Case Law Details
DCIT Vs M/s Kanchan India Pvt. Ltd. (ITAT Jaipur)
Notice of reassessment under section 148 issued on the basis of approval of Competent Authority without application of mind is invalid.
Conclusion: Since the approval granted by Pr. CIT to AO for reopening of assessment was clearly without application of mind and was not as per the mandate of the provision of section 151, therefore, notice issued u/s 148 on the basis of such approval and consequent assessment made on the basis of such notice were bad in law and deserved to be quashed.
Held: AO of assessee without carrying out any further enquiry, verification or investigation etc., initiated the reassessment proceedings u/s 148 on the very next day by sending the proposal u/s 151(1) to the Pr. CIT, Ajmer in which he had clearly mentioned that assessee had received fund through suspicious transaction which required further analysis and investigation/ verification and to verify these transactions the case was required to be reopened u/s 147. Assessee was aggrieved on several counts, i.e., the approval under section 151 was issued, as per assessee, in mechanical manner and without application of mind. CIT(A) allowed assessee’s objection raised under section 151. It was held Pr. CIT, Ajmer had accorded approval for issuing notice u/s 148 in a very routine, mechanical manner & without application of mind by simply putting her signatures below the rubber stamped ‘Yes, satisfied’. Such mechanical approval did not fulfil the mandate of provisions of sec. 151(1). It is an established position of law that proceedings u/s 148 cannot be initiated for the purpose of verification or inquiry etc.. Thus, notice issued u/s 148 on the basis of such approval and consequent assessment made on the basis of such notice were bad in law and deserved to be quashed.
FULL TEXT OF THE ITAT JUDGEMENT
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