Case Law Details
Maheshwari Roller Flour Mills Pvt. Ltd. Vs ITO (ITAT Delhi)
Learned Counsel submitted that initiation under section 147 of the I.T. Act have been done by mentioning the wrong Section 147(b) of the I.T. Act which is deleted from the Income Tax Act w.e.f. 01.04.1989, therefore, reopening is done under non-existent Section in a mechanical manner without application of mind.
It is well settled Law that validity of re-assessment proceedings is to be determined on the basis of the reasons recorded for reopening of the assessment. The A.O. in the Form for recording the reasons for initiating the re-assessment under section 148 of the I.T. Act, 1961 has mentioned that “reopening have been done under section 147(b) of the I.T. Act as is reproduced above.” Further, such Section under section 147(b) of the I.T. Act have already been omitted from the Income Tax Act w.e.f. 01.04.1989. Learned Counsel for the Assessee further placed on record report of DIT (Inv.) Dated 12.03.2013 which is referred to in the reasons for reopening of the assessment in which A.O. has clearly suggested that the impugned amount is required to be taxed by initiating the proceedings under sections 147/148 of the I.T. Act, 1961. Thus, it was a borrowed satisfaction without applying independent mind by the A.O. to the relevant provision of Law and to the facts of the case. In the reasons also it is mentioned that assessee has received share capital/loan which fact is also incorrect. It is also a fact that assessee just after receipt of the amount in question has returned the amount in question because no shares have been issued in assessment year under appeal itself. Thus, assessee was not a beneficiary of any amount. Thus, the A.O. has mentioned wrong Section, wrong facts in the reasons for reopening of the assessment and has acted in a mechanical manner without application of mind. Similarly, the Senior Authorities while granting sanction under section 151 of the I.T. Act have not taken care that A.O. has mentioned wrong Section and wrong facts in the reasons for reopening of the assessment. An identical issue have been examined by ITAT, Delhi Bench in the case of VRC Township Pvt. Ltd., Delhi (supra) in which several decisions of High Court and Tribunal have been referred to on identical issue and reopening of the assessment have been quashed.
The form for recording reasons was also same in this case as is mentioned by the A.O. in the case of assessee. Thus, the issue is squarely covered in favour of the assessee by the aforesaid decision of the Delhi Tribunal in the case of VRC Township Pvt. Ltd., Delhi (supra). Following the reasons for the same, we set aside the Orders of the authorities below and quash the reopening of the assessment under section 147/148 of the I.T. Act. Resultantly, all additions stand deleted. In view of the above findings, the other grounds are left with academic discussion only. Accordingly, appeal of the Assessee allowed.
FULL TEXT OF THE ITAT JUDGEMENT
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