Natraj Products Vs ITO (ITAT Delhi)
ITAT Delhi held that the issuance of notice u/s. 148 based on cryptic reasons combined with a mechanical approval of the Pr.CIT u/s. 151 of the Income Tax Act do not pass the test of judicial scrutiny. Thus, reassessment quashed.
Facts- The assessee company filed return of income for the Assessment Year 2010-11 in question on 15.11.2010 declaring total income of Rs.1,42,060/-. The return filed was processed u/s. 143(1) of the Act on 16.04.2011. Thereafter, the case was reopened u/s. 147 of the Act after obtaining necessary sanction un/s. 151 of the Act from the competent authority. Notice u/s. 148 of the Act dated 25.03.2017 was consequently issued and served upon the assessee. The reassessment order was framed wherein an addition of Rs.60 lakhs were made towards share application money received from 4 entities u/s. 68 of the Act. Provision of section 69C of the Act were also invoked and addition of Rs.1,20,000/- was made towards probable commission expenses incurred on such receipt of entries by the assessee.
CIT(A) dismissed the appeal of the assessee. Being aggrieved, the present appeal is filed.
Conclusion- On perusal of the objections raised on behalf of the assessee, we find that for multiple reasons, on standalone and cumulative basis, the reopening under Section 147 of the Act does not meet the strict requirement of law at all and thus, jurisdiction usurped under Section 147 is apparently without sanction of law.
