Search Results For: 151


ITO vs. Ashok Jain (ITAT Surat)

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DATE: November 14, 2018 (Date of pronouncement)
DATE: December 3, 2018 (Date of publication)
AY: 2007-08
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CITATION:
S. 148/ 151: If the AO issues the notice for reopening the assessment before obtaining the sanction of the CIT, the reopening is void ab initio. The fact that the sanction was given just one day after the issue of notice makes no difference

No doubt in the present case, the ld.AO has applied for such approval which was granted on 29.3.2017, but before grant of approval, the ld.AO has already issued notice on 28.3.2014 which is without any jurisdiction. He can issue notice only after getting approval. Thus, the ld.CIT(A) has rightly quashed the assessment because the very foundation for issuance of notice under section 148 is the approval from the competent authority, i.e. Commissioner of Income Tax, and in the absence of such, such notice is void ab initio

Sonia Gandhi vs. ACIT (Delhi High Court)

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DATE: September 10, 2018 (Date of pronouncement)
DATE: September 13, 2018 (Date of publication)
AY: 2011-12
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CITATION:
S. 147/ 56(2)(vii): Law explained on (i) reopening of assessment by issue of s. 148 notice at the 11th hour and based on "stale" material, (ii) nature of sanction to be accorded by the CIT u/s 151 and (iii) scope of s. 56(2)(vii) and whether difference between 'fair market value' and face value of unquoted shares can be assessed as income. All important judgements referred

When the assessees acquired the shares through allotment, the taxing event, as it were, occurred on account of the differential between what is said to be market value and what was value paid by them. As a result, it is held that the primary obligation to disclose about the acquisition of shares, was not relieved by virtue of the notification under Section 25 (6) of the (now repealed) Companies Act, 1956. It is, therefore, held that prima facie, there is no merit in this argument; it cannot be said that the effect of the exemption notification was to relieve the assessees from their obligation to disclose about the acquisition of the shares, which appears to be the taxing event (on account of the differential between the acquisition cost and the fair market value).

Sonu Khandelwal vs. ITO (ITAT Jaipur)

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DATE: August 21, 2018 (Date of pronouncement)
DATE: September 1, 2018 (Date of publication)
AY: 2006-07, 2009-10
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CITATION:
S. 147/ 151: S. 150(1) overrides s. 149 but not s. 151. Accordingly, even if the assessment is reopened to make reassessment in consequence of or to give effect to any finding or direction of the appellate authority, the requirement of sanction u/s 151 is mandatory for issuing notice u/s 147. The failure to obtain sanction renders the reopening invalid

even if the assessment is reopened to make reassessment in consequence of or to give effect to any finding or direction of the appellate authority the requirement of sanction U/s 151 is mandatory for issuing notice U/s 147 of the Act. Even otherwise from the plain reading of Section 150(1) of the Act, it is clear that it begins with non-obstante clause as far as the limitation provided U/s 149 of the Act and therefore, Section 150(1) has an overriding effect on Section 149 and not over Section 151 of the Act. The requirement of sanction U/s 151 of the Act is in the nature of check and balance and it is a measure against the misuse of power by the assessing authority for assessment or reassessment based the reasons not found satisfactory by the authorities provided U/s 151 of the Act

Pioneer Town Planners Pvt. Ltd vs. DCIT (ITAT Delhi)

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DATE: August 6, 2018 (Date of pronouncement)
DATE: August 10, 2018 (Date of publication)
AY: 2009-10
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CITATION:
S. 147/ 151: (i) Sanction granted by writing "Yes, I am satisfied" is not sufficient to comply with the requirement of s. 151 because it means that the approving authority has recorded satisfaction in a mechanical manner and without application of mind, (ii) If information is received from investigation wing that assessee was beneficiary of accommodation entries but no further inquiry was undertaken by AO, said information cannot be said to be tangible material per se and, thus, reassessment on said basis is not justified (All imp judgements referred)

This shows that the AO proceeded to initiate reassessment proceedings on the basis of borrowed satisfaction without any application of mind and exercise on the information received from the Investigation Wing of the Department. Therefore, we have no hesitation to hold that the AO proceeded to initiate reassessment proceedings u/s. 147 of the Act and to issue notice u/s. 148 of the Act on the basis of borrowed satisfaction and without any application of mind and examination of the so called material and information received from the investigation wing to establish any nexus, even prima facie, with the such information

CIT vs. Aquatic Remedies Pvt. Ltd (Bombay High Court)

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DATE: July 25, 2018 (Date of pronouncement)
DATE: July 31, 2018 (Date of publication)
AY: 2004-05
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CITATION:
S. 148/ 151: If the AO reopens the assessment by obtaining the sanction of the Commissioner of Income Tax instead of the Additional Commissioner of Income Tax, there is a breach of section 151 which renders the reopening void

It is undisputed position before us that in terms of Section 151(2) of the Act, the sanctioning/ permission to issue notice under Section 148 of the Act has to be issued by the Additional Commissioner of Income Tax. We find that the Assessing Officer had not sought the approval of the Designated Officer but of the Commissioner of Income Tax. This is clear from the Form used to obtain the sanction. In any case, the approval/ satisfaction recorded in the form submitted for sanction of the Commissioner of Income Tax by the Assessing Officer reproduced herein above, it is clear that the Additional Commissioner of Income Tax had not granted permission to initiate reopening proceedings against the Respondent Assessee

Usha Agarwal vs. ITO (ITAT Agra)

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DATE: June 19, 2018 (Date of pronouncement)
DATE: July 10, 2018 (Date of publication)
AY: 2007-08
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CITATION:
S. 147/148: If there is nothing in the recorded reasons to suggest that the income chargeable to tax which has escaped assessment is Rs. one lakh or more, the notice issued u/s 148 of the Act beyond four years of the end of the relevant assessment year is invalid

The second point which is very important is that in regard to the cases falling under section 34(1A), action can be taken only where the income which has escaped assessment is likely to amount to Rs.1 lakh or more. In other words, it is only in regard to cases where the escaped income is of a high magnitude that the restriction of the period of limitation has been removed. Since no reasons were recorded that the escaped income is likely to be Rs.1 lac or more so that the Chief Commissioner or Commissioner may record his satisfaction under section 151, the initiation of reassessment proceedings after more than four years was clearly barred by time

Ghanshyam vs. ITO (ITAT Agra)

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DATE: June 19, 2018 (Date of pronouncement)
DATE: July 7, 2018 (Date of publication)
AY: 2008-09
FILE: Click here to view full post with file download link
CITATION:
S. 147/ 151: If the CIT merely states "Yes, I am satisfied" while granting sanction to the reopening, it means that the sanction is merely mechanical and he has not applied independent mind. There is not an iota of material on record as to what documents he had perused and what were the reasons for his being satisfied to accord the sanction to initiate the reopening of assessment (All judgements referred)

Apparently, from the approval recorded and words used that “Yes. I am satisfied.”, it has proved on record that the sanction is merely mechanical and Addl. CIT has not applied independent mind while according sanction as there is not an iota of material on record as to what documents he had perused and what were the reasons for his being satisfied to accord the sanction to initiate the reopening of assessment u/s 148 of the Act

Sunil Agarwal vs. ITO (ITAT Delhi)

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DATE: May 24, 2018 (Date of pronouncement)
DATE: May 26, 2018 (Date of publication)
AY: 2008-09
FILE: Click here to view full post with file download link
CITATION:
S. 147/ 151: If the AO reopens on the basis of information received from another AO without further inquiry, it means he has proceeded "mechanically" and "without application of mind". If the CIT does not give reasons while according sanction, it implies that he has also not applied his mind. Both render the reopening void (All imp judgements referred)

Section 151 of the Act clearly stipulates that the CIT(a), who is the competent authority to authorize the reassessment notice, has to apply his mind and form an opinion. The mere appending of the expression ‘approved’ says nothing. It is not as if the CIT(A) has to record elaborate reasons for agreeing with the noting put up. At the same time, satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner. In the present case, the exercise appears to have been ritualistic and formal rather than meaningful, which is the rationale for the safeguard of an approval by a higher ranking officer

ITO vs. Virat Credit & Holdings Pvt.Ltd (ITAT Delhi)

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DATE: February 9, 2018 (Date of pronouncement)
DATE: March 9, 2018 (Date of publication)
AY: 2005-06
FILE: Click here to view full post with file download link
CITATION:
S. 147 Reopening: The grant of approval by the CIT with the words “Yes. I am satisfied” proves that the sanction is merely mechanical and he has not applied independent mind while according sanction as there is not an iota of material on record as to what documents he had perused and what were the reasons for his being satisfied to accord the sanction to initiate the reopening of assessment u/s 148 of the Act

Apparently, from the approval recorded and words used that “Yes. I am satisfied.”, it has proved on record that the sanction is merely mechanical and Addl.CIT has not applied independent mind while according sanction as there is not an iota of material on record as to what documents he had perused and what were the reasons for his being satisfied to accord the sanction to initiate the reopening of assessment u/s 148 of the Act

M/s Brothers & Sisters Enterprise vs. JCIT (ITAT Kolkata)

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DATE: September 8, 2017 (Date of pronouncement)
DATE: September 12, 2017 (Date of publication)
AY: 2010-11
FILE: Click here to view full post with file download link
CITATION:
CBDT guidelines for scrutiny of cases: Law explained as to how the CBDT Guidelines for manual selection of cases for scrutiny have to be interpreted and whether CIT in granting approval is required to show application of mind and give reasons for his decision

The Criteria / Guidelines for Income tax Scrutiny dated 10th September 2011 authorize the Assessing Officer to select any return for scrutiny after recording the reasons and obtaining approval of the CCIT/CIT. The case under the category should be selected if, they are compelling the reasons and the case selected through CASS. These cases should be watched by CCIT / CIT in respect of the quality of assessment. In our view, the requirements of the guidelines have been met by the AO in this case. The term compelling reasons is a relative term and has to be viewed from the point of view of the AO

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