Anil Kumar Jain Vs DCIT (ITAT Delhi)
Reassessment Quashed for Mechanical & Undated Sanction u/s 151 – Non-Application of Mind Vitiates Entire Proceedings
The Delhi ITAT allowed the assessee’s appeal and quashed the reassessment for AY 2013-14 on the ground that the mandatory approval under Section 151 was granted in a purely mechanical and defective manner, rendering the assumption of jurisdiction invalid. The Tribunal found that in the approval proforma, the Assessing Officer failed to even mention that the original assessment had been completed under Section 143(3), and the PCIT recorded satisfaction by merely stating that it was a “fit case” for issue of notice without referring to any material, without recording reasons, and without proper application of mind.
The Tribunal further noted that the alleged “fresh material” from survey was already available before completion of the original assessment, negating the Revenue’s plea of new tangible material. Relying extensively on binding precedents including N.C. Cables (Delhi HC), Sabh Infrastructure, Saraswat Co-operative Bank (Bom HC) and SBC Minerals (Delhi HC), the Bench held that rubber-stamp approvals and ritualistic satisfaction defeat the statutory safeguard built into Section 151. Since the very initiation of reopening was invalid, the entire reassessment including additions for unsecured loans, bogus purchases and commission was quashed without examining merits. The appeal was accordingly allowed in full.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal is filed by the Assessee against the order of the Learned Commissioner of Income Tax (Appeals)-29, New Delhi (‘Ld. CIT(A)’ in short) dated 10.12.2024 in Appeal No. CIT(A), Delhi-29/10194/2019-20 arising out of the order passed u/s 147/148.r.w.s 143(3) of the Income Tax Act, 1961 (‘the Act’ for short) dated 08.12.2019 for Assessment Year 2013-14.
