Kailash Bansal Vs ITO (ITAT Delhi)
The Delhi ITAT quashed the reassessment proceedings initiated under sections 147/148, holding that the mandatory approval under section 151 was granted in a mechanical manner without independent application of mind. The Tribunal noted that the Principal CIT merely affixed a rubber stamp stating “Yes, I am satisfied”, despite a glaring mismatch between the alleged escaped income mentioned in the approval (₹81.34 lakh) and that recorded in the reasons for reopening (₹1.03 crore).
Relying on the Delhi High Court’s decisions in Capital Broadways (P.) Ltd. and Vinod Kumar Solanki, as well as the coordinate bench ruling in Sandhya Sharma v. ACIT, the Tribunal held that a mere endorsement such as “Yes, I am satisfied” does not satisfy the statutory requirement of approval under section 151, as it fails to demonstrate independent consideration of the material by the sanctioning authority.
Holding that the sanction under section 151 was invalid, the Tribunal declared the notice issued under section 148 and the consequent reassessment proceedings to be void in law. Since the reassessment itself was quashed on the jurisdictional issue, the Tribunal did not examine the additions on merits. The assessee’s appeal was allowed
Cases Discussed
- Capital Broadways (P) Ltd. v. ITO (Delhi HC), 301 Taxman 506 (Del) dated 3.10.2024
- Sandhya Sharma v. ACIT, ITA No. 2019/D/2022
- Vinod Kumar Solanki vs. ACIT (Delhi HC), WP (C) 4196/2022, order dated 14.08.2024
- PCIT vs. Kamal Kapoor (Delhi HC), ITA 14/2024 dated 06.03.2024
- DCIT v. CDS Infra Projects Ltd., ITA No. 1445/D/2023
- Central India Electric Supply Co. Ltd. vs. ITO (Delhi HC), 333 ITR 237
- Meenakshi Overseas Pvt Ltd (citation not provided)
- Experion Developers (P) Ltd. (citation not provided)
- Pioneer Town Planners P Ltd (citation not provided)
FULL TEXT OF THE ORDER OF ITAT DELHI
