on which dates and through which mode the transactions. It is also nowhere mentioned as to on which dates and through which mode the bogus entries and transactions were made by the assessee. What was the information given by bogus entries and transactions were made by the assessee. What was the information given by bogus entries and transactions were made by the assessee. What was the information given by the Director of Income-tax (Inv.), New Delhi, vid tax (Inv.), New Delhi, vide letter dated 16.06.2006 has also not been e letter dated 16.06.2006 has also not been mentioned. In other words, the contents of the letter dated 16.06.2006 of the Director of Income mentioned. In other words, the contents of the letter dated 16.06.2006 of the Director of Income mentioned. In other words, the contents of the letter dated 16.06.2006 of the Director of Income- tax (Inv.), New Delhi have not been given. The AO has vaguely referred to certain tax (Inv.), New Delhi have not been given. The AO has vaguely referred to certain tax (Inv.), New Delhi have not been given. The AO has vaguely referred to certain communications that he had receiv communications that he had received from the DIT(Inv.), New Delhi; the AO did not mention the ed from the DIT(Inv.), New Delhi; the AO did not mention the facts mentioned in the said communication except that from the informations gathered by the facts mentioned in the said communication except that from the informations gathered by the facts mentioned in the said communication except that from the informations gathered by the DIT (Inv.), New Delhi that the assessee was involved in giving and taking accommodation entries DIT (Inv.), New Delhi that the assessee was involved in giving and taking accommodation entries DIT (Inv.), New Delhi that the assessee was involved in giving and taking accommodation entries only and represented unsecured money of the assessee company is actually unexplained income d represented unsecured money of the assessee company is actually unexplained income d represented unsecured money of the assessee company is actually unexplained income of the assessee company or that it has been informed by the Director of Income of the assessee company or that it has been informed by the Director of Income of the assessee company or that it has been informed by the Director of Income-tax (Inv.), New Delhi vide letter dated 16.06.2006 that the assessee company was involved in Delhi vide letter dated 16.06.2006 that the assessee company was involved in Delhi vide letter dated 16.06.2006 that the assessee company was involved in giving and taking bogus entries/transactions during the relevant financial year. The AO did not mention the details bogus entries/transactions during the relevant financial year. The AO did not mention the details bogus entries/transactions during the relevant financial year. The AO did not mention the details of transactions that represented unexplained income of the assessee company. The information of transactions that represented unexplained income of the assessee company. The information of transactions that represented unexplained income of the assessee company. The information on the basis of which the AO has initiated pro on the basis of which the AO has initiated proceedings u/s 147 of the Act are undoubtedly vague ceedings u/s 147 of the Act are undoubtedly vague and uncertain and cannot be construed to be sufficient and relevant material on the basis of and uncertain and cannot be construed to be sufficient and relevant material on the basis of and uncertain and cannot be construed to be sufficient and relevant material on the basis of which a reasonable person could have formed a belief that income had escaped assessment. In which a reasonable person could have formed a belief that income had escaped assessment. In which a reasonable person could have formed a belief that income had escaped assessment. In other words, the reasons recorded by the AO are totally vague, scanty and ambiguous. They are ons recorded by the AO are totally vague, scanty and ambiguous. They are ons recorded by the AO are totally vague, scanty and ambiguous. They are not clear and unambiguous but suffer from vagueness. The reasons recorded by the AO do not not clear and unambiguous but suffer from vagueness. The reasons recorded by the AO do not not clear and unambiguous but suffer from vagueness. The reasons recorded by the AO do not disclose the AO's mind as to what was the nature and amount of transaction or entries, which disclose the AO's mind as to what was the nature and amount of transaction or entries, which disclose the AO's mind as to what was the nature and amount of transaction or entries, which had been given or taken by the assessee in the relevant year. The reasons recorded by the AO also had been given or taken by the assessee in the relevant year. The reasons recorded by the AO also had been given or taken by the assessee in the relevant year. The reasons recorded by the AO also do not disclose his mind as to when and in what mode or way the bogus entries or transactions do not disclose his mind as to when and in what mode or way the bogus entries or transactions do not disclose his mind as to when and in what mode or way the bogus entries or transactions were given or taken by the assessee. From the reasons recorded, were given or taken by the assessee. From the reasons recorded, nobody can know what was the nobody can know what was the amount and nature of bogus entries or transactions given and taken by the assessee in the amount and nature of bogus entries or transactions given and taken by the assessee in the amount and nature of bogus entries or transactions given and taken by the assessee in the relevant year and with whom the transaction had taken place. As already noted above, it is well relevant year and with whom the transaction had taken place. As already noted above, it is well relevant year and with whom the transaction had taken place. As already noted above, it is well settled that only the reasons recorded b settled that only the reasons recorded by the AO for initiating proceedings u/s 147 of the Act are y the AO for initiating proceedings u/s 147 of the Act are to be looked at or examined for sustaining or setting aside a notice issued u/s 148 of the Act. The to be looked at or examined for sustaining or setting aside a notice issued u/s 148 of the Act. The to be looked at or examined for sustaining or setting aside a notice issued u/s 148 of the Act. The reasons are required to be read as they were recorded by the AO. No substitution or deletion is reasons are required to be read as they were recorded by the AO. No substitution or deletion is reasons are required to be read as they were recorded by the AO. No substitution or deletion is permissible. No addition can be made to those reasons. Therefore, the details of entries or ermissible. No addition can be made to those reasons. Therefore, the details of entries or ermissible. No addition can be made to those reasons. Therefore, the details of entries or amount mentioned in the assessment order and in respect of which ultimate addition has been amount mentioned in the assessment order and in respect of which ultimate addition has been amount mentioned in the assessment order and in respect of which ultimate addition has been made by the AO, cannot be made a basis to say that the reasons recorded b made by the AO, cannot be made a basis to say that the reasons recorded by the AO were with y the AO were with reference to those amounts mentioned in the assessment order. The reasons recorded by the AO reference to those amounts mentioned in the assessment order. The reasons recorded by the AO reference to those amounts mentioned in the assessment order. The reasons recorded by the AO are totally silent with regard to the amount and nature of bogus entries and transactions and the are totally silent with regard to the amount and nature of bogus entries and transactions and the are totally silent with regard to the amount and nature of bogus entries and transactions and the persons with whom the transactions had taken p persons with whom the transactions had taken place. In this respect, we may rely upon the lace. In this respect, we may rely upon the decision of Hon'ble jurisdictional Delhi High Court in the case of decision of Hon'ble jurisdictional Delhi High Court in the case of CIT v. Atul Jain CIT v. Atul Jain [2000] 299 ITR 383, in which case the information relied upon by the AO for 383, in which case the information relied upon by the AO for initiating proceedings u/s 147 of the initiating proceedings u/s 147 of the Act did indicate the source of the capital gain and nobody knew which shares were transacted Act did indicate the source of the capital gain and nobody knew which shares were transacted Act did indicate the source of the capital gain and nobody knew which shares were transacted

ITA No. 406/Kol/2018 Assessment Year: 2008-09 & ITA No. 407/Kol/2018 Assessment Year: 2012-13 C.O. No. 407/Kol/2018 Assessment Year: 2008-09 M/s. Mala Roy & Others and with whom the transaction has taken place and in that case there were absolutely no details and with whom the transaction has taken place and in that case there were absolutely no details and with whom the transaction has taken place and in that case there were absolutely no details available and the information available and the information supplied was extremely scanty and vague and in that light of those supplied was extremely scanty and vague and in that light of those facts, the Hon'ble Jurisdictional Delhi High Court held that initiation of proceedings u/s 147 of facts, the Hon'ble Jurisdictional Delhi High Court held that initiation of proceedings u/s 147 of facts, the Hon'ble Jurisdictional Delhi High Court held that initiation of proceedings u/s 147 of the Act by the AO was not valid and justified in the eyes of law. The recent decision of H the Act by the AO was not valid and justified in the eyes of law. The recent decision of H the Act by the AO was not valid and justified in the eyes of law. The recent decision of Hon'ble jurisdictional High Court of Delhi in the case of Signature Hotels (P.) Ltd. (supra) also supports jurisdictional High Court of Delhi in the case of Signature Hotels (P.) Ltd. (supra) also supports jurisdictional High Court of Delhi in the case of Signature Hotels (P.) Ltd. (supra) also supports the view we have taken above." the view we have taken above." 9. We do not see any reason to differ with the view expressed by the Tribunal. No substantial 9. We do not see any reason to differ with the view expressed by the Tribunal. No substantial 9. We do not see any reason to differ with the view expressed by the Tribunal. No substantial question of law arises for our consideration. The appeals are dismissed. There shall be no order or our consideration. The appeals are dismissed. There shall be no order or our consideration. The appeals are dismissed. There shall be no order as to costs. 7.2. The Jurisdictional High Court in the case of 7.2. The Jurisdictional High Court in the case of Principal CIT vs G&G Pharma India Ltd Principal CIT vs G&G Pharma India Ltd. in ITA 545/2015 vide order dt. 08.10.2015 at paras 12 and 13 was held as follows: dt. 08.10.2015 at paras 12 and 13 was held as follows: "12. In the present case, after setting out four entries, stated to have been received by the assessee "12. In the present case, after setting out four entries, stated to have been received by the assessee "12. In the present case, after setting out four entries, stated to have been received by the assessee on a single date i.e. 10th Feb. 2003, from four entries which were received by the assessee on a on a single date i.e. 10th Feb. 2003, from four entries which were received by the assessee on a on a single date i.e. 10th Feb. 2003, from four entries which were received by the assessee on a single date i.e. 10th Feb. 2003, from four entries which were termed as accommodation entries, single date i.e. 10th Feb. 2003, from four entries which were termed as accommodation entries, single date i.e. 10th Feb. 2003, from four entries which were termed as accommodation entries, which information was given to him by the Director Investigation, the A.O. stated: 'I have also which information was given to him by the Director Investigation, the A.O. stated: 'I have also which information was given to him by the Director Investigation, the A.O. stated: 'I have also perused various materials and report from Investigation Wing and perused various materials and report from Investigation Wing and on that basis it is evident that on that basis it is evident that the assessee company has, introduced its own unaccounted money in its bank account by way of the assessee company has, introduced its own unaccounted money in its bank account by way of the assessee company has, introduced its own unaccounted money in its bank account by way of above accommodation entries'. The above conclusion is unhelpful in understanding whether the above accommodation entries'. The above conclusion is unhelpful in understanding whether the above accommodation entries'. The above conclusion is unhelpful in understanding whether the A.O. applied his mind to the material A.O. applied his mind to the materials that he talks about particularly since he did not describe s that he talks about particularly since he did not describe what those materials were. Once the date on which the so called accommodation entries were what those materials were. Once the date on which the so called accommodation entries were what those materials were. Once the date on which the so called accommodation entries were provided is known, it would not have been difficult for the A.O., if he had in fact undertaken the provided is known, it would not have been difficult for the A.O., if he had in fact undertaken the provided is known, it would not have been difficult for the A.O., if he had in fact undertaken the exercise, to make a reference to the manner in which those very entries were provided in the ise, to make a reference to the manner in which those very entries were provided in the ise, to make a reference to the manner in which those very entries were provided in the accounts of the assessee, which must have been tendered along with the return, which was filed accounts of the assessee, which must have been tendered along with the return, which was filed accounts of the assessee, which must have been tendered along with the return, which was filed on 14th November, 2004 and was processed u/s 143(3) of the Act. Without f on 14th November, 2004 and was processed u/s 143(3) of the Act. Without forming a prima facie orming a prima facie opinion, on the basis of such material, it was not possible for the A.O. to have simply concluded: 'it opinion, on the basis of such material, it was not possible for the A.O. to have simply concluded: 'it opinion, on the basis of such material, it was not possible for the A.O. to have simply concluded: 'it is evident that the assessee company has introduced its own unaccounted money in its bank by is evident that the assessee company has introduced its own unaccounted money in its bank by is evident that the assessee company has introduced its own unaccounted money in its bank by way of accommodation entries'. In the c way of accommodation entries'. In the considered view of the Court, in light of the law explained onsidered view of the Court, in light of the law explained with sufficient clarity by the Supreme Court in the decision discussed, the basic requirement that with sufficient clarity by the Supreme Court in the decision discussed, the basic requirement that with sufficient clarity by the Supreme Court in the decision discussed, the basic requirement that the A.O. must apply his mind to the materials in order to have reasons to believe that the income the A.O. must apply his mind to the materials in order to have reasons to believe that the income the A.O. must apply his mind to the materials in order to have reasons to believe that the income of the assessee escaped assessment is missing in the present case. of the assessee escaped assessment is missing in the present case. 13. A perusal of the reasons recorded demonstrate total non application of mind by the A.O. Thus 13. A perusal of the reasons recorded demonstrate total non application of mind by the A.O. Thus 13. A perusal of the reasons recorded demonstrate total non application of mind by the A.O. Thus applying the proposition laid down by the Jurisdictional High Court in G&G Pharma India (su applying the proposition laid down by the Jurisdictional High Court in G&G Pharma India (su applying the proposition laid down by the Jurisdictional High Court in G&G Pharma India (supra) we hold that the reopening of assessment is bad in law" we hold that the reopening of assessment is bad in law" 7.3. The Hon'ble Delhi High Court in the case of 7.3. The Hon'ble Delhi High Court in the case of Signature Hotels (P) Ltd. vs ITO and another Signature Hotels (P) Ltd. vs ITO and another, reported in 338 ITR 51 (Delhi) has under similar reported in 338 ITR 51 (Delhi) has under similar circumstances held as follows: circumstances held as follows: "For the A.Y. 2003-04, the return of income of the assessee company was accepted u/s 143(1) of 04, the return of income of the assessee company was accepted u/s 143(1) of 04, the return of income of the assessee company was accepted u/s 143(1) of the Income-tax Act, 1961 and was not selected for scrutiny. Subsequently, the , 1961 and was not selected for scrutiny. Subsequently, the , 1961 and was not selected for scrutiny. Subsequently, the Assessing Officer issued notice u/s 148 which was objected by the assessee. The Assessing Officer rejected the issued notice u/s 148 which was objected by the assessee. The Assessing Officer rejected the issued notice u/s 148 which was objected by the assessee. The Assessing Officer rejected the objections. The assessee company filed writ petition and challenged the notice and the order on objections. The assessee company filed writ petition and challenged the notice and the order on objections. The assessee company filed writ petition and challenged the notice and the order on objections. The Delhi High Court allowed the wri The Delhi High Court allowed the writ petition and held as under: '(i) Section 147 Section 147 of the Income- tax Act, 1961, is wide but not plenary. The assessing Officer must have 'reasons to believe' that tax Act, 1961, is wide but not plenary. The assessing Officer must have 'reasons to believe' that tax Act, 1961, is wide but not plenary. The assessing Officer must have 'reasons to believe' that

10 ITA No. 406/Kol/2018 Assessment Year: 2008-09 & ITA No. 407/Kol/2018 Assessment Year: 2012-13 C.O. No. 407/Kol/2018 Assessment Year: 2008-09 M/s. Mala Roy & Others income chargeable to tax has escaped assessme income chargeable to tax has escaped assessment. This is mandatory and the 'reason to believe' nt. This is mandatory and the 'reason to believe' are required to be recorded in writing by the Assessing Officer. are required to be recorded in writing by the Assessing Officer. (ii) A notice u/s 148 can be quashed if the 'belief' is not bona fide, or one based on vague, (ii) A notice u/s 148 can be quashed if the 'belief' is not bona fide, or one based on vague, (ii) A notice u/s 148 can be quashed if the 'belief' is not bona fide, or one based on vague, irrelevant and non-specific information. The b specific information. The basis of the belief should be discernible from the asis of the belief should be discernible from the material on record, which was available with the Assessing Officer when he recorded the reasons. material on record, which was available with the Assessing Officer when he recorded the reasons. material on record, which was available with the Assessing Officer when he recorded the reasons. There should be a link between the reasons and the evidence material available with the There should be a link between the reasons and the evidence material available with the There should be a link between the reasons and the evidence material available with the Assessing Officer. (iii) The reassessment proceedings were initiated on the basis of information received from the iii) The reassessment proceedings were initiated on the basis of information received from the iii) The reassessment proceedings were initiated on the basis of information received from the Director of Income-tax (Investigation) that the petitioner had introduced money amounting to tax (Investigation) that the petitioner had introduced money amounting to tax (Investigation) that the petitioner had introduced money amounting to Rs.5 lakhs during F.Y.2002 Rs.5 lakhs during F.Y.2002-03 as stated in the annexure. According to the information, the o the information, the amount received from a company, S, was nothing but an accommodation entry and the assessee amount received from a company, S, was nothing but an accommodation entry and the assessee amount received from a company, S, was nothing but an accommodation entry and the assessee was the beneficiary. The reasons did not satisfy the requirements of was the beneficiary. The reasons did not satisfy the requirements of section 147 section 147 of the Act. There was no reference to any document or statement, except the annexure. The annexure could not be was no reference to any document or statement, except the annexure. The annexure could not be was no reference to any document or statement, except the annexure. The annexure could not be regarded as a material or evidence that prima facie showed or established nexus or link which regarded as a material or evidence that prima facie showed or established nexus or link which regarded as a material or evidence that prima facie showed or established nexus or link which disclosed escapement of income. The annexure was not a poin disclosed escapement of income. The annexure was not a pointer and did not indicate ter and did not indicate escapement of income. (iv) Further, the Assessing Officer did not apply his own mind to the information and examine the (iv) Further, the Assessing Officer did not apply his own mind to the information and examine the (iv) Further, the Assessing Officer did not apply his own mind to the information and examine the basis and material of the information. There was no dispute that the company, S, bad a paid up basis and material of the information. There was no dispute that the company, S, bad a paid up basis and material of the information. There was no dispute that the company, S, bad a paid up capital of Rs. 90 lakhs and was incorporated on January 4, 1989, and was also allotted a 90 lakhs and was incorporated on January 4, 1989, and was also allotted a 90 lakhs and was incorporated on January 4, 1989, and was also allotted a permanent account number in September 2001. Thus, it could not be held to be a fictitious permanent account number in September 2001. Thus, it could not be held to be a fictitious permanent account number in September 2001. Thus, it could not be held to be a fictitious person. The reassessment proceedings were not valid and were liable to the quashed. person. The reassessment proceedings were not valid and were liable to the quashed. person. The reassessment proceedings were not valid and were liable to the quashed. 7.4. In the case of CIT vs Atul Jain CIT vs Atul Jain reported in 299 ITR 383 it has been held as follows: reported in 299 ITR 383 it has been held as follows: "Held dismissing the appeals, that the only information was that the assessee had taken a bogus "Held dismissing the appeals, that the only information was that the assessee had taken a bogus "Held dismissing the appeals, that the only information was that the assessee had taken a bogus entry of capital gains by paying cash along with some premium for taking a cheque for that paying cash along with some premium for taking a cheque for that amount. The information did not indicate the source of the capital gains which in this case were amount. The information did not indicate the source of the capital gains which in this case were amount. The information did not indicate the source of the capital gains which in this case were shares. There was no information which shares had been transferred and with whom the shares. There was no information which shares had been transferred and with whom the shares. There was no information which shares had been transferred and with whom the transaction had taken place. The A.O. did not verify the correctness of information received by ion had taken place. The A.O. did not verify the correctness of information received by ion had taken place. The A.O. did not verify the correctness of information received by him but merely accepted the truth of the vague information in a mechanical manner. The A.O. him but merely accepted the truth of the vague information in a mechanical manner. The A.O. him but merely accepted the truth of the vague information in a mechanical manner. The A.O. had not even recorded his satisfaction about the correctness or otherwise of had not even recorded his satisfaction about the correctness or otherwise of the information for issuing a notice u/s 148. What had been recorded by the A.O. as his 'reasons to believe' was issuing a notice u/s 148. What had been recorded by the A.O. as his 'reasons to believe' was issuing a notice u/s 148. What had been recorded by the A.O. as his 'reasons to believe' was nothing more than a report given by him to the Commissioner. The submission of the report was nothing more than a report given by him to the Commissioner. The submission of the report was nothing more than a report given by him to the Commissioner. The submission of the report was not the same as recording of reasons to believe not the same as recording of reasons to believe for issuing a notice. The A.O. had clearly for issuing a notice. The A.O. had clearly substituted form for substance and therefore the action of the A.O. was not sustainable" substituted form for substance and therefore the action of the A.O. was not sustainable" substituted form for substance and therefore the action of the A.O. was not sustainable" 8. Respectfully applying the propositions of law laid down in the judgments cited above to the 8. Respectfully applying the propositions of law laid down in the judgments cited above to the 8. Respectfully applying the propositions of law laid down in the judgments cited above to the facts of the case, we have n facts of the case, we have no other alternative but to hold that the reopening of the assessments is o other alternative but to hold that the reopening of the assessments is bad in law. Hence we quash the re quash the re-opening of assessment.”

11 ITA No. 406/Kol/2018 Assessment Year: 2008-09 & ITA No. 407/Kol/2018 Assessment Year: 2012-13 C.O. No. 407/Kol/2018 Assessment Year: 2008-09 M/s. Mala Roy & Others 9. As we have quashed the reopening of assessment, the revenue appeal in ITA As we have quashed the reopening of assessment, the revenue appeal in ITA As we have quashed the reopening of assessment, the revenue appeal in ITA No. 406/Kol/2018, for the Assessment Year 2008 No. 406/Kol/2018, for the Assessment Year 2008-09 is hereby dismissed. 09 is hereby dismissed. 10. We now take up the revenue appeal We now take up the revenue appeal in ITA No. 407/Kol/2018; Assessment in ITA No. 407/Kol/2018; Assessment Year 2012-13. The revenue has raised the following grounds of appeal. 13. The revenue has raised the following grounds of appeal. 13. The revenue has raised the following grounds of appeal. “1. That on the facts of the case, Ld. CIT(A) That on the facts of the case, Ld. CIT(A)-20, Kolkata had erred in 20, Kolkata had erred in deleting the addition of Rs.3,45,90,750/ deleting the addition of Rs.3,45,90,750/- for under reporting of for under reporting of production of production of iron ore. 2. That on the facts of the case Ld. CIT(A) That on the facts of the case Ld. CIT(A)-20, Kolkata had erred in 20, Kolkata had erred in deleting the addition of Rs.2,28,664/ deleting the addition of Rs.2,28,664/- added as per Rule 8D(iii) added as per Rule 8D(iii) r.w.s. 14A of the I.T. Act, 1961 r.w.s. 14A of the I.T. Act, 1961. 3. That the appellant craves leave to add, alter, amend or withdraw That the appellant craves leave to add, alter, amend or withdraw That the appellant craves leave to add, alter, amend or withdraw or grounds of appeal before or at the time of hearing.” any ground any ground or grounds of appeal before or at the time of hearing.”

12 ITA No. 406/Kol/2018 Assessment Year: 2008-09 & ITA No. 407/Kol/2018 Assessment Year: 2012-13 C.O. No. 407/Kol/2018 Assessment Year: 2008-09 M/s. Mala Roy & Others 12.2. This factual finding could not be controverted by the ld. D/R. Thus, we dismiss This factual finding could not be controverted by the ld. D/R. Thus, we dismiss This factual finding could not be controverted by the ld. D/R. Thus, we dismiss this ground of the revenue. 13. In the result, this appeal of the In the result, this appeal of the revenue is dismissed. 14. In the result, both the revenue appeals are dismissed and the cross In the result, both the revenue appeals are dismissed and the cross In the result, both the revenue appeals are dismissed and the cross-objection by the assessee is allowed. Kolkata, the Kolkata, the 31st day of December, 2019. Sd/- Sd/- [Aby T. Varkey] [J. Sudhakar J. Sudhakar Reddy] Judicial Member Accountant Member Accountant Member Dated : 31.12.2019 {SC SPS}

Copy of the order forwarded to: 1. M/s. Mala Roy & Others 192D, Netaji Subhas Chandra Bose Road 192D, Netaji Subhas Chandra Bose Road Tollygunge Kolkata – 700 040