Essen Marketing Pvt. Ltd. Vs ITO (ITAT Kolkata)
Mechanical “Yes, I Am Satisfied” Approval Sinks Reopening — 148 Notice & Reassessment Quashed
Kolkata ITAT quashed the reassessment of Essen Marketing Pvt. Ltd. for AY 2012-13 after holding that the mandatory sanction u/s 151 for reopening was granted in a purely mechanical manner. The reassessment was initiated by issuing notice u/s 148 dated 27-03-2019, based on approval of the PCIT, Kolkata-3, who merely recorded the words “Yes, I am satisfied” without any independent reasoning or application of mind.
The Tribunal held that such rubber-stamp approval does not meet the statutory requirement of Section 151, particularly where reopening is beyond four years. Relying extensively on binding precedents including Capital Broadways Pvt. Ltd. vs ITO (Delhi HC), N.C. Cables Ltd., Chhugamal Rajpal (SC), S. Goyanka Lime & Chemicals Ltd. (MP HC, SLP dismissed by SC), and allied rulings, the Tribunal observed that satisfaction of the approving authority must be discernible from the record and cannot be a ritualistic formality.
Since the very foundation of reopening was invalid, the notice u/s 148 and the consequent assessment framed u/s 144 r/w s.147 were held to be unsustainable in law and were quashed in entirety. The Assessee’s appeal was accordingly allowed
FULL TEXT OF THE ORDER OF ITAT KOLKATA
