INCOME TAX ACT, 1961

Section 147 Section 151

Reassessment - Validity - Assessee pleading mechanical approval granted by Pr. CIT - Sanction granted by Pr. CIT was based on the reasons recorded by AO and not merely on proposal sent by AO

Assessee an individual not filed return of income under section 139. AO received information from AIR/Investigation which revealed the fact that assessee having made cash deposit of Rs. 9 lakhs in his savings bank account which was more than threshold limit of income assessable to tax. Accordingly, AO issued notice under section 148 after recording the reasons which were approved by competent authority under section 151. Assessee challenged this by pleading that mechanical approval was granted by Pr. CIT. Held: It was not a simple case of information regarding deposit of cash in the bank account but investigation wing had conducted proper enquiry on the source of deposit and only after response/reply of assessee was considered, said information was sent to AO for taking appropriate action. Therefore, AO was having tangible material to form a belief that income assessable to tax has escaped assessment. AO sent the proposal in performa for approval/sanction of Pr. CIT which contained details, including reasons recorded by AO and once reasons recorded by AO were found to be having a direct nexus with information and formation of belief that income assessable to tax had escaped assessment, then Pr. CIT was not required to give separate reasons for his satisfaction. Accordingly, there was no merit in assessee's plea.

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2009-10

INCOME TAX ACT, 1961

Section 68

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