Tribhawan Vs ITO (ITAT Delhi)
The Assessee filed the appeal with a delay of 473 days explaining that Ld.CIT(A) had granted time to submit written submissions up to 14.08.2023 but passed the appellate order prematurely on 10.08.2023. A rectification petition u/s 154 was pursued, causing delay. Tribunal accepted that sufficient cause existed & condoned the delay.
Assessee raised an additional legal ground contending that the approval u/s 151 for reopening was mechanical & without application of mind. Tribunal noted that reasons recorded for reopening were based solely on cash deposits of ₹36,00,000 in FY 2010-11 coupled with non-filing of return. These reasons were forwarded to PCIT, Rohtak for sanction u/s 151. The sanction form showed that the PCIT merely wrote a bald remark — “Yes, I am satisfied” — without recording even minimal reasoning.
Tribunal compared this with the law laid down in CIT Vs S. Goyenka Lime & Chemicals Ltd. affirmed by the Supreme Court (SLP dismissed in 64 taxmann.com 313), and the jurisdictional ruling in PCIT Vs. NC Cables Ltd. (391 ITR 11, Del.) holding that mere rubber-stamp approvals such as “approved” or “satisfied” are mechanical & invalid. Section 151 requires the sanctioning authority to apply an independent mind & record satisfaction, even briefly.
On this basis Tribunal held that the approval was invalid in law, and therefore the very assumption of jurisdiction u/s 147 was void ab initio. Once the reopening collapses, the reassessment order dated 30.11.2018 stands quashed. As a natural consequence, the connected penalty appeal u/s 271(1)(c) (ITA 1413/Del/2021) also fails.
Thus the entire reassessment was annulled on the jurisdictional defect alone. Other grounds on merits were left open.
Both appeals of the Assessee were allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
