Sumit Suneja Vs ACIT (ITAT Delhi)
Assessee’s case was reopened u/s 147 based on information of cash deposits (Rs 38,72,062 in PNB & Rs 2,10,600 in South India Bank). Assessee did not respond during assessment, leading to a best judgment order u/s 144, adding Rs40,82,662 as unexplained deposits.
Assessee’s contended that reassessment invalid for non-compliance with mandatory requirements of section 147/148 and that Approval u/s 151 was mechanical & without independent application of mind. AO mentioned non-existent section “147(a)” in approval form (provisions omitted from statute w.e.f. 01.04.1989). Assessee relied on ITAT Delhi ruling in Amit Khatri v. ITO where similar defect led to quashing of reassessment.
Tribunal’s noted that approval form mentioned s. 147(a), a repealed provision, showing clear non-application of mind by AO & sanctioning authority. Approval was undated & contained only a generic remark “Yes, I am satisfied…”, evidencing mechanical sanction. Cited CIT v. Kelvinator India Ltd. (Delhi HC FB & SC) holding that reassessment cannot be based on mere change of opinion & must be backed by tangible material. Allowing appeal, Reassessment order dt 30.11.2018 u/s 147/144 for AY 2011-12 quashed.
FULL TEXT OF THE ORDER OF ITAT DELHI
The Assessee has filed this Appeal against the Order of the National Faceless Appeal Centre (NFAC), Delhi dated 08.01.2025 relating to assessment year 2011-12 on as many as 6 grounds, however, he has argued only on the legal issues wherein he has raised the following grounds:-
1. The impugned assessment is invalid and without jurisdiction as the said assessment is completed without complying with legal requirements of provisions of section 147/148 of the Income Tax Act therefore such assessment is void ab initio and liable to be quashed.
2. The authorities below has erred both in law and circumstances of the case in initiating action u/s. 147 of the Act ignoring the fact that the proceedings have been initiated without application of independent mind on the material, if any, available. In view of the above defects in the compliances the resultant reassessment proceedings are required to be set aside.
3. The authorities below has erred both in law and circumstances of the case in initiating action u/s. 147 of the I.T. Act ignoring the fact that the proceedings have been initiated by mechanical approval accorded by the PCIT and such approval vitiates the assessment.
2. Brief facts are that the assessee’s case was reopened for assessment u/s. 147 of the Act based on the information of cash deposits in bank account. AO noted that the assessee had deposited cash amount Rs. 38,72,062/- in bank account held in PNB and Rs. 2,10,600/- in bank account with South India Bank. The assessee remained non-responsive during the assessment proceedings, consequently, the AO passed the best judgement order u/s. 144 with addition of total amount of Rs. 40,82,662/- as unexplained deposits.
