INCOME TAX ACT, 1961

Section 147 Section 148 Section 151

Reassessment - Validity of notice under section 148 - Approval of competent authority without application of mind -

Reopening of assessee's assessment framed under section 143 was made under section 147 after issuing notice under section 148. The assessee was aggrieved on several counts, i.e., the approval under section 151 was issued, as per assessee, in mechanical manner and without application of mind. CIT(A) allowed assessee's objection raised under section 151. Held: The Pr. CIT, had accorded approval for issuing notice under section 148 in a very routine, mechanical manner and without application of mind by simply putting her signatures below the rubber stamped 'Yes, satisfied'. Such mechanical approval does not fulfill the mandate of provisions of section 151(1). Notice issued under section 148 on the basis of such approval was bad in law and deserves to be quashed. Approval had been accorded by the Pr. CIT, simply for verifying the transactions mentioned in the letter of DDIT (Inv.), Kolkata received by the Asstt. CIT, Bhilwara. There was no whisper of applicability of proviso in the reasons recorded by the AO and approved by the Pr. CIT. If she had read over the reasons and applied her mind she must not have accorded the permission under such circumstances in absence of any cogent material at all. The approval was granted by Pr. CIT clearly without application of mind and was not as per the mandate of the provision of section 151. The notice issued under section 148 on the basis of such approval and consequent assessment made on the basis of such notice were bad in law and deserve to be quashed.

Relied:Chuggamal Rajpal v. SP Chaliha (1971) 79 ITR 603 (SC) : 1971 TaxPub(DT) 314 (SC), United Electrical Co. (P) Ltd. CIT (2002) 258 ITR 317 (Del) : 2002 TAxPub(DT) 1670 (Del-HC), Delhi High Court in its judgment dated 11-1-2017 ITA No. 335/2015 in the case of Pr. CIT v. N.C, ?Cables Ltd. and ITAT, Delhi in its decisiond dated 24-10-2017 in ITA No. 450/Del/2014 in the case of Metro Decorative (P) Ltd. v. ITO.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2010-11 & 2011-12

INCOME TAX ACT, 1961

Section 147, Proviso Section 148

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