| The Tax Publishers2020 TaxPub(DT) 0302 (Del-Trib) INCOME TAX ACT, 1961
Section 263 Section 147
While reopening assessment under section 147/148 AO recording reason though came to conclusion that assessee had received accommodation entries approval granted under section 151 by competent authority was in mechanical manner being invalid and bad, the entire reassessment proceedings was quashed and as such proceedings under section 263 was not, however, rightly invoked by Pr.CIT.
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Revision under section 263 - Erroneous and prejudicial order - Inadequate enquiry - Provisions of section 263 applied on invalid reassessment order
In response to the statutory notice issued under section 148 and questionnaire issued by the AO, the assessee appeared from time to time before the AO and filed the requisite details which were examined and taken on record. The oral submissions of the assessee were also considered. The AO after examining the detailed evidences filed by assessee, accepted the return of income vide order under section 147/143(3). Pr. CIT held that AO passed the reassessment order without verification of the seized material. The reassessment order was set aside and AO was directed to frame the assessment afresh by conducting proper inquiries about the source of investment. Further, approval granted by competent authority for reopening the case as stated by assessee, was in mechanical manner under section 151. CIT(A) confirmed order of AO.Held: It is well settled law that since re-assessment proceedings were invalid and bad in law, therefore, such proceedings could not be revised under section 263. It was clear that the Addl. CIT and Pr. CIT while granting approval for reopening of the assessment under section 147/148 merely stated 'Yes', which would show that they have not applied their independent mind and merely accorded sanction without going through any material on record. Reopening of the assessment in this case was invalid, bad in law and therefore, such reassessment proceedings could not be reopened under section 263. The AO in the reasons recorded in the assessment order had mentioned that assessee had received accommodation entries in assessment year under appeal from five parties in a sum of Rs. 70 lakhs and after reopening of the assessment, AO called for the details and documents from the assessee and was satisfied with the explanation of assessee, therefore, the proceedings under section 263 by the Pr. CIT could not have substituted the view taken by the AO. Initiation of proceedings under section 263 were not justified. The same were bad in law and invalid. Accordingly, the order of the Pr. CIT passed under section 263 was, therefore, set aside and the same was quashed.
Followed:Supersonic Technologies Pvt. Ltd., Delhi v. Pr. CIT-8, New Delhi (2019) 69 ITR 585 (Del) : 2019 TaxPub(DT) 1030 (Del-Trib), Mukesh Chand Garg, New Delhi v. ITO, Ward-49(3), New Delhi in ITA No. 794/Del./2019, dated 7-10-2019 and Ganesh Ganga Investments Pvt. Ltd. v. ITO, Ward-10(1), New Delhi in ITA No. 1579/Del./2019, dated 7-11-2019.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2010-11
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