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Facts
The assessee challenged the reopening of assessment for AY 2012-13, arguing a lack of mandatory compliance with Section 147/151 of the Income Tax Act. The reopening was based on alleged escapement of income due to share application money, which was accepted during the original assessment.
Held
The Tribunal found that the reasons recorded for reopening did not explicitly state any failure on the part of the assessee to disclose true and material facts. Furthermore, the approval granted under Section 151 of the Act was not in accordance with law, as it did not demonstrate an independent application of mind.
Key Issues
Whether the assumption of jurisdiction for reopening the assessment beyond four years was valid without specific allegations of failure to disclose true and material facts by the assessee? Was the approval under Section 151 granted in accordance with law?
Sections Cited
147, 151, 148, 142(1), 143(3)
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Income Tax Appellate Tribunal, “A” BENCH, DELHI
Before: SHRI S RIFAUR RAHMAN & SHRI ANUBHAV SHARMA
This appeal is preferred by the assessee against the order dated 29.07.2025 of the Ld. Commissioner of Income Tax(A)-3, Gurgaon in Appeal No : 10417/CIT(A)-3/GGN/2019-20 arising out of the order dated 17.12.2019 u/s 147 r.w.s 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the DCIT,CC-2 for AY: 2012-13.
Heard and perused the records and ld. Counsel for the assessee had primarily questioned the assumption of jurisdiction for want of mandatory compliance of Section 147/151 of the Act for which ld. DR has submitted that assumption of jurisdiction was completely in accordance with law.
Reasons were duly supplied and there were no objections raised at the time of assessment.
What comes up on hearing is that assessee by way of calling for information under Right to Information Act, 2005 had sought information as to if reasons were recorded for reopening the impugned case u/s 147 and a certified copy of same was called for and further assessee had called for information whether any approval u/s 151 of the Act was obtained from ld. Pr.CIT and a certified copy of same was sought. initiating proceedings u/s 147 of the Act and for obtaining approval of Pr.CIT u/s 151(1) of the Act is relied upon before us and the same shows that while granting the approval the PCIT records that satisfaction is recorded ‘as per annexure’. The annexure happens to be the reasons for issuance of notice u/s 148 of the Act dated 27.03.2019 itself, thus to mention ‘as per annexure’ in no way fulfils the mandate of law which require that approval prima facie reflect application of mind for the purpose of being satisfied that the reasons recorded make up a fit case for issuance of notice u/s 148 of the Act.
Then as we go through the reasons we find that the assessment involved in AY: 2012-13 and that the reopening is beyond the period of 4 years. However, there is not a word in the reasons showing that there was any failure on the part of the assessee who had not disclosed true and material facts leading to escapement of income. This aspect was specifically bought to the attention of ld. CIT(A) as reflected in the submissions filed at the stage of First Appellate Authority, copy of which is available at page 132 of the paper book. However, on a broad reasoning the ground were dismissed. the basis of receipt of share application of money from M/s Prraneta Industries Ltd. which were accepted by the AO during the course of original assessment proceedings as vide notice u/s 142(1) dated 06.01.2014 AO had called for details of amounts received by way of a share application money etc. and by reply dated 24.01.2014 assessee had furnished all vital information in the form of addresses of the investor, bank statement, ITR, PAN details, share application form and share allotment letter and audited financial statements and thereupon the order dated 24.03.2014 u/s 143(3) was passed.
Thus, that all the more needed specific allegation as to how there was failure on the part of the assessee to disclose true and material particulars so as to justify assumption of jurisdiction for reopening the assessment beyond four years.
At the same time relying the reasons forming part of Annexure A to grant the approval u/s 151 of the Act leaves no doubt in the mind of this Bench that approval if at all considered to be granted was not in accordance with law showing any application of independent mind.
M/s Anchor Alloys (P) ltd. (AY: 2012-13) 8. Accordingly, we are inclined to sustain ground No. 1 & 2. The appeal of the assessee is allowed. Impugned assessment is quashed.
Order pronounced in the open court on 12.12.2025