Sharvah Multitrade Company Pvt Ltd v. ITO ( 2022) 285 Taxman 397/ 209 DTR 369/324 CTR 366 (Bom (HC) www.itatonline .org.

S. 147: Reassessment –Reasons recorded – Cash credit- Accommodation entries-Sanction – Non-application of mind – Strictures – CBDT to formulate a Scheme to train officers for recording reasons – Commissioners to not to grant sanction in a mechanical manner – Reassessment proceedings was quashed [S. 148 , 151, Art , 226]

Allowing the writ petition the Court held that where the recorded reasons suggested that the assessee received bogus accommodation entries from itself, it was a clear case of non-application of mind in forming the recorded reasons for reopening. The High Court has suggested that the CBDT could formulate a scheme to train officers for applying their mind in recording the reasons. Further, the CBDT to advise the concerned Commissioners to not grant approval under section 151 of the Income-tax Act, 1961 in a mechanical manner. Reassessment proceedings was  quashed.  (AY. 2014 -15 )  (ITO WP No. 3581 of 2021 dt. 20-12 – 2021)

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