SGS Real Estates Private Limited Vs ACIT (ITAT Ranchi)
Seal without Mind application is not satisfaction – Undated & Mechanical Approval u/s 151 Invalid – Reopening quashed
Assessee challenged the reopening of assessment for AY 2012-13 on the ground of invalid approval u/s 151. AO had issued notice u/s 148 on 29.03.2019, allegedly based on approval granted by the PCIT.
Assessee pointed out serious defects- the approval was received by AO only on 01.04.2019, i.e., after the notice had already been issued; the approval form provided was initially unsigned; a later copy carried a seal but no clear date or signature of PCIT. The satisfaction note of the PCIT was merely a rubber stamp seal, not a conscious application of mind.
Revenue argued that these were only minor procedural irregularities, & the approval should be presumed valid.
Tribunal noted that the approval granted by PCIT, admittedly is undated & the satisfaction note is by application of a seal, the fact that the form for approval has been served on the assessee having the seal but not the signature of PCIT clearly shows that PCIT has not applied his mind but the seal has already been put. Thus the placing of the seal cannot be said to be a recording of satisfaction of PCIT. Tribunal held that the satisfaction for the approval for issuance of notice u/s 148 by PCIT is invalid, that the reopening is also invalid & the consequential assessment stands quashed.
