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Facts
The assessee's appeal for AY 2011-12 arises from an order confirming the addition of cash deposits amounting to Rs. 397.76 Lacs. These deposits were made in the assessee's bank account and led to the reopening of the case. The addition was made on a best judgment basis after the assessee failed to comply with the reopening procedures.
Held
The tribunal held that the reopening approval was granted in a mechanical manner, without proper application of mind by the approving authority. This was evidenced by the form used for recording reasons, which showed a non-application of mind similar to cases where reopening was quashed.
Key Issues
Whether the reopening of assessment under Section 147 was valid when the approval was granted mechanically without proper application of mind.
Sections Cited
144, 147, 148, 151
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Income Tax Appellate Tribunal, “DB” BENCH, AGRA
Before: HON’BLE SHRI SATBEER SINGH GODARA, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2011-12 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 15-06-2023 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 144 r.w.s. 147 of the Act on 24-12-2018. The sole grievance of the assessee is confirmation of addition of cash deposit for Rs.397.76 Lacs. The same represent cash deposited by the assessee in its bank account as maintained with ICICI Bank Ltd. The same led to reopening of the case. The assessee remained un- complied with. In the result, entire deposits of Rs.455.42 Lacs in two bank accounts were added to the income of the assessee on best judgment basis. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us. The registry has noted delay of 288 days in the appeal which stand condoned.
The Ld. AR, at the outset, raised a pertinent legal ground and stated that the reopening approval was given in a mechanical manner and therefore, the impugned proceedings are liable to be quashed. For the same, Ld. AR ahs referred to various judicial decisions, the copies of which have been placed on record. The same include the decision of Hon’ble Madhya Pradesh High Court in the case S. Goyanka Lime and Chemicals Ltd. (56 Taxmann.com 390). The revenue’s Special Leave Petition has been dismissed by Hon’ble Supreme Court which is reported as 64 Taxmann.com 313. In the said decision, Hon’ble High Court dismissed the appeal of the revenue by observing as under: - 7. We have considered the rival contentions and we find that while according sanction, the Joint Commissioner, Income Tax has only recorded so "Yes, I am satisfied". In the case of Arjun Singh (supra), the same question has been considered by a Coordinate Bench of this Court and the following principles are laid down:— 'The Commissioner acted, of course, mechanically in order to discharge his statutory obligation properly in the matter of recording sanction as he merely wrote on the format "Yes, I am satisfied" which indicates as if he was to sign only on the dotted line. Even otherwise also, the exercise is shown to have been performed in less than 24 hours of time which also goes to indicate that the Commissioner did not apply his mind at all while granting sanction. The satisfaction has to be with objectivity on objective material.' 8. If the case in hand is analysed on the basis of the aforesaid principle, the mechanical way of recording satisfaction by the Joint Commissioner, which accords sanction for issuing notice under section 148, is clearly unsustainable and we find that on such consideration both the appellate authorities have interfered into the matter. In doing so, no error has been committed warranting reconsideration.
As far as explanation to Section 151, brought into force by Finance Act, 2008 is concerned, the same only pertains to issuance of notice and not with regard to the manner of recording satisfaction. That being so, the said amended provision does not help the revenue.
In view of the concurrent findings recorded by the learned appellate authorities and the law laid down in the case of Arjun Singh (supra), we see no question of law involved in the matter, warranting reconsideration.
The appeals are, therefore, dismissed.
In the present appeal, it is quite evident from ‘form for recording the reasons for initiating proceedings u/s 147 for obtaining the satisfaction of the Pr. CIT, Aligarh’ as kept on Page nos.25/1 & 25/2 that the said satisfaction has been recorded by approving authority in similar manner. Apparently, there is no application of mind while according the approval for reopening the case of the assessee and the approval has been given in a mechanical manner. This being the case, respectfully following the aforesaid binding judicial precedent, we quash the assessment proceedings. The other grounds have been rendered merel academic in nature.
The appeal sand allowed in terms of our above order. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963. (SATBEER SINGH GODARA) (MANOJ KUMAR AGGARWAL) "ाियक सद" /JUDICIAL MEMBER लेखा सद" / ACCOUNTANT MEMBER Dated: 28-03-2025 आदेश की "ितिलिप अ"ेिषत / Copy of the Order forwarded to : 1. अपीलाथ"/Appellant 2. ""थ"/Respondent 3. आयकरआयु"/CIT 4. िवभागीय"ितिनिध/DR 5. गाड"फाईल/GF