Case Law Details
Shri Ghanshyam Vs ITO (ITAT Agra)
In present case, the ld. Additional CIT granted the approval by observing merely that he was satisfied.
Sections 147 and 148 of the IT Act, it is trite, are charter to the Revenue to reopen completed assessments. Section 151 of the Act provides a safe-guard that the sword of section 147 of the Act may not be used unless the competent statutory officer is satisfied that the AO has good and adequate reasons to invoke the reopening provisions. As per the mandate of section 151 (2) of the Act, the Competent Authority has to examine the reasons, material or grounds on which the reopening is sought to be based and to judge as to whether they are sufficient and adequate to the formation of the necessary belief of escapement of income from taxation on the part of the AO. It is if and only if the Competent Authority, after applying his mind, is of the opinion that the AO’s belief is well reasoned and bonfide, that he will accord his sanction thereon.
In ‘Narayanappa’ (supra), it has been held that the stage for obtaining the sanction of the Competent Authority is administrative in character and not quasi-judicial . However, in ‘Chhugamal Rajpal vs. S.P. Chaliha’, 79 ITR 603 (SC) (supra), it has been held that where the Commissioner, while granting the sanction just noted the word “Yes” and affixed his signature thereunder, he had only mechanically accorded permission, and that the important safe-guards provided in section 151 were lightly treated.
‘Narayanappa’ (supra) is dated 27.09.1966, whereas ‘Chhugamal’ (supra) was handed down on 21.01.1971. Both these judgments have been rendered by co-equal Benches of the Hon’ble Apex Court. Now, it is well settled that in such a situation, the judgment of the Hon’ble Supreme Court, which is later in point of time has to be followed.
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