Rosha Alloys P Limited Vs DCIT (ITAT Chandigarh)
Summary: ITAT Chandigarh allowed the assessee’s appeals/cross-objections for AYs 2018-19 to 2020-21 and dismissed the Revenue’s appeals in a group of matters arising from a search conducted on 08.09.2021. For AY 2018-19, the assessee challenged, among other issues, the validity of approval granted by the Additional CIT under Section 148B, sanction under Section 151, additions based on alleged excess production inferred from electricity consumption, alleged bogus purchases of Rs.1,92,51,910/- from Neelkanth Steel & Allied Industries and rejection of books under Section 145(3). The Tribunal held that the Section 151 approval suffered from variance between the reasons recorded by the Assessing Officer and the matters actually approved by the PCIT.
Following the principles concerning meaningful application of mind to statutory sanction, including the decisions discussed in Teleperformance Global Services and other authorities, it held the Section 148 notice bad in law. The Tribunal separately examined the Section 148B approval, noting that the second show-cause notice required compliance by 7:00 PM on 29.03.2023, the matters for all three years were forwarded to the Additional CIT on the same day and approval was granted on 30.03.2023. Relying upon the jurisprudence concerning mechanical approvals, including Serajuddin, Ganesh Builders and SP Singla Construction Co., it held that the approval was granted mechanically and the consequential assessment could not survive. On merits, the Tribunal rejected additions founded on estimated electricity consumption.
