The New Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) quashed re assessment proceedings and noted that “Mere putting of seal as approving statement is not sufficient”.
The assessee in the present matter is Ashok Kumar Agarwal.
The Assessing Officer (AO) proceeded to initiate action under Section 147/148 of the Income Tax Act on the sole premise that the PAN, information regarding filing of return for A.Y. 2009-10 is not available and therefore has reason to believe that capital gain accrued to the assessee on account of sale of immovable property has escaped assessment within the meaning of under Section 147 of Income Tax the Act.
From the copy of return of income filed by the assessee on 30.09.2009 for A.Y. 2009-10 and computation of income clearly reveals that the assessee did file return of income within prescribed time limit and also offered long term capital gain income
The counsel of the assessee submitted that as per copy of the reasons recorded by the Assessing Officer, the AO noted that in absence of PAN, information regarding filing of return for A.Y. 2009-10, which is not available it reflects that no capital gain has been declared by the assessee on the sale of immovable property during A.Y. 2009-10.
Thea counsel also submitted that the Assessing Officer (AO) has proceeded to initiate reassessment proceedings under Section 147 of the Income Tax Act on basis of incorrect and wrong facts therefore only on this ground initiation of reassessment proceedings and all consequent orders deserves to be quashed.
The Senior DR strongly supported the action of the AO in initiating reassessment proceedings under Section 147 of the Income Tax Act and issuing notice under Section 148 of the Income Tax Act.
The Bench consisting of Chandra Mohan Garg, Judicial Member observed that “Merely putting a seal as approving statement is not sufficient and make it clear that the approving authority has granted approval in a mechanical manner without application of mind to the relevant material and reasons recorded by the AO.Therefore, the initiation of reassessment proceedings fails on this count.”
The Tribunal further said that “I am unable to agree with the contention of the Senior DR that the putting seal as statement of approval is sufficient as the any exercise in the part of the PCIT for application of mind towards the said material which was gathered by the AO and the reasons recorded by him for the purpose of initiation of reassessment proceedings and issuance of notice under Section 148 of the Income Tax Act.”
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