Radhey Shyam vs DCIT

1.1.

“That on the facts and in the circumstances of the case, the PCIT, New Delhi, has erred in according sanction u/s 151 of the Income-tax Act, 1961, by issuing a single consolidated approval covering 111 cases, without any independent or case-specific satisfaction, thereby rendering the approval mechanical, invalid and void ab initio.

1.2.

That in view of the invalid and mechanical approval so granted u/s 151, the consequential notice issued u/s 148 of the Income-tax Act, 1961, is without jurisdiction, illegal and liable to be quashed.

2.1.

That on the facts and circumstances of the case, the CIT(A) was not justified in upholding the action of the Assessing officer in initiating the re-assessment proceedings in total disregard to the correct factual position and various documents already on record.

2.2

That the reasons recorded by the Assessing Officer are purely based on the information received from insight portal and in absence of any independent application of mind or investigation undertaken, the reopening u/s 148 is wholly based on borrowed satisfaction and is not sustainable for want of tangible/adverse material.

2.3

That the original assessment having been completed u/s 143(3) of the Act by the Assessing Officer after due verification of payment of opening balance of creditors, the notice u/s 148 is merely on account of change of opinion and for the purposes of re-appreciation of material already on record which is impermissible.

2.4

That the Appellant having already disclosed the particulars of payments made to the opening creditor balance of M/s Bansal Traders in the Audited balance Sheet and during the course of full scrutiny proceedings, there is no case of any failure on the part of the Appellant to disclose material facts in terms of 1 proviso of section 147 of the Act and as such notice u/s 148 is illegal and barred by limitation.

3.1

That even on merits, the CITIA) was not justified in setting aside the order back to the file of the Assessing officer without properly adjudicating the grounds and contentions raised by the Appellant.

3.2

That infact, the Assessing Officer, has erred in mechanically treating payments of Rs. 62,67,075/- towards opening creditors as bogus, despite the purchases being duly recorded in the preceding year.

3.3

That in absence of any dispute with regard to purchases or trading results, the Assessing officer was not justified in making the addition particularly when opening balance of trade creditor is of consequential nature.

3.4

That the purchase transaction incurred with M/s Bansal Traders being fully supported from relevant documentary evidences, the action of the Assessing officer in making the addition without rejecting the Audited books of accounts in terms of proviso to section 145 or disputing the quantitative stock is mechanical and arbitrary.

3.5

That even otherwise, the income earned from sale of goods purchased from M/s Bansal Traders already forming part of the returned income for the preceding year, the addition in respect of such transaction tantamount to double addition and as such the impugned addition is against the principle of natural justice.

4.

That the orders passed by the lower authorities are not sustainable on facts and same are bad in law.

5.

That the appellant craves leave to add, amend, alter or forgo any or all of the grounds as may be necessary and in the interest of justice.”

FORM FOR RECORDING THE REASONS FOR INITIATING THE PROCEEDING U/S 148 & FOR OBTAINING APPROVAL OF THE CCIT/CIT/ADDL.CIT

S. No.	Particulars
1	Name & address of the assessee	Radhey Shyam 17/93, Than Singh Nagar, Delhi-110005
2	PAN	ABAPS6682H
3	Status	Individual
4	Ward/Circle	ACIT, Circle-61(1), New Delhi
5	Assessment year in respect of which it is proposed to issue notice u/s 148.	2013-14
6	Quantum of income which has escaped assessment.	More than Rs. 1,00,000/-
7	Whether the provision of section 147 Explanation to (a)/(b) are applicable or both sections are applicable	N.A.
8	Whether the assessment is proposed to be made for the first time. If the reply is in the affirmative, please state. (a) Whether any voluntary return had already been filed and; (b) If so, the date of filing the said return.	No.
9	If the answer to item 8 is in the negative, Please state: - a). The income originally assessed b). Whether it is a case of under assessment / assessment at a too low rate which has been made the subject of a excessive relief of allowing of excessive loss or depreciation.	Rs. 92,62,440/- as per 143(3). No.
10	Whether the provisions of Sec. 150 (1) are applicable. If the reply is in the affirmative, the relevant facts may be stated and it may also be brought out that the provisions of Sec. 150(2) would not stand in the way of initiating proceedings u/s 147.	No.
11	Reasons for the belief that income has been escaped assessment.	As per Annexure-A

(Rajiv Ratan Singh) Assistant Commissioner of Income-tax Circle-61(1), New Delhi

12.

Whether the Addl. CIT is satisfied: On the reasons recorded by AO that it is a fit Case for the issue of notice u/s 148.

Yes, I am satisfied that this is a-fit Case for action u/s 147 of the I.T. Act.

Nagi 21.05.24

(S. S. Negi) Addl. Commissioner of Income Tax, Range-61, New Delhi

2021

Sub:- Identification of potential cases for action u/s 148 of the income tax act, 1961 as per clause (V) of para 1 of CDDT Instruction circulated vide F. No. 225/40/2021/ITA-II dated 04.03.2021 and further clarification dated 12.03.2021-rog.

Ref: Your Office letter Nos.

1.

Addl. CIT/Range-61/Approval 151(2)/u/s148/2020-21/1350 dated 26/27.03.2021(30 cases)

2.

Addl. CIT/Range-61/Approval 151(2)/u/s148/2020-21/1352 dated 27.03.2021(15 cases)

3.

Addl. CIT/Range-61/Approval 151(2)/u/s148/2020-21/1360 dated 28.03.2021(13 cases)

4.

ADDL.CIT/RANGE-61/VSV8/2020-21/1361 DATED 28.03.2021 (22 CASES)

5.

Addl. CIT/R-61/148 Proposal/2020-21/1354 dated 28.03.2021 (9 Cases)

6.

Addl. CIT/Range-61/148 Proposal/High Risk/2020-21/1363 Dated 28.03.2021 (22 Cases)

PUC is a letter received from O/o the Addl. CIT, Range-61, New Delhi vide letters No. 1350, 1352, 1360, 1361, 1354 & 13634 requesting to provide approval u/s 151 of the Income Tax Act, 1961 for initiation of proceedings u/s 147/148 of the Act in the following cases:

Sl. No.	Sl. No. as per letter	Name of the Assessor	PAH	A.Y.	Circle/ Ward
1.	Addl. CIT/Range-61/Approval 151(2)/u/s148/2020-21/1350 dated 26/27.03.2021(30 cases)
1	1	HARISH TIWARI	ABVPT8905B	2014-15	C-61(1)
2	2	S. RAVI	ABEPR9526M	2014-15	C-61(1)
3	3	SANDBEP PURI	AAMPP9254E	2014-15	C-61(1)
4	4	RADHEY SHYAM	ABARS6682H	2013-14	C-61(1)
5	5	MOHAN LAL JAIN	AAOPJ8244F	2013-14	C-61(1)
6	6	REKU KIALIK	AAMPK3351J	2015-16	C-61(1)
7	7	SANJEEV KUMAR CHITKARA	AAPPC5109F	2015-16	C-61(1)
8	8	DHIRENDRA PRATAP SRIVASTAVA	AASPS8972R	2014-15	C-61(1)
9	9	DILIP KUMAR	AASPS9921J	2014-15	C-61(1)
10	10	VINOD SHANI	AARPS8249J	2013-14	C-61(1)
11	11	RAMAN CHAWLA	AAMPC4618G	2015-16	C-61(1)
12	12	RAJ KUMAR TYAGI	AAFER7012N	2013-14	C-61(1)
13	13	BRIJ MOHAN SHARMA	AARPS6591F	2014-15	C-61(1)
14	14	AJAY DUA	AAJPD3532B	2015-16	C-61(1)
15	15	S. RAVI	ABEPR9526M	2015-16	C-61(1)
16	16	SATYA NARAYAN GUPTA	AGPPO5104J	2013-14	C-61(1)
17	17	VARDHMAN SALES AGENCY	AAAPV5042R	2013-14	C-61(1)
18	18	SANJEEV SHANKAR	ABGPS6917D	2015-16	C-61(1)
19	19	ANIL DEV SINGH	AATPS1015N	2013-14	C-61(1)
20	20	XB BIKES	AAPX0562Q	2013-14	C-61(1)
21	21	TIRUPATI CEMENT PRODUCTS	AACPT2702L	2013-14	C-61(1)
22	22	RAJKUMAR AGGARWAL	AACPA6397C	2014-15	C-61(1)
23	23	ASHOK KUMAR JAIN	AAHPJ8777E	2014-15	C-61(1)
24	24	RAJKUMAR JAIN	AAPK7776P	2013-14	C-61(1)
25	25	POONAM GARG	AAOPQ2986F	2013-14	C-61(1)
26	26	SAJEEV KUMAR CHITKARA	AAACT6167G	2013-14	C-61(1)
27	27	ALOK DHIR	AAPPD5235P	2014-15	C-61(1)
28	28	KUNDU CONSTRUCTION CO.	AAOPK0151Q	2013-14	C-61(1)

पं० : 28 MAR 2021

28 MAR 2021

29	29	KHEM CHAND SHARMA	AKMPS4378M	2013-14	C-61(1)
30	30	NAND KUMAR YADAV	APPPK6579N	2014-15	C-61(1)
2. F.NO. Addl. CIT/Range-61/Approval 151(2)/u/s148/2020-21/1352 (c+1 27.03.2021(15 cases))
31	1	ABHISHEK MOHAN GUPTA	AAHPG2259F	2013-14	C-61(1)
32	2	ANKIT AGARWAL	ADWPA6795M	2015-16	C-61(1)
33	3	ASHOK KUMAR TANDON	AACPT4661N	2013-14	C-61(1)
34	4	BAJRANG LAL KARNANI	AHEPK4158L	2013-14	C-61(1)
35	5	BALRAJ KUNDU	AGKPK0213F	2013-14	C-61(1)
36	6	BRIJESH SISODIA	AYLPS8551K	2013-14	C-61(1)
37	7	DEEPAK MEHTA	AAAPM5044J	2013-14	C-61(1)
38	8	DILIP KUMAR SAXENA	AASPS9921J	2015-16	C-61(1)
39	9	RAJIV AGGARWAL	AGLPA9303K	2013-14	C-61(1)
40	10	RAVI MALIK	AGBPS2554Q	2015-16	C-61(1)
41	11	SANJAY KUMAR	AJEPK5578N	2015-16	C-61(1)
42	12	SANJEEV AGGARWAL	AACOA0587E	2015-16	C-61(1)
43	13	SANTOH KUMAR BAGLA	AEIPB2617Q	2014-15	C-61(1)
44	14	TUSHAR MITTAL	AOXPM0626H	2015-16	C-61(1)
45	15	VINOD KUMAR SOLANKI	AXDPS1058C	2015-16	C-61(1)
3. F.NO. ADDL.CIT/RANGE-61/APPROVAL 151(2)/U/S 148/2020-21/1360 DATED 28.03.2021 (13 CASES)
46	1	RAJIV SINGH	ALDPS0781N	2014-15	C-61(1)
47	2	VIDYA WATI SHARMA	ARYPS6705K	2015-16	C-61(1)
48	3	SHALINI AGGARWAL	AENPM4051L	2014-15	C-61(1)
49	4	SANJAY JAIN	AEYPJ6500J	2013-14	C-61(1)
50	5	NARESH KUMAR KATYAL	BGHPK6734K	2015-16	C-61(1)
51	6	KAWALJEET SINGH DUGGAS	AECPD0170Q	2013-14	C-61(1)
52	7	SANJAY JAIN	AEYPJ6500J	2014-15	C-61(1)
53	8	PRAMOD AGGARWAL	APKPA0776J	2015-16	C-61(1)
54	9	NIMIT AGGARWAL	ADPPA1080N	2014-15	C-61(1)
55	10	NIMIT AGGARWAL	ADPPA1080N	2015-16	C-61(1)
56	11	RAJENDER KUMAR JAIN	AAGPJ8478B	2014-15	C-61(1)
57	12	RAJAT MUKHEKLEE	AFEPM4420P	2015-16	C-61(1)
58	13	SHALINI AGGARWAL	AENPM4051L	2013-14	C-61(1)
4. F.NO. ADDL.CIT/RANGE-61/VSVB/2020-21/1361 DATED 28.03.2021 (22 CASES)
59	1	STEEL BIRD HI-TECH (INDIA) LTD.	AACPS2545J	2015-16	W-61(1)
60	2	PAWAN KUMAR SHARMA	AAOPS3584B	2013-14	W-61(1)
61	3	TANYA GOGIA	AGUPG8607P	2015-16	W-61(1)
62	4	SUNITA BHARDWAJ	AHFPB1928E	2014-15	W-61(1)
63	5	GYANENDERA KUMAR ISHRA	AKJPM4658D	2014-15	W-61(1)
64	6	GYANENDERA KUMAR ISHRA	AKJPM4658D	2014-15	W-61(1)
65	7	MAHESH KUMAR AGARWAL	AAGPA0294Q	2013-14	W-61(1)
66	8	SUDHIR KUMAR AGARWAL	AAOPA3900H	2013-14	W-61(1)
67	9	PRAMOD KUMAR TIBERWALA	AACPT0701B	2013-14	W-61(1)
68	10	SUNITA BHARDWAJ	AHFPB1928E	2013-14	W-61(1)
69	11	DHARAM PAUL CHAWLA	AAPPC0055L	2013-14	W-61(1)
70	12	RAJEEV AGARWAL	AGLPA9303K	2013-14	W-61(1)
71	13	POOJA YADAV	AAYPY9532H	2013-14	W-61(1)
72	14	POOJA YADAV	AAYPY9532H	2015-16	W-61(1)
73	15	PARVEEN CHAWLA	AADPC5806D	2013-14	W-61(1)
74	16	K PRASAD AND COMPANY	AGFPG5104J	2013-14	W-61(1)
75	17	YASHPAL GUPTA	ADVPG9925E	2013-14	W-61(1)

76	18	SUNIL KALRA	AGHPK9752C	2013-14	W-61(1)
77	19	ONKAR SINGH	AJXP88385A	2013-14	W-61(1)
78	20	POOJA Y ADAV	AAYPY9532H	2014-15	W-61(1)
79	21	SUNITA BHARDWAJ	AHFPB1928E	2014-15	W-61(1)
80	22	SURENDER KUMAR GOEL	AAGP05202Q	2013-14	W-61(1)
5.	F.No. ADDL.CIT/R-61/148 PROPOSAL/2020-21/1354 DATED 28.03.2021 (9 CASES)
81	1	JAOVIR SINGH DHAKA	BAJPD4275N	2015-16	W-62(1)
82	2	RITA SARKAR	DPIPB0572F	2015-16	W-62(1)
83	3	ILIYAS KHAN	CBDPK0464J	2015-16	W-62(1)
84	4	PRANAB KUMAR BASAK	BBVPB8785N	2015-16	W-62(1)
85	5	PRAVEEN RAWAT	AZKPR5001K	2015-16	W-62(1)
86	6	SHREE DIAMONDS	ABXPB9277K	2013-14	W-62(1)
87	7	RAM PARSHAD VERMA	AMHPV0335R	2015-16	W-62(1)
88	8	SAHIL VERMA	ANAPV8741N	2015-16	W-62(1)
89	9	VEENA MAHAJAN	RJUPM6105Q	2015-16	W-62(1)
6.	F.No. Addl. CIT/Range-61/148 Proposal/High Risk/2020-21/1363 Dated 28.03.2021 (22 Cases)
90	1	PRIYANKA JAIN	AAIPJ3211C	2014-15	W-63(1)
91	2	VANDANA MITTAL	AZKPM6913E	2015-16	W-63(1)
92	3	J K IMPEX	AACFJ9850D	2014-15	W-63(1)
93	4	KANTI DEVI	AAPPD1212L	2013-14	W-63(1)
94	5	SILPY MITTAL	APUPM5972J	2015-16	W-63(1)
95	6	KAPIL RATHI	ADKPR8031K	2015-16	W-63(1)
96	7	KIRAN CHAND,BOTHRA & SONS HUF	AADHK9448J	2015-16	W-63(1)
97	8	ADITYA ALUMINIUM	AAXPA1036H	2014-15	W-63(1)
98	9	VARUN MITTAL	BKKPM0955P	2014-15	W-63(1)
99	10	KRISHNA SALES UDYOG	AAMPK0479R	2014-15	W-63(1)
100	11	MOHDI IMRAN	AXOPI4274L	2014-15	W-63(1)
101	12	MOHAN	BQOPM2099C	2013-14	W-63(1)
102	13	MOHD. ALI	AGCPA2687P	2013-14	W-63(1)
103	14	PRIYANKA JAIN	AAIPJ3211C	2013-14	W-63(1)
104	15	PRASANT ARORA	AEVPA7645A	2013-14	W-63(1)
105	16	NARESH KUMAR	CVAPK0492B	2014-15	W-63(1)
106	17	VIPIN BHEGAL	AGOPB3545C	2015-16	W-63(1)
107	18	VIKAS KUMAR	BERPK6592P	2014-15	W-63(1)
108	19	S. N. ENTERPRISES	ABLFS4325Q	2014-15	W-63(1)
109	20	S. N. ENTERPRISES	ABLFS4325Q	2015-16	W-63(1)
110	21	RAJESH GUPTA	ALJPO1541R	2014-15	W-63(1)
111	22	RAJESH GUPTA	ALJPO1541R	2015-16	W-63(1)

Draft Order is put up for kind perusal/ approval please. If approved the requisite report may kindly be sent O/o the Addl. CIT, Range-61, New Delhi for kind information please.

Fr. CIT-15, New Delhi.

On careful perusal of information received, relevant details/ evidences submitted as reasons recorded by the Assessing Officer, the cases from SL. no. 1 to 111 as listed in the annexures enclosed appear prior to befit cases for action. Up 197/198 of the E.T. Act, 1961. 28/03/2021

15.

“It is a trite law that the grant of approval/sanction is neither an empty formality nor a mechanical exercise. The Competent Authority must apply its mind independently on the basis of material placed before it before grant of approval/sanction. 16. Perusal of the record reveals that the proforma for seeking approval was placed before the Principal Commissioner, Income Tax along with a note of reasons for re-opening of assessment under section 147 of the Act. The PCIT passed the following orders:-

“On careful perusal of information received, relevant details/evidences submitted and reasons recorded by the Assessing Officer, the cases from SL. No. 1 to 111 as listed in the annexures enclosed appear prima facie to be fit cases for action u/s 147/148 of the I. T. Act, 1961.” 17. It is evident that the approval dated 28.03.2021 is in respectof111 cases of reassessment. It is a general order ofapprovalforallthe111 cases. There is not even a whisper as to what material had weighed in the grant of approval in the present case. While the PCIT is not required to record elaborate reasons, he has to record satisfaction after application of mind. The approval is a safeguard and has to be meaningful and not merely ritualistic or formal. The sanction order does not refer to the material of any of the 111 cases. The grant of approval in such a manner does not fulfil the requirement of section 151 of the Act.”

22.

“It is further seen from the copy of order sheet available at pages 405 to 407 of the paper book for AY 2012-13 , as reproduced above, in the case of assessee, the approval for AY 2014-15 was granted twice at S.No. 62 & 79 and for AY 2013-14 at S.No. 68 however, no approval was available for AY 2015-16 by Ld. Pr.CIT. This further established the fact that the approval in the case of the assessee was given in a mechanical manner and approval for multiple assesses was given by a single order thus, Ld. Pr. CIT has not applied his mind while granting the approval for re-opening of the assessment. In view of these facts and placing reliance on the judgement of Hon’ble Supreme Court in the case of CIT vs. S. Goyanka Lime & Chemical Ltd. (supra) and further Hon’ble Jurisdictional High Court as referred above in assessee’s appeal for AY 2012-13 in ITA No 1434/Del/2024, we have no hesitation in holding that the approval granted by Ld. Pr. CIT is without application of mind and was granted in mechanical manner therefore, the reassessment proceedings initiated u/s 147 of the Act and the consequent re-assessment order passed u/s 147 r.w.s. 143(3) for all the three assessment years i.e. for AY 2013-14, AY 2014-15 and AY 2015-16 are hereby, quashed. The grounds of appeals Nos. 1 & 2 for all these three years are thus allowed.” 8. Since the facts of the case are identical to the facts of Vinod Kumar Solanki (supra) and also with Sunita Bhardwaj (supra) where the cases were reopened on the basis of the common approval and assessee is also part of the said common approval and the Hon’ble Jurisdictional High Court has held such approval granted u/s 151 as invalid. Thus, by respectfully following the said order, we hereby, Page | 10 hold that approval granted u/s 151 by Ld. PCIT for 111 cases without recording satisfaction of each individual case separately is mechanical approval and is not in accordance with the provision of section 151 of the Act and thus, is not valid approval. Accordingly, the notice issued u/s 148 of the Act in the case of assessee based on such approval is held as invalid and consequent re-assessment order is quashed. Grounds of appeal No. 1.1 to 1.2 are accordingly, allowed. 9. Since we have quashed the re-assessment order and allowed Grounds of appeal Nos. 1.1 to 1.2 raised by the assessee, the other Grounds of appeal became academic hence, not adjudicated.