Loading judgment…
Facts
The assessee, an advocate, filed her return of income, and the AO initiated reassessment proceedings under Section 148 for Assessment Years 2012-13 to 2015-16 based on information regarding bank deposits and notional house property income. Additions were made under Section 68 and for notional income. The CIT(A) partly allowed the appeal, reducing the additions. The assessee challenged the legality of the reassessment proceedings before the Tribunal, specifically questioning the mechanical approval granted by the Pr.CIT under Section 151 of the Income Tax Act, 1961.
Held
The Tribunal found that the Pr.CIT granted approval for the reassessment mechanically by simply recording 'Yes, as per O/s.' or similar non-reasoned endorsements, without proper application of mind, for both the individual and multiple other cases. Relying on Supreme Court and High Court precedents, the Tribunal held that such mechanical approval under Section 151 renders the reassessment proceedings invalid. Consequently, the reassessment proceedings initiated under Section 147 and the subsequent assessment orders were quashed for all relevant assessment years (2012-13, 2013-14, 2014-15 & 2015-16).
Key Issues
Whether the reassessment proceedings initiated under Section 147/148 were valid when the approval by the Principal Commissioner of Income Tax (Pr.CIT) under Section 151 was granted mechanically, without proper application of mind.
Sections Cited
250, 148, 147, 68, 144B, 151A, 234A, 234B, 234C, 151, 143(3), 150, 147(b), 150(1), 150(2), 148A(d)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI “G” BENCH: NEW DELHI
Before: SHRI ANUBHAV SHARMA & SHRI MANISH AGARWAL
, 1434, 1433 & 1432/Del/2024 ITA Nos. Sr. CIT(A) Order Assessment Assessment Order Nos. dated Order dated under section 1 28.12.2019 CIT(A), NFAC, 144 r.w.s. 147 of the [Assessment Year 2012-13] Delhi order dated Income Tax Act, 30.01.2024 1961.
The issues being common, interlinked and related to the same assessee for Assessment Years 2012-13 to 2015-16 therefore, all these appeals by the assessee have been heard together and accordingly, adjudicated by a common order.
First we take appeal of the assessee in [Assessment Year 2012-13].
[Assessment Year 2012-13] 4. Brief facts of the case are that the assessee is an individual, engaged in the profession of advocate, filed her return of income, declaring income of INR 46,39,180/-. Based on the information received from ITO, Investigation Wing, Unit-4, New Delhi ,the AO initiated re-assessment proceedings by issue of notice u/s 148 of the Act on 20.03.2019. Thereafter, various notices were issued however, no any notice was complied with therefore, the final show cause notice was issued on 18.11.2019. In response, the assessee in terms of the mail dated 19.11.2019 requested for the further time however, looking to the time bearing limits, AO proceeded to , 1434, 1433 & 1432/Del/2024 complete the reassessment proceedings on the basis of the material available on record and accordingly, total income was assessed at INR 2,56,99,540/- by making addition of INR 1,75,59,728/- u/s 68 of the Act towards the deposits in the bank accounts and further addition of INR 35.00 Lakhs was made as notional income from house property.
Against the said order, assessee preferred appeal before Ld.CIT(A) who vide impugned order dated 30.01.2024, after considering the submissions made by the assessee, partly allowed the appeal of the assessee wherein amount of notional income of house property was reduced to some extent and also the addition u/s 68 of the Act was reduced to INR 91,34,728/- as against addition of INR 1,75,59,728/- made by the AO.
Aggrieved by the order of Ld.CIT(A), assessee is in appeal before the Tribunal wherein assessee has taken many grounds of appeal which were filed in concise manner in terms of the directions of Co-ordinate Bench. The concise grounds as filed by the assessee in terms of the letter dated 09.12.2024 are as under:-
“That having regard to the facts and circumstances of the case, assumption of jurisdiction in initiating the proceedings u/s 147 and passing the impugned order u/s 147/144B and that too without complying with mandatory conditions u/s 147 to 151A as envisaged under the Income Tax Act, 1961, is bad in law and against the facts and circumstances of the case.
2. That in any case and in any view of the matter, assumption of jurisdiction u/s 147 and passing the impugned order u/s 147/144B, is illegal, bad in law and against the facts and , 1434, 1433 & 1432/Del/2024 circumstances of the case and the same is not sustainable on legal and factual grounds.
3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in sustaining the action of Ld. AO to the tune of Rs. 91,34,728/- on account of cash credit in bank account u/s 68 and that too by recording incorrect facts and findings and without considering the submissions and evidences filed by the assessee and in violation of principles of natural justice.
That in any case and in any view of the matter, action of Ld. CIT(A) in sustaining the action of Ld. AO to the tune of Rs. 91,34,728/- on account of cash credit in bank account u/s 68 is bad in law and against the facts and circumstances of the case and the same is not sustainable on various legal and factual grounds.
5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in sustaining the action of Ld. AO to the tune of Rs. 14,00,000/- on account of notional house property income and that too by recording incorrect facts and findings and without considering the submissions and evidences filed by the assessee and in violation of principles of natural justice.
6. That in any case and in any view of the matter, action of Ld. CIT(A in sustaining the action of Ld. AO to the tune of Rs. 14,00,000/- on account of notional house property income is bad in law and against the facts and circumstances of the case and the same is not sustainable on various legal and factual grounds.
That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in charging interest u/s 234A, 234B and 234C of Income Tax Act, 1961.
8. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.”
Ground of appeal Nos.1 & 2 are with respect to the initiation 7. of re-assessment proceedings u/s 148 of the Act which as per assessee is bad in law since the mandatory conditions prescribed u/s 151 of the Act were not followed.
Heard the contentions of both the parties and perused the material available on record. It was the submission of the assessee Page | 4 , 1434, 1433 & 1432/Del/2024 that the case of the assessee was re-opened after the expiry of four Assessment Years and the approval was granted by Pr.CIT, New Delhi-21 is without application of mind and was given in mechanical manner for which our attention was invited to page 304 to 305 of the paper book filed by the assessee which is the approval memo for re-opening the assessment, the same is reproduced as under:-
From the perusal of the above, it could be seen that Pr.CIT while granting approval, has stated that “Yes, as per O/s.”. This clearly shows that Ld. Pr.CIT has simply given his consent on the material forwarded by the lower authorities without even looking into the facts as the detailed reasons alongwith the approval was sent for his approval on 25.03.2019 and the permission was given on the very next day i.e. 26.03.2019.
It is further seen that Ld. Pr.CIT has recorded satisfaction by simply observing “Yes, as per O/s.” This approval was mechanical approval and no proper satisfaction was recorded.
, 1434, 1433 & 1432/Del/2024 11. The Hon’ble Supreme Court in case of CIT vs. S. Goyanka Lime & Chemical Ltd. – (2015) 64 taxmann.com 313 (SC) examined the identical issue as to according the sanction for reopening the assessment u/s 148 of the Act by merely recording “Yes. I am satisfied”. And held that reopening on the basis of mechanical sanction is invalid by returning following findings :-
Section 151, read with section 148 of the Income-tax Act,1961 - Income escaping assessment - Sanction for issue of notice (Recording of satisfaction) - High Court by impugned order held that where Joint Commissioner recorded satisfaction in mechanical manner and without application of mind to accord sanction for issuing notice under. section 148, reopening of assessment was invalid - Whether Special Leave Petition filed against impugned order was to be dismissed - Held, yes [In favour of assessee] Search and Seizure-Procedure for black Assessment- Search was conducted at residential and business premises of Assessee and notice for block assessment u/s. 158-BC was issued- For block period, returns were filed that were processed u/s. 143 (1)- However, notice u/s. 148 was issued by AO, on basis of certain reasons recorded- Assessee objected to same before AO, that was rejected and assessment was completed u/ss. 143(3) and 147-CIT(A) found that reason recorded by Joint Commissioner of Income Tax, for according sanction, was merely recording ‘I am Satisfied'-Action for sanction was alleged to be without application of mind and to be done in mechanical manner-Held, while according sanction, Joint Commissioner, Income Tax only recorded Yes, I am satisfied"-Mechanical way of recording satisfaction by Joint Commissioner, that accorded sanction for issuing notice u/s. 147, was clearly unsustainable-On such consideration, both Appellate authorities interfered into matter- o error was committed warranting reconsideration-As far as explanation to S. 151, brought into force by Finance Act, 2008 was concerned, same only pertained to issuance of notice and not with regard to manner of recording satisfaction-Amended provision did not help Revenue-No question of law involved in matter, that warranted reconsideration- Revenue's Appeals dismissed.”
12. Hon’ble High Court of Delhi in case cited as SABH Infrastructure Ltd. vs. ACIT in WP (C) 1357/2016 order dated , 1434, 1433 & 1432/Del/2024 25.09.2017 has issued guidelines to the Revenue authorities while deciding the issue of reopening u/s 147/148 of the Act. Operative part of which is reproduced as under:-
19. Before parting with the case, the Court would like to observe that on a routine basis, a large number of writ petitions are filed challenging the reopening of assessments by the Revenue under Sections 147 and 148 of the Act and despite numerous judgments on this issue, the same errors are repeated by the concerned Revenue authorities. In this background, the Court would like the Revenue to adhere to the following guidelines in matters of reopening of assessments: (i) while communicating the reasons for reopening the assessment, the copy of the standard form used by the AO for obtaining the approval of the Superior Officer should itself be provided to the Assessee. This would contain the comment or endorsement of the Superior Officer with his name, designation and date. In other words, merely stating the reasons in a letter addressed by the AO to the Assessee is to be avoided; (ii) the reasons to believe ought to spell out all the reasons and grounds available with the AO for reopening the assessment - especially in those cases where the first proviso to Section 147 is attracted. The reasons to believe ought to also paraphrase any investigation report which may form the basis of the reasons and any enquiry conducted by the AO on the same and if so, the conclusions thereof; (iii) where the reasons make a reference to another document, whether as a letter or report, such document and/ or relevant portions of such report should be enclosed along with the reasons; (iv) the exercise of considering the Assessee’s objections to the reopening of assessment is not a mechanical ritual. It is a quasi- judicial function. The order disposing of the objections should deal with each objection and give proper reasons for the conclusion. No attempt should be made to add to the reasons for reopening of the assessment beyond what has already been disclosed.
13. The Hon'ble Delhi High Court in the case of CIT vs N.C. Cables Ltd. (supra) has observed as under:-
, 1434, 1433 & 1432/Del/2024 "Reassessment-Issuance of Notice-Sanction for issue of Notice- Assessee had in its return for A Y 2001-02 claimed that sum of Rs. 1 Crore was received towards share application amounts and a further sum of Thirty Five Lakhs was credited to it as an advance towards loan-Original assessment was completed u/s 143(3)- However, pursuant to reassessment notice, which was dropped due to technical reasons, and later notice was issued and assessments were taken up afresh-After considering submissions of assessee and documents produced in reassessment proceedings, AO added back a sum of Rs.1,35,00,000/- - CIT(A) held against assessee an legality of reassessment notice but allowed assessee's appeal on merits holding that AO did not conduct appropriate enquiry to conclude that share inclusion and advance received were from bogus entities-Tribunal allowed assessee's appeal on merits- Revenue appealed against appellate order on merits- Assessee's cross appeal was on correctness of reopening of assessment- Tribunal upheld, assessee's cross- objections and dismissed Revenue's appeal holding that there was no proper application of mind by concerned sanctioning authority u/s Section 151 as a pre-condition for issuing notice u/s 147/148-Held, Section 151 stipulates that CIT (A), who was competent authority to authorize reassessment notice, had to apply his mind and form opinion-Mere appending of expression 'approved' says nothing-It was not as if CIT (A) had to record elaborate reasons for agreeing with noting put up-At same time, satisfaction had to be recorded of given case which could be reflected in briefest possible manner-In present case, exercise appears to have been ritualistic and formal rather than meaningful, which was rationale for safeguard of approval by higher ranking officer-Revenue's appeal dismissed."
14. Further, reliance placed in the judgement of Hon’ble Bombay High Court in the case of Saraswat CO-operative Bank Ltd. vs ACIT & Others [2025] 473 ITR 205 (Bom.) wherein Hon’ble Bombay High Court has held as under:- Sanction mechanism under section 151 21. Evidently, the reassessment was first proposed internally on March 24, 2021 by the jurisdictional Assessing Officer, and was recommended by a Range Officer on March 25, 2021, and approved by the Principal Commissioner of Income-tax on the same day all under section 151 of the Act. Therefore, the reassessment has been contemplated and initiated one year after the expiry of four years from the end of the relevant assessment year d (2015-16). Therefore, failure by the petitioner to disclose material facts was a jurisdictional imperative, which was simply incapable of being discerned from the Page | 10 , 1434, 1433 & 1432/Del/2024 material on record. Therefore, we have no hesitation in holding that the Revenue's bid to initiate reassessment is unfounded and in direct conflict with section 147 of the Act. Therefore, the sanction for reassessment under section 151 could simply not have been given.
22. The requirement for sanction by a high-ranking official under section 151, is an inherent check and balance in the statutory scheme of the Act. Such officers are expected to apply their mind to the facts and the applicable law and then accord sanction. In the instant case, the proposed reassessment was sanctioned by the Principal Commissioner of Income-tax, with the following remarks: "Yes, I am satisfied with the reasons recorded by the Assessing Officer for issuance of notice under section 148 of the Income- tax Act, 1961." (emphasis¹ supplied) 23. The power to sanction reassessment under section 151, is coupled with a duty to exercise such power reasonably, and not arbitrarily. It is trite law that absence of valid reasons constitutes arbitrariness. In the instant case, the entire process of according sanction demonstrates non-applica-tion of mind to the ingredients of section 147, rendering the sanction to be h arbitrary, calling for intervention by a writ court. Evidently, the proposal, the recommendation and the approval in the instant case was mechanical, without either application of mind to the law and the facts or even a modi-cum of how the ingredients of the law had been met. In short, the machinery under section 151 completely failed.
The imperative requirement of compliance with the ingredients of section 147 and section 148 is underlined in innumerable judgments. How-ever, we note with respect and approval, a judgment of a Division Bench of this court cited on behalf of the petitioner, in the case of Hindustan Lever Ltd. v. R. B. Wadkar (per V. C. Daga and J. P. Devadhar JJ.), and profitably extract the following (page 337 of 268 ITR): "Reading of the proviso to section 147 makes it clear that if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceeding under section 147, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the concerned assessment year. However, where an assessment under sub-section (3) of section 143 has been made for the relevant assessment year, no action can be taken under section 147 after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has Page | 11 , 1434, 1433 & 1432/Del/2024 escaped assessment for such assessment year by reasons of the failure on the part of the assessee to disclose all material facts necessary for his assessment for that assessment year. In the case in hand it is not in dispute that the assessment year involved is 1996-97. The last date of the said assessment year was March 31, 1997 and from that date if four years are counted, the period of four years expired on March 31, 2001. The notice issued is dated November 5, 2002 and received by the assessee on November 7, 2002. Under these circumstances, the notice is clearly beyond the period of four years. The reasons recorded by the Assessing Officer nowhere state that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of that assessment year. It is needless to mention that the reasons are required to be read as they were recorded by the Assessing Officer. No substitution or deletion is permissible. No additions can be made to those reasons. No inference can be allowed to be drawn based on reasons not recorded. It is for the Assessing Officer to disclose and open his mind through reasons recorded by him. He has to speak through his reasons. It is for the Assessing Officer to reach to the conclusion as to whether there was failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the concerned assessment year. It is for the Assessing Officer to form his opinion. It is for him to put his opinion on record in black and white. The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. Reasons are the manifestation of mind of the Assessing Officer. The reasons recorded should be self- explanatory and should not keep the assessee guessing for the reasons. Reasons provide link between conclusion and evidence. The reasons recorded must be based on evidence. The Assessing Officer, in the event of challenge to the reasons must be able to justify the same based on material available on record. He must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish vital link between the reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. The reasons recorded by the Assessing Officer cannot be supplemented by filing affidavit or making oral submission, otherwise, the reasons which were lacking in the material particulars would get supplemented, by the time the matter reaches to the court, on the strength of the affidavit or oral submissions advanced.
, 1434, 1433 & 1432/Del/2024 Having recorded our finding that the impugned notice itself is beyond the period of four years from the end of the assessment year 1996-97 and does not comply with the requirements of the proviso to section 147 of the Act, the Assessing Officer had no jurisdiction to reopen the assessment proceedings which were concluded on the basis of assessment under section 143(3) of the Act. On this short count alone the impugned notice is liable to be quashed and set aside." (emphasis¹ supplied) 25. Having regard to the foregoing and in view of the findings returned by us, the writ petition deserves to be allowed in the following terms: "(A) The order dated March 25, 2021 sanctioning the reassessment under section 151 of the Act; the impugned notice dated March 30, 2021 issued under section 148 of the Act; the impugned order dated February 25, 2022 rejecting the objections raised by the petitioner are declared to be arbitrary and devoid of valid reasons and, therefore, illegal; (B) Consequently, the order dated March 25, 2021 sanctioning the reassessment under section 151 of the Act; the impugned notice dated March 30, 2021 issued under section 148 of the Act; the impugned order dated February 25, 2022 and all consequential proceedings in respect of the reassessment are hereby quashed and set aside."
Rule is made absolute in the aforesaid terms, and the writ petition is disposed of accordingly. There shall be no order as to costs.”
15. Further, reliance placed in the judgement of Hon’ble Delhi High Court in the case of SBC Minerals Pvt.Ltd. vs ACIT [2025] 475 ITR 360 (Del.) wherein Hon’ble Delhi High Court has held as under:- 10. “Before considering the merits of the contentions of the parties, it would be apposite to examine the relevant legal framework. 11. Section 151 of the Act, as it stood prior to the substitution by Act 13 of 2001 is reproduced hereunder: "151. Sanction for issue of notice.-(1) No notice shall be issued under section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is Page | 13 , 1434, 1433 & 1432/Del/2024 satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice. (2) In a case other than a case falling under sub-section (1), no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of Joint Commissioner, 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. (3) For the purposes of sub-section (1) and sub-section (2), the Principal Chief Commissioner or the Chief Commissioner or the g Principal Commissioner or the Commissioner or the Joint Commissioner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice under section 148, need not issue such notice himself."
A plain reading of the aforesaid provision clearly indicates that the prescribed authority must be "satisfied", on the reasons recorded by the Assessing Officer ("AO"), that it is a fit case for the issuance of such notice. Thus, the satisfaction of the prescribed authority is a sine qua non for a valid approval.
It is trite law that the grant of approval is neither an empty formality nor a mechanical exercise. The competent authority must apply its mind independently on the basis of material placed before it before grant of sanction.
A perusal of the record reveals that the request for approval under section 151 of the Act in a printed format was placed before the Principal Chief Commissioner of Income-tax ("PCCIT") on March 20, 2023. The Principal Chief Commissioner of Income-tax granted the approval the same day. The approval accorded by the Principal Chief Commissioner of Income-tax in column 22 is extracted below:
22 Reasons for according Remarks: Approved under approval/rejection by the section 148A(d) as a fit case. specified authority to order Name: Rajat Bansal under section 148A(d) and/or Designation :PCCIT, Delhi issuance of notice under Date-20.03.2023 section 148 of the Income-tax Act, 1961?
It is evident that the approval order is bereft of any reasons. It does not even refer to any material that may have weighed in the grant of approval. The mere appending of the word "approved" by the Principal Chief Commissioner of Income-tax while granting approval under section 151 to the reopening under section 148 is not enough. Page | 14 , 1434, 1433 & 1432/Del/2024 While the Principal Chief Commissioner of Income-tax is not required to record elaborate reasons, he has to record satisfaction after application of mind. The approval is f a safeguard and has to be meaningful and not merely ritualistic or formal. The reasons are the link between material placed on record and the conclusion reached by the authority in respect of an issue, since they help in discerning the manner in which the conclusion is reached by the concerned authority. Our opinion in this regard is fortified by the decision of the apex court in Union of India v. Mohan Lal Capoor. The grant of approval by the Principal Chief Commissioner of Income-tax in the printed format without any line of reason does not fulfil the requirement of section 151 of the Act.
16. We note that dealing with an identical challenge of approval having been accorded mechanically and without due application of mind had arisen for our consideration in the case of the Pr. CIT v. Pioneer Town Planners Pvt. Ltd., wherein, we had held as follows (page 361 of 465 ITR): "13. The primary grievance raised in the instant appeal relates to the manner of recording the approval granted by the prescribed authority under section 151 of the Act for reopening of assessment proceedings as per section 148 of the Act.
Thus, the incidental question which emanates at this juncture is whether simply penning down 'Yes' would suffice requisite satisfaction as per section 151 of the Act. Reference can be drawn from the decision of this court in Pr. CIT v. N. C. Cables Ltd.¹, wherein, the usage of the expression 'approved was considered to be merely ritualistic and formal rather than meaningful. The relevant paragraph of the said decision reads as under (page 17 of 391 ITR): '11. Section 151 of the Act clearly stipulates that the Commissioner of Income-tax (Appeals), who is the competent authority to authorise the reassessment notice, has to apply his mind and form an opinion. The mere appending of the expression "approved" says nothing. It is not as if the Commissioner of Income-tax (Appeals) has to record elaborate reasons for agreeing with the noting put up. At the same time, satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner. In the present case, the exercise appears to have been ritualistic and formal rather than meaningful, which is the rationale for the safeguard of an approval by a higher ranking officer. For these reasons, the court is satisfied that the findings by the Income-tax Appellate Tribunal cannot be disturbed.' 18. Further, this court in the case of Central India Electric Supply Co. Ltd. v. ITO has taken a view that merely rubber stamping of 'Yes' Page | 15 , 1434, 1433 & 1432/Del/2024 would suggest that the decision was taken in a mechanical manner. Paragraph 19 of the said decision is reproduced as under (page 245 of 333 ITR): 'In respect of the first plea, if the judgments in Chhugamal Rajpal v. S. P. Chaliha, Chanchal Kumar Chatterjee v. ITO and Govinda Choudhury and Sons v. ITO are examined, the absence of reasons by the Assessing Officer does not exist. This is so as along with the pro-forma, reasons set out by the Assessing Officer were, in fact, given. However, in the instant case, the manner in which the proforma was stamped amounting to approval by the Board leaves much to be desired. It is a case where literally a mere stamp is affixed. It is signed by an Under Secretary underneath a stamped Yes against the column which queried as to whether the approval of the Board had been taken. Rubber stamping of underlying material is hardly a process which can get the imprimatur of this court as it suggests that the decision has been taken in a mechanical manner. Even if the reasoning set out by the Income-tax Officer was to be agreed upon, the least which is expected is that an appropriate endorsement is made in this behalf set-ting out brief reasons. Reasons are the link between the material placed on record and the conclusion reached by an authority in respect of an issue, since they help in discerning the manner in which conclusion is reached by the concerned authority. Our opinion is fortified by the decision of the apex court in Union of India v. Mohan Lal Capoor¹ wherein it was observed as under: "27. We find considerable force in the submission made on behalf of the respondents that the 'rubber stamp' reason given mechanically for the supersession of each officer does not amount to 'reasons for the proposed supersession'. The most that could be said for the stock reason is that it is a general description of the process adopted in arriving at a conclusion.
If that had been done, facts on service records of officers considered by the Selection Committee would have been correlated to the conclusions reached. Reasons are the links between the materials on which certain conclusions are based and the actual conclusions. They disclose how the mind is applied to the subject-matter for a decision whether it is purely administrative or quasi-judicial. They should reveal a rational nexus between the facts considered and the conclusions reached. Only in this way can opinions or decisions recorded be shown to be manifestly just and reasonable." (emphasis supplied)' 19. In the case of Chhugamal Rajpal v. S. P. Chaliha³, the hon'ble Supreme Court refused to consider the affixing of signature along with , 1434, 1433 & 1432/Del/2024 the noting Yes' as valid approval and had held as under (page 608 of 79 ITR): 'Further the report submitted by him under section 151(2) does not mention any reason for coming to the conclusion that it is a fit case for the issue of a notice under section 148. We are also of the opinion that the Commissioner has mechanically accorded permission. He did not himself record that he was satisfied that this was a fit case for the issue of a notice under section 148. To question 8 in the report which reads "whether the Commissioner is satisfied that it is a fit case for the issue of notice under section 148", he just noted the b word "yes" and affixed his signatures thereunder. We are of the opinion that if only he had read the report carefully, he could never have come to the conclusion on the material before him that this is a fit case to issue notice under section 148. The important safeguards provided in sections 147 and 151 were lightly treated by the Income-tax Officer as well as by the Commissioner. Both of them appear to have taken the duty imposed on them under those provisions as of little importance. They have substituted the form for the substance.' 20. This court, while following Chhugamal Rajpal v. S. P. Chaliha in the case of Ess Advertising (Mauritius) S. N. C. Et Compagnie v. Asst. CIT (International Taxation), wherein, while granting the approval, the Assistant Commissioner of Income-tax has written: This is fit case for issue of notice under section 148 of the Income-tax Act, 1961. Approved, had held that the said approval would only amount to endorsement of language used in section 151 of the Act and would not reflect any independent application of mind. Thus, the same was considered to be flawed in law.”
In view of the above facts and by respectfully following judicial pronouncements cited above), in our considered opinion the approval given by ld. PCIT is not in accordance with the provisions of section 151 of the Act. The ld. PCIT has simply observed in column 13 of the Performa that ““Yes, as per O/s.” however, the O/s probably refer the order sheet but no such order sheet is placed before us for this year. From the perusal of the order sheet entries for other assessment years as available in paper book pages 405-408 filed by the assessee, in the said order sheet entry , 1434, 1433 & 1432/Del/2024 approval for more than 111 cases was given by single order sheet entry. This clearly established that the approval was accorded by the ld. PCIT without going further on the merits of the issues stated in the reasons recorded and therefore, such approval is with any independent application of mind was granted in mechanical manner thus, we hold the re-assessment proceedings initiated based on such approval as bad in law and consequent notice u/s 148 is hereby quashed. Accordingly, Ground of appeal Nos. 1 & 2 raised by the assessee are allowed.
17. Since we have already allowed legal Grounds of appeal Nos.1 & 2, the other grounds raised by the assessee become academic and thus not adjudicated.
In the result, appeal of the assessee is allowed.
, 1433 & 1432/Del/2024 [Assessment Year : 2013-14, 2014-15 & 2015-16]
IN all these years in the concise grounds of appeal, in Grounds of appeal Nos. 1& 2 assessee has challenged the legality of the reassessment proceedings being initiated without following the due procedure as provided in section 151 of the Act, thus all these are appeals are taken together and decided as under.
It is seen that for these years, Ld. Pr.CIT has granted the approval for reopening the assessment which could be seen from the copy of order sheet entry and the approval memo available at Paper Book for AY 2012-13 at page 405 to 407 that common Page | 18 , 1434, 1433 & 1432/Del/2024 approval is given by Ld. Pr. CIT for as many as 111 cases where name of the assessee is appearing at Sl.No.62 for AY 2014-15, Sl.No.68 for AY 2013-14 and again at Sl.No.79 for AY 2014-15. It is further seen that while granting approval in the order sheet, Ld. Pr. CIT observed that “on careful perusal of information received, relevant details/evidences submitted and reasons recorded by the AO, the cases from Sl.No.1 to 111 as listed in the Annexure enclosed appear prima-facie to be fit case for action u/s 147 r.w.s. 148 of the Income Tax Act, 1961”. Further in all the 111 cases, the letter for approval were sent by the respective AOs to Ld. Pr. CIT on 27 & 28.03.2021 and on the very same day, the approvals were granted for all the cases for AY 2013-14 and AY 2014-15.
Further, from the perusal of the Performa of the approval available at page 408 of the Paper Book for AY 2012-13 filed by the assessee, it is seen that Ld. Pr. CIT had simply observed “that as per proposal above, prima-facie it appears to be fit case for action u/s 147 of the Act 1961” and this observations remained unsigned. The relevant copies of the order sheet entries and approvals of approval are as under:-
It is further seen from the copy of order sheet available at pages 405 to 407 of the paper book for AY 2012-13 , as reproduced above, in the case of assessee, the approval for AY 2014-15 was granted twice at S.No. 62 & 79 and for AY 2013-14 at S.No. 68 however, no approval was available for AY 2015-16 by Ld. Pr.CIT. This further established the fact that the approval in the case of the assessee was given in a mechanical manner and approval for multiple assesses was given by a single order thus, Ld. Pr. CIT has not applied his mind while granting the approval for re-opening of the assessment. In view of these facts and placing reliance on the judgement of Hon’ble Supreme Court in the case of CIT vs. S. Goyanka Lime & Chemical Ltd. (supra) and further Hon’ble Jurisdictional High Court as referred above in assessee’s appeal for AY 2012-13 in we have no hesitation in holding that the approval granted by Ld. Pr. CIT is without application of mind and was granted in mechanical manner therefore, the reassessment proceedings initiated u/s 147 of the Act and the consequent re-assessment order passed u/s 147 r.w.s. 143(3) for all the three assessment years i.e. for AY 2013-14, AY 2014-15 and AY 2015-16 are hereby, quashed. The grounds of appeals Nos. 1 & 2 for all these three years are thus allowed.
23. Since we have allowed the legal grounds raised
by the assessee, other grounds of appeal become academic and thus not adjudicated. , 1434, 1433 & 1432/Del/2024
24. In the combined result, all appeals of assessee in 1434, 1433 & 1432/Del/2024 [Assessment Years 2012-13, 2013-14, 2014-15 & 2015-16] respectively, are allowed.