Anchor Alloys (P) ltd. Vs ACIT (ITAT Delhi)
Mechanical 151 approval & no failure allegation: ITAT Delhi quashes reopening beyond 4 years
Delhi Tribunal allowed the assessee’s appeal and quashed the reassessment proceedings initiated u/s 147. The Tribunal held that the reopening, initiated beyond four years from the end of the relevant assessment year, was invalid in law as the recorded reasons did not allege any failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. It was noted that the issue of share application money had already been examined in the original scrutiny assessment u/s 143(3), with the assessee having furnished complete details such as PAN, bank statements, ITRs and audited financials of the investor. Further, the Tribunal found that the approval granted u/s 151 was purely mechanical, as the Principal CIT merely recorded satisfaction “as per annexure” without any independent application of mind. Such an approval was held to be contrary to the statutory mandate. On these twin grounds—absence of failure allegation and invalid sanction—the assumption of jurisdiction was held to be bad in law, and the impugned reassessment was quashed in entirety.
FULL TEXT OF THE ORDER OF ITAT DELHI
