|CORAM:||Diva Singh (JM), Sudhakar Reddy (AM)|
|CATCH WORDS:||Reopening, sanction|
|COUNSEL:||Rakesh Kumar Khiwani|
|DATE:||November 14, 2014 (Date of pronouncement)|
|DATE:||December 2, 2014 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|S. 147/ 151: Reopening mechanically on the basis of material received from another AO is bad. Merely noting "approved" without recording satisfaction is bad|
(i) A perusal of the above demonstrates that the AO has not applied his mind so as to come to an independent conclusion that he has reason to believe that the income has escaped assessment during the year. A mere reference is made to certain information received from the CIT, Delhi II vide an endorsement. What material was received is not part of the record. The reasons are vague and in our view, are not based on any tangible material.
(ii) A perusal of the above reasons demonstrate that the reasons recorded by the AO are not reasons acceptable to law. There is no independent application of mind. The AO had mechanically issued notices u/s 148 of the Act, on the basis of information allegedly received by him from the CIT, New Delhi 2. From the proforma for approval of notice, which is extracted above, it is clear that the AO was also not aware that the assessee had filed a return of income for the said AY. The ACIT has also not applied his mind. No satisfaction has been recorded by the Ld.ACIT. Only an approval is given. Thus in our view the reopening is bad in law (Signature Hotels (P) Ltd. Vs. ITO 338 ITR 51 (Delhi) followed).