Take notes as you read a judgment using our Virtual Legal Assistant and get email alerts whenever a new judgment matches your query (Query Alert Service). Try out our Premium Member services -- Free for one month.\n\nIncome Tax Appellate Tribunal - Delhi\nBehat Holdings Ltd., New Delhi vs Ito Ward-4(3), New Delhi on 15 January, 2020\n       IN THE INCOME TAX APPELLATE TRIBUNAL\n              DELHI BENCHES "A": DELHI\n\n  BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER\n                        AND\n     SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER\n\n                 ITA.No.8066/Del./2019\n               Assessment Year 2010-2011\n\nM/s. Behat Holdings Ltd.,\n                                 The Income Tax Officer,\n14, 4380/4B Murari Lal\nStreet, Ansari Road,         vs., Ward-4(3), Room No.385A,\nDaryaganj, Central Delhi         C.R. Building,\nPIN - 110 002.\n                                 New Delhi.\nPAN AADCB7691L\n         (Appellant)                   (Respondent)\n\n                            Shri Ashwani Kumar, C.A.\n                            Shri Rohit Jain, Advocate,\n             For Assessee :\n                            Shri Deepesh Jain, C.A. And\n                            Shri Arpit Goel, C.A.\n             For Revenue : Shri Ved Prakash Mishra, Sr. DR\n\n           Date of Hearing : 08.01.2020\n    Date of Pronouncement : 15.01.2020\n\n                            ORDER\n\nPER BHAVNESH SAINI, J.M.\n          This appeal by Assessee has been directed\n\nagainst the Order of the Ld. CIT(A)-2, New Delhi, Dated\n\n13.09.2019, for the A.Y. 2010-2011.\n                                2\n                                       ITA.No.8066/Del./2019 M/s. Behat\n                                   Holdings Ltd., Daryaganj, Central Delhi.\n\n\n2.        Briefly the facts of the case are that return of\n\nincome for the A.Y. 2010-2011 was filed by the assessee.\n\nNotice under section 148 was issued on 27.03.2017 and\n\nserved upon the assessee. In response to the notice under\n\nsection 148, assessee filed copy of the return of income\n\ndeclaring loss of Rs.(-)95,916/- already filed on 15.10.2010.\n\nThe A.O. issued statutory notices for completion of the\n\nassessment. Though the assessee attended the proceedings\n\nand furnished relevant requisite details which have been\n\nexamined by the A.O. A.O. in the re-assessment order from\n\nparas 1 to 8 reproduced the copy of the reasons recorded\n\nunder section 148 of the I.T. Act. Thereafter, A.O. noted that\n\nassessee was provided copy of the reasons and objections\n\nraised have been disposed of. The assessee has filed\n\nsubmissions giving confirmation copy of the account and\n\ncopy of the ITR in respect of the parties from whom share\n\ncapital/share premium were raised during the year under\n\nconsideration. The A.O. issued notices under section 133(6)\n\nof the I.T. Act for verification. Only one party responded. The\n\nassessee has not produced the Directors of the concerned\n                              3\n                                     ITA.No.8066/Del./2019 M/s. Behat\n                                 Holdings Ltd., Daryaganj, Central Delhi.\n\n\nparties. Therefore, the A.O. made addition of Rs.7 crores\n\nunder section 68 of the I.T. Act and also made addition of\n\nRs.14 lakhs on account of Commission paid @ 2%. The\n\nassessment order was passed under section 147/143(3) of\n\nthe I.T. Act. The assessee challenged the reopening of the\n\nassessment as well as additions on merit before the Ld.\n\nCIT(A). The detailed submissions of the assessee are\n\nreproduced by the Ld. CIT(A), however, the Ld. CIT(A)\n\ndismissed the appeal of assessee.\n\n\n3.        Learned Counsel for the Assessee referred to\n\nproceedings recorded for reopening of the assessment, copy\n\nof which is filed at page-16 of the PB and submitted that\n\nreasons are undated. PB-23 is letter of the assessee dated\n\n06.06.2017 requesting the A.O. to supply copy of the\n\nsanction accorded by Pr. CIT under section 151 along with\n\ncopy of the reasons recorded along with all the Annexures,\n\ncopy of proposal sent for approval and as to when proposal\n\nwas sanctioned and when proposal was received back. The\n\nassessee also asked for copy of the letter of SFIO Dated\n\n05.01.2017 mentioned in the reasons so that the assessee\n                                4\n                                       ITA.No.8066/Del./2019 M/s. Behat\n                                   Holdings Ltd., Daryaganj, Central Delhi.\n\n\nwill be able to file objections against the reopening of the\n\nassessment. PB-41 is letter of the A.O. whereby approval of\n\nthe Pr. CIT have been conveyed to the assessee. PB-42 is\n\nproforma for recording reasons and approval to be granted\n\ndated 09.10.2019. PB-28 is letter of the A.O. dated\n\n27.09.2017 in which it is intimated to the assessee that all\n\nthe facts on the basis of the report of SFIO (Inv.) Wing of the\n\nDepartment have been incorporated in the reasons which\n\nhave been provided to him. Further, copy of the report of\n\nSFIO (Inv.) Wing of the Income Tax Department is\n\nconfidential in nature, therefore, same cannot be provided\n\nor part with as requested by assessee. Learned Counsel for\n\nthe Assessee, therefore, submitted that A.O. has refused to\n\nsupply all the Annexures referred to in the reasons,\n\ntherefore, assessee was not able to file detailed objections to\n\nthe reopening of the assessment. PB-13 is notice under\n\nsection 148 in which A.O. has mentioned that notice have\n\nbeen issued after obtaining necessary satisfaction of Addl.\n\nCIT/Pr. CIT/Pr. CCIT. He has submitted that it is not clear\n\nfrom the notice as to which Authority has granted approval\n                              5\n                                     ITA.No.8066/Del./2019 M/s. Behat\n                                 Holdings Ltd., Daryaganj, Central Delhi.\n\n\nunder section 151 of the I.T. Act. He has referred to PB-43\n\nin which the approval of Addl. Commissioner of Income Tax\n\nis blank and that Pr. Commissioner of Income Tax while\n\ngranting approval has mentioned "Yes, I am satisfied". He\n\nhas submitted that there is no application of mind before\n\ngranting approval and such approval is not find valid by\n\nvarious Courts. The A.O. has not applied his mind to the\n\nfacts and circumstances of the case, therefore, the re-\n\nassessment order is invalid and bad in law. Since complete\n\ncopy of the reasons along with Annexures have not been\n\nsupplied to the assessee, therefore, there is no basis to\n\ninitiate proceedings under section 148 of the I.T. Act.\n\nLearned Counsel for the Assessee relied upon Judgment of\n\nHon'ble Delhi High Court in the case of SABH Infrastructure\n\nLtd., vs. ACIT [2017] 398 ITR 198 (Del.) (HC) in which the\n\nHon'ble Delhi High Court has directed the Revenue\n\nDepartment to adhere to the following guidelines in the\n\nmatter of reopening of the assessment.\n                            6\n                                   ITA.No.8066/Del./2019 M/s. Behat\n                               Holdings Ltd., Daryaganj, Central Delhi.\n\n\n"(i)   while communicating the reasons for reopening the\n\n       assessment, the copy of the standard form used\n\n       by the Assessing Officer for obtaining the approval\n\n       of the Superior Officer should itself be provided to\n\n       the assessee. This would contain the comment or\n\n       endorsement of the Superior Officer with his name,\n\n       designation and date. In other words, merely\n\n       stating the reasons in a letter addressed by the\n\n       Assessing Officer to the assessee is to be avoided.\n\n\n\n(ii)   the reasons to believe ought to spell out all the\n\n       reasons and grounds available with the Assessing\n\n       Officer for reopening the assessment - especially\n\n       in those cases where the first proviso to section\n\n       147 is attracted. The reasons to believe ought to\n\n       also paraphrase any investigation report which\n\n       may form the basis of the reasons and any\n\n       enquiry conducted by the Assessing Officer on the\n\n       same and if so, the conclusions thereof;\n                                      7\n                                              ITA.No.8066/Del./2019 M/s. Behat\n                                          Holdings Ltd., Daryaganj, Central Delhi.\n\n\n       (iii)   where the reasons make a reference to another\n\n               document, whether as a letter or report, such\n\n               document and/or relevant portions of such report\n\n               should be enclosed along with the reasons ;\n\n\n       (iv)    the   exercise   of       considering       the     assessee's\n\n               objections to the reopening of assessment is not a\n\n               mechanical ritual. It is a quasi-judicial function.\n\n               The order disposing of the objections should deal\n\n               with each objection and give proper reasons for the\n\n               conclusion. No attempt should be made to add to\n\n               the reasons for reopening of the assessment\n\n               beyond what has already been disclosed.\n\n\n       20.     The writ petition is allowed in the above terms.\n\n               There will be no order as to costs."\n\n\n3.1.           He    has   submitted        that     since       satisfaction/\n\napproval of Pr.CIT is without application of mind and\n\ngranted in a mechanical manner, therefore, re-assessment\n\norder is invalid. In support of his contention, Learned\n                                        8\n                                                ITA.No.8066/Del./2019 M/s. Behat\n                                            Holdings Ltd., Daryaganj, Central Delhi.\n\n\nCounsel      for     the    Assessee       relied    upon      the     following\n\ndecisions:\n\n\n        01. Chhugamal Rajpal vs., S.P. Chaliha\n                   [1971] 79 ITR 603 (SC)\n        02. CIT vs., M/s. S. Goyanka Lime and Chemicals\n                   Ltd.,    [2015]         231      Taxman           73     (MP).\n                   Department's SLP Dismissed in [2016] 237\n                   Taxman 378 (SC).\n        03. United Electrical Co. (P.) Ltd., [2002] 258 ITR\n                   317 (Del.)\n 04. Yum Restaurants Asia Pte Ltd., vs., DDIT\n                   [2017] 397 ITR 665 (Del.)\n 05. Hirachand Kanuga vs., DCIT [2015] 68 SOT\n                   205 {Mum.).\n\n\n3.2.         He has also relied upon Judgment of Hon'ble\n\nDelhi   High        Court    in   the       case     of    Haryana        Acrylic\n\nManufacturing Company vs., CIT [2009] 308 ITR 38 (Del.)\n\n(HC) in which the assessee challenged the validity of the re-\n\nassessment proceedings under section 147. The Hon'ble\n\nDelhi High court quashed the proceedings inter alia, held\n\nthat "if reasons are not served within the limitation period of\n\nsix years, the proceedings initiated will be illegal". Learned\n                               9\n                                      ITA.No.8066/Del./2019 M/s. Behat\n                                  Holdings Ltd., Daryaganj, Central Delhi.\n\n\nCounsel   for   the   Assessee,   therefore,      submitted         that\n\ninitiation of re-assessment proceedings and approval is\n\ninvalid, bad in Law and as such liable to be quashed.\n4.        On the other hand, Ld. D.R. relied upon the\n\nOrders of the authorities below and submitted that reasons\n\nwere supplied to the assessee. The crux of SFIO (Inv.) Wing\n\nof the Income Tax Department is mentioned in the reasons.\n\nThe approval is valid in law because there is no requirement\n\nto use specific language while granting sanction/approval.\n\nHe has, however, admitted that copy of the report of the\n\nSFIO was not provided to the assessee.\n\n\n5.        We have considered the rival submission and\n\nperused the material on record. It is well settled Law that\n\nvalidity of re-assessment proceedings shall have to be\n\ndetermined with reference to the reasons recorded for\n\nreopening of the assessment. Learned Counsel for the\n\nAssessee filed copy of the reasons recorded for reopening of\n\nthe assessment at pages 16 to 22 of PB. The same reads as\n\nunder:\n 10\n         ITA.No.8066/Del./2019 M/s. Behat\n     Holdings Ltd., Daryaganj, Central Delhi.\n 11\n         ITA.No.8066/Del./2019 M/s. Behat\n     Holdings Ltd., Daryaganj, Central Delhi.\n 12\n         ITA.No.8066/Del./2019 M/s. Behat\n     Holdings Ltd., Daryaganj, Central Delhi.\n 13\n         ITA.No.8066/Del./2019 M/s. Behat\n     Holdings Ltd., Daryaganj, Central Delhi.\n 14\n         ITA.No.8066/Del./2019 M/s. Behat\n     Holdings Ltd., Daryaganj, Central Delhi.\n 15\n         ITA.No.8066/Del./2019 M/s. Behat\n     Holdings Ltd., Daryaganj, Central Delhi.\n 16\n         ITA.No.8066/Del./2019 M/s. Behat\n     Holdings Ltd., Daryaganj, Central Delhi.\n                              17\n                                      ITA.No.8066/Del./2019 M/s. Behat\n                                  Holdings Ltd., Daryaganj, Central Delhi.\n\n\n5.1.      The reasons are un-dated. The A.O. in the\n\nassessment order has reproduced the same reasons without\n\napplication of his mind to the relevant material and\n\nthereafter by referring to notice under section 133(6) and\n\nnon-production of the Directors of the Investor Companies\n\nmade the addition against the assessee. The A.O. in the\n\nreasons has mentioned that information was forwarded by\n\nSerious Fraud Investigation Office, Delhi which were\n\nreceived through Pr. CIT vide Letter Dated 05.01.2017. The\n\nA.O. has also referred to such report based on search and\n\nseizure in the case of third parties. The assessee made a\n\nrequest to the A.O. to supply complete copy of the reasons\n\nalong with Annexures and Report of SFIO Dated 05.01.2017\n\nand approval granted by Pr. CIT. The A.O, however\n\nintimated that since SFIO report is confidential, therefore,\n\nsame cannot be provided to the assessee. Thus, the\n\ncomplete Annexures to the reasons were not provided to the\n\nassessee and A.O. has also failed to provide copy of the\n\nreport dated 05.01.2017 to the assessee which is the basis\n\nfor reopening of the assessment. Assessee cannot be given\n                               18\n                                       ITA.No.8066/Del./2019 M/s. Behat\n                                   Holdings Ltd., Daryaganj, Central Delhi.\n\n\nsurprise to file objections without providing all the relevant\n\nmaterial. The report Dated 05.01.2017 is the basis for\n\nreopening of the assessment and since it is not confronted\n\nand provided to assessee, the assessee may not be able to\n\nfile proper objections to the reopening of the assessment.\n\nThus,   the   direction   given    in     the     case      of    SABH\n\nInfrastructure Ltd., vs., ACIT (supra), have not been applied\n\nbecause it is the duty of the A.O. to provide all the\n\ndocuments and reports which are part of the reasons to the\n\nassessee before taking steps into the matter. Further the\n\nAddl. CIT while granting or forwarding copy of the reasons\n\nto the Pr. CIT for his approval did not mention any fact in\n\nthe proforma which is blank and no remarks have been\n\nmentioned by him despite his signature appeared thereon.\n\nThe Pr. CIT while granting sanction/approval to reasons\n\nrecorded for reopening of the assessment has simply\n\nmentioned "Yes, I am satisfied". Such type of approval was\n\nnot found valid in many cases. The ITAT Delhi C-Bench in\n\nthe case of M/s. Ganesh Ganga Investments Pvt. Ltd., Delhi\n\nvs., ITO, Ward-10(1), New Delhi in ITA.No.1579/Del./2019\n                                19\n                                        ITA.No.8066/Del./2019 M/s. Behat\n                                    Holdings Ltd., Daryaganj, Central Delhi.\n\n\nfor the A.Y. 2010-2011 vide Order Dated 07.11.2019\n\nquashed the reopening of the assessment in the similar\n\ncircumstances. The entire order is reproduced as under :\n        "IN THE INCOME TAX APPELLATE TRIBUNAL\n               DELHI BENCHES "C": DELHI\n\n    BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER\n                       AND\n   SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER\n\n                  ITA.No.1579/Del./2019\n                Assessment Year 2010-2011\n\nM/s. Ganesh Ganga                   The Income Tax Officer,\nInvestments Pvt. Ltd.,              Ward - 10 (1), Room\nA-52, Top Floor, Street        vs., No.206A, C.R. Building, I.P.\nNo.1, Gurunanakpura,\n                                    Estate, New Delhi.\nLaxmi Nagar, Delhi-110 092.\n                                    PIN - 110 002.\nPAN AAACG2710J\n        (Appellant)                            (Respondent)\n\n                              Shri Raj Kumar, C.A. And\n               For Assessee : Shri Rajeev Ahuja, Advocate\n                              Shri Sumit Goel, C.A.\n               For Revenue : Ms. Parmit M. Biswas, CIT-DR\n\n            Date of Hearing : 10.10.2019\n      Date of Pronouncement : 07.11.2019\n\n                              ORDER\n\nPER BHAVNESH SAINI, J.M.\n                                20\n                                        ITA.No.8066/Del./2019 M/s. Behat\n                                    Holdings Ltd., Daryaganj, Central Delhi.\n\n\n             This appeal by Assessee has been directed\n\nagainst the Order of the Ld. CIT(A)-4, New Delhi, Dated\n\n26.12.2018, for the A.Y. 2010-2011.\n\n\n2.           Briefly the facts of the case are that assessee\n\ncompany filed its return of income on 04.02.2011 for the A.Y.\n\n2010-2011 declaring loss of Rs.9,616/- which was processed\n\nunder section 143(1) of the I.T. Act, 1961. The assessee\n\ndeclared income from brokerage and commission, interest on\n\nloan and profit on sale of investment also.\n\n\n2.1.         An information was received from the O/o. CIT,\n\nCentral-2,    New   Delhi,   vide    letter     Dated      14.02.2014\n\nmentioning therein that a search/survey operation under\n\nsection 132/133A of the Income Tax Act, 1961 was\n\nconducted by the Investigation Wing at the business and\n\nresidential premises of Shri Himanshu Verma and his Group\n\non 29.03.2012 wherein after intensive and extensive inquiry\n\nand examination of documents seized during the course of\n\nsearch, it has been gathered that the said persons are\n\ninvolved in providing accommodation entries to the persons\n\nwho were named in the report. During the course of inquiry\n                              21\n                                      ITA.No.8066/Del./2019 M/s. Behat\n                                  Holdings Ltd., Daryaganj, Central Delhi.\n\n\nmade by the Investigation Wing, it also came to the notice\n\nthat Shri Himanshu Verma was engaged in the business of\n\nproviding accommodation entries through cheques/PO/DD in\n\nlieu of cash to large number of beneficiary companies through\n\nvarious paper and dummy companies floated and controlled\n\nby him. The cash received from the parties for providing\n\naccommodation entries was first deposited in the account of\n\nthese dummy firms/companies in the guise of cash received\n\nagainst the bogus sales duly shown in the books of account.\n\nOn the basis of the material available on record, the A.O.\n\nafter recording reasons for reopening of the assessment,\n\nissued notice under section 148 to the assessee on\n\n31.03.2017 which was served upon the assessee.                      The\n\nassessee objected to the reopening of the assessment and\n\nrequested to provide copy of the approval of Competent\n\nAuthority under section 151 of the I.T. Act, 1961. The\n\nAssessee also contended that whatever material was\n\ncollected at the back of the assessee was not confronted and\n\nrequested to supply statement of Shri Himanshu Verma,\n\nreport and data complied / received from Investigation Wing,\n                                     22\n                                              ITA.No.8066/Del./2019 M/s. Behat\n                                          Holdings Ltd., Daryaganj, Central Delhi.\n\n\nreport and data complied/received by ITO, Ward-10(1), New\n\nDelhi, diaries and registers considered as incriminating\n\nmaterial seized from Shri Himanshu Verma and any other\n\ndocuments which Department wanted to rely. It was further\n\nsubmitted that proceedings under section 147/148 of the I.T.\n\nAct, cannot be invoked for making inquiry or verification\n\npurposes. The assessee denied receipt of any accommodation\n\nentry from any such person. The A.O, however, rejected the\n\nobjections     of   the   assessee        and      proceeded        to    make\n\nassessment in the matter. The A.O. noted that in assessment\n\nyear under appeal, assessee has received Rs.11,05,00,000/-\n\non account of share capital and share premium from 38\n\nparties   as    noticed    during        the   course      of    assessment\n\nproceedings. The summary of the same is reproduced in the\n\nassessment order. The assessee was asked to file complete\n\npostal address, PAN and other details of these 38 parties.\n\nThe A.O. also issued notice under section 133(6) to all 38\n\nshare subscriber companies and asked for the details from\n\nthem. The A.O. received replies from 26 companies. In 06\n\ncases, although notice issued under section 133(6) of the I.T.\n                               23\n                                       ITA.No.8066/Del./2019 M/s. Behat\n                                   Holdings Ltd., Daryaganj, Central Delhi.\n\n\nAct were issued as per new name as well as old name of the\n\ncompany, but, the same were returned back un-served by the\n\nPostal Authorities. In the remaining 06 cases, no replies have\n\nbeen received. The A.O. noted that replies received from 26\n\nparties under section 133(6) have been analysed and these\n\ncompanies furnished copy of the acknowledgment of ITR,\n\nbalance sheet as on 31.03.2010, P & L A/c, copy of the bank\n\nstatement. The A.O. however, did not accept the replies filed\n\nby the 26 investor companies on the reasons that replies\n\nhave been received in bunch for similar style of envelopes\n\nand posted from three post offices. The A.O. also noted that\n\nnone of the parties explained as to why high premium was\n\npaid and parties have not explained source of the investment.\n\nThe A.O. also noted that 26 parties filed copy of the ITR,\n\nbalance sheet, P & L A/c and bank statement, but, it shows\n\nthat their income shown is very meagre in the return of\n\nincome.   The   assessee    was      asked       to    produce        the\n\npersons/Principal Officers of these entities for verification.\n\nHowever, assessee did not produce the same. The A.O. also\n\nanalysed the statement of Shri Himanshu Verma through\n                                24\n                                        ITA.No.8066/Del./2019 M/s. Behat\n                                    Holdings Ltd., Daryaganj, Central Delhi.\n\n\nwhom amount have been received and the A.O. ultimately\n\nrejected the explanation of assessee on genuine share\n\napplication money received from 38 parties and made\n\naddition of Rs.11.05 crores. The A.O. further noted that\n\nassessee has paid commission in cash for arranging these\n\nentries, on which, addition was made of Rs.22,10,000/- i.e.,\n\n@ 2% of the amount in question which was also added to the\n\nreturned income.\n\n\n3.         The assessee challenged the reopening of the\n\nassessment as well as additions on merit before the Ld.\n\nCIT(A).   It was contended that assessment framed on the\n\nbasis of material / documents / information received from\n\nthird party and without application of mind by the A.O,\n\ntherefore, whole assessment is invalid and bad in law. It was\n\nfurther submitted that assessee has shown all the amounts\n\nin his books of account and return of income filed with the\n\nDepartment. The A.O. has reopened the assessment by\n\nmentioning in the reasons that assessee has received entries\n\nof Rs.2.45 crores which fact is incorrect. The initiation of re-\n\nassessment have been made merely on the basis of\n                               25\n                                       ITA.No.8066/Del./2019 M/s. Behat\n                                   Holdings Ltd., Daryaganj, Central Delhi.\n\n\nInvestigation Wing report without applying the mind. No right\n\nof cross-examination have been provided to the assessee to\n\nthe statement of Shri Himanshu Verma and others. The\n\nassessee relied upon the following decisions.\n\n\n3.1.      In the case of Pr. CIT vs., RMG Polyvinyl (I) Ltd.,\n\n396 ITR 5 (Del.) the Hon'ble Delhi High Court held as under:\n          "In the present case too, the information received\n\n          from the Inv. Wing cannot be said to be tangible\n\n          material per se without a further enquiry being\n\n          undertaken by the learned assessing officer"\n\n3.2.      In the case of Pr. CIT vs., Meenakshi Overseas (P)\n\nLtd., 395 ITR 677 (Del.), the Hon'ble Delhi High Court held as\n\nunder :\n\n\n          "Reassessment       notice       condition         precedent\n\n          recording of reasons to believe that income has\n\n          escaped     assessment       mere       reproduction          of\n\n          investigation report in reasons recorded absence of\n                               26\n                                       ITA.No.8066/Del./2019 M/s. Behat\n                                   Holdings Ltd., Daryaganj, Central Delhi.\n\n\n          link between tangible material and formation of\n\n          ceding illegal Income Tax Act, 1961, Sec.147, 148"\n\n\n3.3.      In the case of Pr. CIT vs., G And G Pharma India\n\nLtd., [2016] 384 ITR 147 (Del.), the Hon'ble Delhi High Court\n\nheld as under :\n\n\n          "Reassessment condition precedent application of\n\n          mind by assessing officer to materials prior to\n\n          forming reason to believe income has escaped\n\n          assessment - No independent application of mind\n\n          to   information   received      from      Directorate        of\n\n          Investigation and no prima facie opinion formed-\n\n          reassessment order invalid".\n\n\n3.4.      In the case of Sarthak Securities Co. (P) Ltd., 329\n\nITR 110 (Del.), the Hon'ble Delhi High Court held as under :\n\n\n          "No independent application of mind by the\n\n          Assessing officer but acting under information\n\n          from Inv. Wing - Notice U/s. 147 to be quashed".\n\n\n3.5.      The assessee also submitted that assessment is\n\nbarred by time. The assessee further submitted that approval\n                               27\n                                       ITA.No.8066/Del./2019 M/s. Behat\n                                   Holdings Ltd., Daryaganj, Central Delhi.\n\n\nunder section 151 have been granted in a most mechanical\n\nmanner without applying independent mind by the Pr.\n\nCommissioner of Income Tax. He has submitted that Pr.\n\nCommissioner of Income Tax has recorded in the approval as\n\nunder :\n\n\n"Form for recording the reasons for initiating proceedings u/s\n\n147 and for obtaining the approval of the Ad CIT/CIT/CBDT\n\n\n                                               M/s. Ganesh\n                                               Ganga Investment\n1.    Name and address of the                  P. Ltd., A-52, Top\n      assessee                                 Floor Street No.l,\n                                               Guru Nanak\n                                               Pura, Laxmi Nagar,\n                                               Delhi\n                                               110092\n2.    PAN                                         AAACG2710J\n3.    Status                                        Company\n4.    Ward/Circle                                   Ward-10(1)\n5.    Asstt. Year in respect of which it\n                                                       2010-11.\n      is proposed to issue notice u/s\n      148\n6.    The quantum of income which has Rs.2,45,00,000/-\n      escaped assessment\n7.    Whether the provisions of section\n                                                        147(b)\n147(a) or 147(b) are applicable or\n      both the sections are applicable.\n                                   28\n                                           ITA.No.8066/Del./2019 M/s. Behat\n                                       Holdings Ltd., Daryaganj, Central Delhi.\n\n\n8.    Whether the assessment is\n      proposed to be made for the first                       Yes\n      time. If the reply is affirmative,\n      please state\n          (a) Whether any voluntary\n             return has already been                          Yes\n\n             filed.\n          (b) If so, the date of filing of               04.02.2011\n             return\n\n\n9.    If answer to item 8 is negative,\n      please state\n(a)   Income originally assessed                               NA\n      Whether it is a case of under\n      assessment, at lower rate,\n(b)                                                            NO\n      assessment which has been made\n      the subject of excessive relief or\n      allowing excess loss/depreciation.\n      Whether the provision of Sec. 150(1)\n      are applicable. If the reply is in\n      affirmative the relevant facts may be\n      stated against Item No. 11 and 8\n10.                                                            NO\n      may also be brought out that the\n      provisions of Sec. 150(2) would not\n      stand in the way of initiating\n      proceedings u/s. 147.\n11.   Reasons for the belief that the                As per annexure.\n                                   29\n                                           ITA.No.8066/Del./2019 M/s. Behat\n                                       Holdings Ltd., Daryaganj, Central Delhi.\n\n\n       income has escaped assessment.\n\n                                                Sd/- H.K. Sharma\nDated: 29.03.2017.                     ITO, Ward-10(1), New Delhi.\n\n       Whether the Addl. Commissioner\n       of I. Tax is satisfied on the               In view of the facts\n12.    reasons recorded by the ITO that            notice u/s.148 to\n       it is a fit case for the issue of           be issued.\n       notice u/s.148.\n\n13.    Whether the Pr. Commissioner of I. Yes I am satisfied\n       Tax is satisfied on the reasons             that it is a fit case\n       recorded by the ITO that it is a fit        for issue of notice\n       case for the issue of notice                u/s.148 of the I.T.\n       u/s.148.                                    Act, 1961.\n\n\n                                                         Sd/-S.K. Mittal,\n                          Pr. Commissioner of I. Tax, New Delhi."\n\n\n3.6.        This approval is not valid in Law because it would\n\nshow that approval have been granted without application of\n\nmind. Learned Counsel for the Assessee relied upon\n\nJudgment of the Hon'ble Delhi High Court in the case of\n\nUnited Electrical Co. Pvt. Ltd., vs. Commissioner of Income\n\nTax 258 ITR 317 in which approval by Addl. Commissioner of\n                               30\n                                       ITA.No.8066/Del./2019 M/s. Behat\n                                   Holdings Ltd., Daryaganj, Central Delhi.\n\n\nIncome Tax under section 151 was given in the following\n\nterms - "Yes" I am satisfied that it is a fit case for issue of\n\nnotice under section 148 of the I.T. Act." The Hon'ble Delhi\n\nHigh Court considering the similarly worded approval did not\n\napprove the same and held that "in the present case, there\n\nhas been no application of mind by Addl. Commissioner of\n\nIncome Tax before granting the approval." The assessee also\n\nrelied upon Judgment of Hon'ble Supreme Court in the case of\n\nCommissioner of Income Tax vs., S. Goyanka Lime &\n\nChemical Ltd., [2015] 64 taxmann.com 313 (SC) approving\n\nthe Judgment of Hon'ble Madhya Pradesh High Court in the\n\ncase of Commissioner of Income Tax, Jabalpur vs., S.\n\nGoyanka Lime & Chemical Ltd., [2015] 56 taxmann.com 390\n\n(M.P.) in which the Departmental SLP has been dismissed on\n\nthe same reason because the Joint Commissioner of Income\n\nTax recorded satisfaction in a mechanical manner and\n\nwithout application of mind. The assessee also relied upon\n\nJudgment of Hon'ble Madhya Pradesh High Court in the case\n\nof Arjun Singh vs., ADIT [2000] 246 ITR 363 (M.P.) in which\n\nalso similarly worded sanction under section 148 was not\n                               31\n                                       ITA.No.8066/Del./2019 M/s. Behat\n                                   Holdings Ltd., Daryaganj, Central Delhi.\n\n\nfound valid. The assessee also relied upon Judgment of\n\nHon'ble Delhi High Court in the case of Pr. Commissioner of\n\nIncome Tax vs., N.C. Cables Ltd., [2017] 88 taxmann.com 649\n\n(Del.) in which also on similarly worded sanction, it was held\n\nthat re-assessment was not valid. The assessee also\n\nsubmitted that since no right of cross-examination have been\n\nallowed to the statement of Shri Himanshu Verma, therefore,\n\nsuch statement cannot be read in evidence against the\n\nassessee. He has relied upon Judgment of Hon'ble Supreme\n\nCourt in the case of M/s. Andaman Timber Industries vs.,\n\nCommissioner of Central Excise, Kolkata-II reported in 281\n\nCTR 241.\n\n\n4.         The Ld. CIT(A), however, did not accept the\n\ncontention of assessee and confirmed the reopening of the\n\nassessment. The assessee also made submissions on merit\n\nto show that addition is wholly unjustified. However, the Ld.\n\nCIT(A) did not accept the contention of assessee and upheld\n\nthe addition on merit as well. The appeal of assessee was\n\naccordingly dismissed.\n                               32\n                                       ITA.No.8066/Del./2019 M/s. Behat\n                                   Holdings Ltd., Daryaganj, Central Delhi.\n\n\n\n\n5.        The assessee in the present appeal challenged the\n\nreopening of the assessment under section 147/148 of the\n\nI.T. Act, 1961, on several grounds, addition of Rs.11.05\n\ncrores under section 68 of the I.T. Act and addition of\n\nRs.22,10,000/- on account of commission.\n\n\n6.        We have heard the Learned Representatives of\n\nboth the parties. Learned Counsel for the Assessee reiterated\n\nthe submissions made before the authorities below and\n\nreferred to reasons recorded in this case for reopening of the\n\nassessment, copy of which is filed at page-15 of the PB. PB-\n\n29 is approval/sanction granted by the Pr. Commissioner of\n\nIncome Tax, New Delhi. PB-6 is balance-sheet to show that in\n\npreceding assessment year the share capital was of Rs.3.01\n\ncrores and in assessment year in increased to Rs.14.06\n\ncrores. Thus, about Rs.11 crores have increased and this fact\n\nwas also disclosed to the Revenue Department. Such details\n\nare filed in the return of income. No verification could be\n\nallowed in the garb of proceedings under section 148 of the\n                              33\n                                      ITA.No.8066/Del./2019 M/s. Behat\n                                  Holdings Ltd., Daryaganj, Central Delhi.\n\n\nIncome Tax Act, 1961. The name of              M/s. Management\n\nServices Pvt. Ltd., in the reason from whom alleged entry\n\nhave been taken by the assessee do not figure in the\n\nappellate order because such party does not exist. M/s.\n\nShubh Propbuild Pvt. Ltd., has been mentioned in the reasons\n\ndo not belong to Shri Himanshu Verma. In assessment order\n\nname of M/s. Management Services Pvt. Ltd., do not appear.\n\nPB-13 of the assessment order referred to the statement of\n\nShri Himanshu Verma in which name of M/s. Shubh\n\nPropbuild Pvt. Ltd., does not appear. The A.O, therefore,\n\nrecorded incorrect reasons and did not apply his mind to the\n\nmaterial on record. The A.O. has not gone through the record\n\nand the balance Company do not belong to the assessee. The\n\nstatement of Shri Himanshu Verma was not subjected to\n\ncross-examination on behalf of assessee, despite making a\n\nrequest to the A.O. [PB-19]. In the statement of Shri\n\nHimanshu Verma filed on record, no such companies have\n\nbeen mentioned, therefore, no adverse inference could be\n\ndrawn against the assessee. The assessee did not receive\n\nany notice for production of the parties before A.O. There is\n                                 34\n                                         ITA.No.8066/Del./2019 M/s. Behat\n                                     Holdings Ltd., Daryaganj, Central Delhi.\n\n\nno evidence on record of any payment of commission paid by\n\nassessee for arranging share capital. Learned Counsel for the\n\nAssessee relied upon Order of the ITAT, Delhi Bench in the\n\ncase    of   Pioneer   Town   Planners       Pvt.    Ltd.,    vs.      DCIT\n\nITA.No.132/Del./2018 Dated 06.08.2018 in which in similar\n\ncircumstances the re-assessment have been quashed which\n\ncase also relates to entry provided by Shri Himanshu Verma.\n\nLearned Counsel for the Assessee submitted that the A.O.\n\nissued notices to all the parties under section 133(6) of the\n\nI.T. Act. In response to the same, 26 parties filed reply\n\nsupported by documentary evidences to prove genuine share\n\napplication money have been received. The A.O. did not take\n\nhelp of any handwriting export before forming any opinion. If\n\nreplies were not in order, assessee should have been\n\nconfronted with the material so that assessee could rebut the\n\nsame. Therefore, such fact could not be taken adversely\n\nagainst the assessee. The assessee never received notice\n\nDated    11.12.2017     for   production      of    the      parties     for\n\nexamination. In reasons 06 parties are mentioned which\n\nbelong to Shri Himanshu Verma, but, in his statement he\n                                35\n                                         ITA.No.8066/Del./2019 M/s. Behat\n                                     Holdings Ltd., Daryaganj, Central Delhi.\n\n\nsays 08 parties, but, the A.O. made addition for 38 parties.\n\nA.O. made the addition only on the statement of Shri\n\nHimanshu Verma, but, the parties did not belong to him.\n\nLearned Counsel for the Assessee submitted that since\n\napproval is not in accordance with Law, therefore, reopening\n\nof the assessment is bad in Law and relied upon the same\n\nJudgments as were relied upon before Ld. CIT(A). He has\n\nsubmitted that A.O. did not apply his mind to the reasons\n\nand recorded incorrect facts and approval is also given on\n\nincorrect facts. The initiation and approval on the basis of\n\nwrong facts is not legally valid. He has relied upon Judgment\n\nof Hon'ble Delhi High Court in the case of Commissioner of\n\nIncome Tax vs., Kamdhenu Steel & Alloys Ltd., 248 CTR 33\n\nand other decisions as was relied upon before the authorities\n\nbelow. The amount received from 30 companies is Rs.8.13\n\ncrores only out of total amount of Rs.11.05 crores. Therefore,\n\nthere is no other material on record to justify the addition. He\n\nhas submitted that A.O. cannot ask to explain source of the\n\nsource.   Learned   Counsel    for     the    Assessee,        therefore,\n                               36\n                                       ITA.No.8066/Del./2019 M/s. Behat\n                                   Holdings Ltd., Daryaganj, Central Delhi.\n\n\nsubmitted that reopening of the assessment is invalid and no\n\naddition could be made against the assessee even on merits.\n7.        The Ld. D.R. on the other hand relied upon the\n\nOrders of the authorities below and submitted that A.O. dealt\n\nwith the objections of the assessee, but, for re-assessment\n\nproceedings no manner is provided as to how sanction is to\n\nbe granted. A.O. recorded details in the reasons on which Pr.\n\nCommissioner of Income Tax was satisfied. Therefore,\n\nreopening of the assessment is valid because information\n\nwas received from Investigation Wing that assessee has\n\nreceived accommodation entries. The name of assessee was\n\nappearing. Sufficiency of reasons is not required at this stage\n\nof formation of re-assessment proceedings. The A.O. cannot\n\ndo any roving enquiry at initial stage. The assessee failed to\n\nprove creditworthiness of the Investor Companies as they\n\nwere having meagre income. The assessee did not prove\n\ngenuineness of the transaction in the matter. The A.O. made\n\nenquiry from Investors and assessee did not produce parties\n\nbefore A.O. Even a premium have been charged for allotment\n\nof shares for which no reasons have been explained. The\n                               37\n                                       ITA.No.8066/Del./2019 M/s. Behat\n                                   Holdings Ltd., Daryaganj, Central Delhi.\n\n\ncompanies are having meagre income only. Apart from\n\nstatement of Shri Himanshu Verma, there is enough material\n\nto justify the addition on merit. The assessee also did not\n\nprove identity and creditworthiness of the Investors even if no\n\ncross-examination to the statement of Shri Himanshu Verma\n\nhave been allowed. The Ld. D.R. relied upon Judgment of\n\nHon'ble Supreme Court in the case of Raymond Woollen Mills\n\n236 ITR 34 (SC). He has submitted that information is prima\n\nfacie relevant and there is sufficient material on record to\n\njustify the initiation of re-assessment proceedings. The\n\nassessee failed to prove that no notice Dated 11.12.2017\n\nhave been received. The Ld. D.R. relied upon the following\n\ndecisions.\n\n\n1.    PCIT vs., Paramount Communication (P.) Ltd., 2017-\n      TIOL-253-SC-IT.\n\n2.    PCIT vs., Paramount Communication (P.) Ltd., [2017]\n      392 ITR 444 (Del.) (HC)\n\n3.    Aradhna Estate (P.) Ltd., vs.              DCIT      [2018]      91\n      taxmann.com 119 (Gujarat) (HC).\n\n4.    Pushpak Bullion (P.) Ltd., vs. DCIT [2017] 85\n      taxmann.com 84 (Gujarat) (HC).\n5.    Ankit Financial Services Ltd., vs. DCIT [2017] 78\n      taxmann.com 58 (Gujarat) (HC).\n                               38\n                                       ITA.No.8066/Del./2019 M/s. Behat\n                                   Holdings Ltd., Daryaganj, Central Delhi.\n\n\n\n6.    Aaspas Multimedia Ltd., vs.               DCIT      [2017]       83\n      taxmann.com 82 (Gujarat) (HC).\n\n7.    Ankit Agrochem (P.) Ltd., vs.              JCIT      [2018]      89\n      taxmann.com 45 (Rajasthan) (HC).\n\n8.    Yogendrakumar Gupta vs., ITO [2014] 227 Taxman 374\n      (SC).\n\n\n8.         We have considered the rival submissions. It is\n\nwell settled Law that validity of re-assessment proceedings is\n\nto be examined with reference to the reasons recorded for\n\nreopening of the assessment. The Counsel for Assessee has\n\nfiled copy of the reasons recorded for reopening of the\n\nassessment at Page-15 of the Paper Book which reads as\n\nunder :\n\n\n          "M/s. Ganesh Ganga Investments Pvt. Ltd.,\n\n\n               PAN AAACG2710J A.Y. 2010-11\n\n\n           The assessee filed return of income for the A.Y.\n\n       2010-11 on 04.02.2011 declaring loss of Rs.(-)\n\n       14,162/-. The return was processed u/s 143(1).\n                          39\n                                  ITA.No.8066/Del./2019 M/s. Behat\n                              Holdings Ltd., Daryaganj, Central Delhi.\n\n\n    Information was forwarded to this office through\n\nthe Addl.CIT, Range-10, New Delhi that search &\n\nseizure action was conducted by Inv. Wing at the office\n\nof Sh. Himanshu Verma where various incriminating\n\ndocuments/materials were seized during the course of\n\nsearch. During the post search investigation and\n\nperusal of seized documents it was observed that Sh.\n\nHimanshu Verma was engaged in the business of\n\nproviding    accommodation-'       entries       by     providing\n\ncheques/PO/DD in lieu of cash to a large number of\n\nbeneficiary companies thorough various paper and\n\ndummy companies floated and controlled by them. It\n\nwas also evidently established by the Investigation\n\nWing that Sh Himanshu Verma is known entry\n\nproviders and is the actual controller of more than 100\n\ncompanies/proprietary firms/partnership firms. They\n\ncontrol these entities through various persons by\n\nappointing   them   as    directors/partners/proprietors\n\napart from nominating them as authorized signatories\n\nfor maintaining the bank accounts of these entities but\n                          40\n                                  ITA.No.8066/Del./2019 M/s. Behat\n                              Holdings Ltd., Daryaganj, Central Delhi.\n\n\nin fact all these persons act only as their stooges. The\n\ncash received from the recipient parties for providing\n\nthe accommodation entries was first deposited in the\n\naccounts of these dummy firms/companies in the\n\ndisguise of the cash received against the bogus sales,\n\nduly shown in the books of accounts. From there, this\n\ncash was transferred to the different paper companies\n\nfloated by Sh. Himanshu Verma through a complex\n\ntrail of transactions, so as to hide the actual sources of\n\nfunds of the last set of recipient companies of Sh.\n\nHimanshu Verma\n\n\n    In this way, the reserve & surpluses and the\n\ncapital account of a specific set of companies are\n\nenhanced with the help of the unexplained cash\n\nreceived by Himanshu Verma, which is routed to these\n\ncompanies through their dummy firm/companies. Once\n\nthe funds of these companies have been enhanced\n\nsufficiently, accommodation entries through RTGS/\n\nCheque in the shape of the share capital, capital gains\n\nor loans as per the specific requirement of the recipient\n                             41\n                                     ITA.No.8066/Del./2019 M/s. Behat\n                                 Holdings Ltd., Daryaganj, Central Delhi.\n\n\n   clients were provided to them in lieu of the cash\n\n   received from them. In this way, the chain for providing\n\n   an accommodation entry gets completed.\n\n\n        It is noticed from the list of entries that the\n\n   assessee M/s Ganesh Ganga Investment P. Ltd. has\n\n   taken following accommodation entries during the\n\n   financial year 2009-10 :-\n\nS.No.       Amount       Conduit companies through which\n                         cheque issued.\n  1.          4000000    Shubh Propbuild P Ltd.,\n  2.          4000000    Jaguar Softech P. Ltd.,\n  3.          4000000    Join Fashion P. Ltd.,\n  4.          4500000    Management Services P. Ltd.,\n  5.          4000000    Greenvision Construction P. Ltd.,\n  6.          4000000    USK Exim P. Ltd.,\nTOTAL    2,45,00,000/-\n\n        On the basis of the reports received from the\n\n    Investigation Wing, I have downloaded the return from\n\n    the ITD portal and verified the records and it is clear\n\n    that the assessee company has not disclosed fully and\n\n    truly all material facts necessary for its assessment for\n\n    the assessment year under consideration as it emerges\n\n    that transactions shown in the return are not genuine.\n\n    Apart from the above the assessee company is not\n                               42\n                                       ITA.No.8066/Del./2019 M/s. Behat\n                                   Holdings Ltd., Daryaganj, Central Delhi.\n\n\n doing any real business and keeping in view the huge\n\n investments, disallowances u/s 14A read with rule 8D\n\n also applicable in the case. The statement given by\n\n Shri Himanshu Verma also establishes the link with\n\n the self-confessed "accommodation entry providers",\n\n whose business is to help assessees bring back their\n\n unaccounted money into their books of account. Thus,\n\n there is a direct link between the information/available\n\n with      the   department        and     the    income       escaping\n\n assessment.\n\n        I have, therefore, reasons to believe that income\n\nto   the    extent   of   Rs.2,45,00,000/-             has      escaped\n\nassessment relevant to A.Y.2010-11. Thus, the same is\n\nto be brought to tax under section 147/148 of the I.T.\n\nAct 1961.\n\n\n     Moreover, as the case pertains to a period beyond\n\nfour years from the end of relevant assessment year, for\n\nissuing the notice u/s 148, necessary approval /\n\nsanction     may     kindly        be    accorded       by     the     Pr.\n                                  43\n                                          ITA.No.8066/Del./2019 M/s. Behat\n                                      Holdings Ltd., Daryaganj, Central Delhi.\n\n\n       Commissioner of Income Tax, Delhi-4, New Delhi in view\n\n       of   the   amended    provision      of    section      151     w.e.f\n\n       01.06.2015.\n\n                                           Sd/- H.K. Sharma,\n       Dated : 27.03.2017.            ITO, Ward-10(1), New Delhi."\n\n\n\n8.1.         PB-29 is the sanction granted by Pr. Commissioner\n\nof Income Tax for reopening of the assessment in which it is\n\nmentioned as under :\n\n\n       Whether the Pr. Commissioner of I. Yes I am satisfied\n       Tax is satisfied on the reasons            that it is a fit case\n13.    recorded by the ITO that it is a fit       for issue of notice\n       case for the issue of notice               u/s.148 of the I.T.\n       u/s.148.                                   Act, 1961.\n\n\n                                                 Sd/-S.K. Mittal,\n                         Pr. Commissioner of I. Tax, New Delhi."\n\n\n8.2.         Learned Counsel for the Assessee relied upon\n\nJudgment of Hon'ble Delhi High Court in the case of United\n\nElectricals Company (supra) in which the Addl. Commissioner\n\nof Income Tax similarly recorded the approval "Yes" I am\n\nsatisfied that it is a fit case for issue of notice under section\n                               44\n                                       ITA.No.8066/Del./2019 M/s. Behat\n                                   Holdings Ltd., Daryaganj, Central Delhi.\n\n\n148 of the I.T. Act." In this case the Hon'ble Delhi High Court\n\nheld as under :\n\n\n          "On a careful perusal of the statement made by V'\n\n          it was found that facts mentioned in reasons were\n\n          de hors the facts available on record. It was\n\n          evident that the said statement was too general. It\n\n          did not mention any name much less the name of\n\n          the assessee. It was not the stand of the revenue\n\n          that a list of the creditors, which included the\n\n          name of the assessees, was furnished by V'\n\n          subsequently and the same was forwarded to the\n\n          Assessing Officer of the assessee. Applying the\n\n          aforenoted settled principles governing an action\n\n          under section 147, there could be no hesitation in\n\n          holding that there was no information on record\n\n          which could provide foundation for the Assessing\n\n          Officer's belief that the assessee's transaction with\n\n          'V' Ltd. was not genuine and its income had\n\n          escaped assessment on that account. Therefore,\n\n          the impugned action of the Assessing Officer could\n                    45\n                            ITA.No.8066/Del./2019 M/s. Behat\n                        Holdings Ltd., Daryaganj, Central Delhi.\n\n\nnot be sustained. Even the Addl Commissioner\n\nhad accorded his approval for action under section\n\n147 mechanically. If the Addl. Commissioner had\n\ncared to go through the statement of said V\n\n'perhaps he would not have granted his approval,\n\nwhich is mandatory in terms of proviso to sub-\n\nsection (1) of section 151 as the action under\n\nsection 147 was being initiated after the expiry of\n\nfour years from the end of the relevant assessment\n\nyear.   The   Legislature     has     provided        certain\n\nsafeguards to prevent arbitrary exercise of powers\n\nby an Assessing Officer particularly after a lapse\n\nof substantial time from completion of assessment.\n\nThe power vested in the Commissioner to grant or\n\nnot to grant the approval is coupled with a duty.\n\nThe Commissioner is required to apply his mind to\n\nthe proposal put up to him for approval in the light\n\nof the material relied upon by the Assessing\n\nOfficer. The said power cannot be exercised\n\ncasually and in a routine manner. In the instant\n                                 46\n                                         ITA.No.8066/Del./2019 M/s. Behat\n                                     Holdings Ltd., Daryaganj, Central Delhi.\n\n\n          case, there had been no application of mind by the\n\n          Addl. Commissioner before granting the approval.\n\n                  The petition was, thus, allowed and impugned\n\n          notice was quashed."\n\n\n8.3.      The      Hon'ble   Supreme        Court      approving        the\n\nJudgment of Hon'ble Madhya Pradesh High Court in the case\n\nof Commissioner of Income Tax, Jabalpur (MP) vs., S.\n\nGoyanka Lime & Chemicals Ltd., [2015] 46 taxmann.com 313\n\nheld as under :\n\n\n          "SLP dismissed against High Court's ruling that\n\n          where Joint Commissioner recorded satisfaction in\n\n          mechanical manner and without application of\n\n          mind to accord sanction for issuing notice under\n\n          section     148,   reopening       of    assessment          was\n\n          invalid."\n\n\n8.4.      Similar view have been taken by Hon'ble Madhya\n\nPradesh High Court in the case of Mr. Arjun Singh vs., Asst.\nDirector of Income Tax [2000] 246 ITR 363 (MP) (supra), copy\n\nof which is filed at page-97 of the paper book. The ITAT, Delhi\n                                 47\n                                         ITA.No.8066/Del./2019 M/s. Behat\n                                     Holdings Ltd., Daryaganj, Central Delhi.\nBench in the case of M/s. Pioneer Town Planners Pvt. Ltd.,\n\nvs., DCIT (supra) in paras 7 to 22 on similar facts relating to\n\nentry provider Shri Himanshu Verma held as under :\n    "7.   Apropos these legal grounds , we have heard the\n\n          arguments of both sides and carefully perused the\n\n          relevant material placed on the record of the\n\n          Tribunal. As agreed by both the parties, we have\n\n          heard argument of both the sides on these legal\n\n          grounds of the assessee, wherein the assessee\n\n          has challenged to the initiation of reassessment\n\n          proceedings and reopening of assessment u/s.\n\n          147/148 of the Act. The ld. AR submitted that the\n\n          impugned order of assessment is invalid and\n\n          unsustainable in law as the same has been\n\n          passed    by    the    AO       without       providing       the\n\n          reasonable time of four weeks for taking remedy\n\n          against the order of disposal of preliminary\n\n          objection against the incorrect assumption of\n\n          jurisdiction by the AO u/s. 147 of the Act in\n\n          violation of principles enunciated by Bombay High\n                             48\n                                     ITA.No.8066/Del./2019 M/s. Behat\n                                 Holdings Ltd., Daryaganj, Central Delhi.\n\n\n     Court in the case of Asian Paints Ltd. 296 ITR 90.\n\n     He further submitted that the Impugned orders of\n\n     authorities below need be set aside as the\n\n     reassessment proceedings have been initiated\n\n     without obtaining a subjective satisfaction by the\n\n     Pr. CIT Delhi-7, New Delhi as the approval u/s 151\n\n     is mechanical and without application of mind.\n\n\n8.   The ld. AR vehemently pointed out that the\n\n     reassessment proceedings initiated by the Ld. AO\n\n     is   based   on   the       information        received      from\n\n     investigation wing and there was no material\n\n     before him to substantiate the allegation contained\n\n     in the information and therefore initiation of\n\n     proceedings is bad in law. He also contended that\n\n     the order under appeal is bad in law as the\n\n     assessing    officer    has      passed        the    order      of\n\n     assessment u/s 143(3) r/w. s. 147 of the Act\n\n     without issuing notice u/s 143(2) of the IT Act.\n\n\n9.   The ld. AR drew our attention towards copy of\n\n     proforma of obtaining approval u/s. 151 of the Act\n                       49\n                                ITA.No.8066/Del./2019 M/s. Behat\n                            Holdings Ltd., Daryaganj, Central Delhi.\n\n\nalong with reasons recorded, which are placed at\n\npgs.    16-18    of   the     assessee's         paper        book,\n\nsubmitted that in column 12 Addl. CIT has granted\n\napproval without application of mind by writing\n\nonly 'Yes, I am satisfied'. The ld. AR submitted\n\nthat as per decision of Hon Madhya Pradesh High\n\nCourt in the case of CIT vs. M/s. S. Goyanka Lime\n\nand Chemicals Ltd. 231 Taxman 0073 (MP), where\n\nthe Joint Commissioner recorded satisfaction in\n\nmechanical manner and without application of\n\nmind to accord sanction for issuing notice u/s. 148\n\nof the Act and has only recorded so "Yes, I am\n\nsatisfied" then, the reopening assessment has to\n\nbe held as invalid. The ld. AR also placed reliance\n\non the decision of ITAT, Delhi in the case of ITO vs.\n\nVirat   Credit    &   Holdings          Pvt.    Ltd.     in    ITA\n\nNo.89/Del/2012 dated 09.02.2018.                   The ld. AR\n\nsubmitted that as per decision of Hon'ble High\n\nCourt of Bombay in WP (L) No.3063/2017 in the\n\ncase of Smt. Kalpana Shantilal Haria vs. ACIT\n                           50\n                                   ITA.No.8066/Del./2019 M/s. Behat\n                               Holdings Ltd., Daryaganj, Central Delhi.\n\n\n      dated 22.12.2017, sanction for issuing a reopening\n\n      notice cannot be mechanical but has to be on due\n\n      application of mind.      Sanction accorded despite\n\n      mention of non-existent section in the notice is\n\n      prima facie evidence of non-application of mind on\n\n      the part of the sanctioning authority.                    Their\n\n      lordship in this judgment categorically held that\n\n      such defect cannot be cured u/s. 292B of the Act.\n\n\n10.   The ld. AR placed reliance on the decision of\n\n      Hon'ble High Court of Delhi dated 31.08.2017 in\n\n      WP(C)    No.   614/2014       in    the    case      of   Yum\n\n      Restaurants Asia Pte Ltd. vs. DDIT it was held that\n\n      the glaring mistakes in the proforma for approval\n\n      is the valid ground for quashing the assessment on\n\n      the premise of non-application of mind by all the\n\n      authorities involved in the process of recording\n\n      reasons and providing satisfaction/s. 151 of the\n\n      Act. Further placed reliance on the decision of\n\n      ITAT, Mumbai in the case of GTL Ltd. vs. ACIT\n\n      reported in 37 ITR (Trib.) 0376 (Mum.), notice u/s.\n                          51\n                                  ITA.No.8066/Del./2019 M/s. Behat\n                              Holdings Ltd., Daryaganj, Central Delhi.\n\n\n      148 of the Act does not mention the fact that the\n\n      same is issued after the satisfaction of the\n\n      authority u/s. 151 of the Act, such non-mentioning\n\n      of this fact renders the consequent assessment\n\n      invalid in law, Relied on the judgment of DSJ\n\n      Communication vs. DCIT 222 Taxman 129 (Bom.).\n\n\n11.   On the issue of validity of reopening and initiation\n\n      reassessment proceedings u/s. 147 of the Act the\n\n      ld. AR also pointed out that as per ratio of the\n\n      decision of Hon'ble Bombay High Court in the case\n\n      of Asian Paints Ltd. 296 ITR 90 (Bom), the AO to\n\n      wait for four weeks to begin assessment after\n\n      disposing of the objection and non-compliance of\n\n      the same renders assessment proceedings void.\n\n      He submitted that in the present case the\n\n      objections of the assessee vide dated 29.11.2016\n\n      filed before the AO were disposed of/dismissed by\n\n      the AO by the order dated 12.12.2016 and he\n\n      passed impugned reassessment order u/s. 143(3)\n\n      r/w s. 147 of the Act on 22.12.2016 which is clear\n                           52\n                                   ITA.No.8066/Del./2019 M/s. Behat\n                               Holdings Ltd., Daryaganj, Central Delhi.\n\n\n      violation of directions given by Hon'ble High Court\n\n      in the case of Asian Paints (supra) and on this\n\n      count   also   reassessment           proceedings          and\n\n      consequent orders are void and thus, bad in law.\n\n      This view was again approved by Hon'ble High\n\n      Court of Bombay itself in the subsequent decision\n\n      in the case of Aroni Commercials Ltd. vs. DCIT\n\n      reported in 362 ITR 403 (Bom) and followed by\n\n      ITAT, Bombay in the case of Shri Hirachand\n\n      Kanuga vs. DCIT in ITA No.4261 & 4262/2012\n\n      dated 27.02.2015.\n\n\n12.   On these submissions, the ld. DR could not\n\n      controvert the facts that the AO disposed of\n\n      objections of the assessee by way of passing order\n\n      on 12.12.2016 and impugned reassessment order\n\n      u/s. 143(3) r/w s. 147 of the Act was passed only\n\n      after 10 days of disposal of objections.                These\n\n      facts trigger the ratio of the decision of Hon'ble\n\n      Bombay High Court in the case of Asian paints\n\n      (supra), wherein their lordship directed that the AO\n                           53\n                                   ITA.No.8066/Del./2019 M/s. Behat\n                               Holdings Ltd., Daryaganj, Central Delhi.\n\n\n      to wait for four weeks to begin assessment after\n\n      disposing of the objections of the assessee and\n\n      non-compliance the same renders assessment\n\n      proceedings void and bad in law.                      Present\n\n      impugned reassessment order cannot be held\n\n      sustainable and valid as the AO has passed the\n\n      same immediately after 10 days of disposal\n\n      of/dismissal of objection of the assessee which is\n\n      clear violation of direction of Hon'ble High Court of\n\n      Bombay in the case of Asian paints (supra) and\n\n      legal contention of the assessee on this issue are\n\n      found to be acceptable and we hold so.\n\n\n13.   The ld. AR drew our attention towards reasons\n\n      recorded and submitted that there is no date in the\n\n      reasons recorded which shows casual approach of\n\n      the AO while recording the reasons.              The ld. AR\n\n      submitted   that   as     per    decision       of    Hon'ble\n\n      Jurisdictional High Court of Delhi in the case of\n\n      PCIT vs. Meenakshi Overseas P. Ltd. 395 ITR 677\n\n      (Del) if the reasons failed to demonstrate the link\n                     54\n                             ITA.No.8066/Del./2019 M/s. Behat\n                         Holdings Ltd., Daryaganj, Central Delhi.\n\n\nbetween the tangible material and formation of the\n\nreasons to believe that the income has escaped\n\nassessment then, it would amount to borrowed\n\nsatisfaction and it has to be presumed that there is\n\nno independent application of mind by the AO to\n\nthe tangible material which forms the basis of the\n\nreason   to   believe    that   income       has escaped\n\nassessment. The ld. AR submitted that from the\n\nthree pages of reasons recorded, it is discernable\n\nthat in first four paras the AO has noted facts of\n\nthe information received from DDIT (investigation),\n\nFaridabad, in para 6 modus operandi of entry\n\nproviders has been noted thereafter, in para 7 & 8,\n\nit has been arisen that either during survey or post\n\nsurvey proceedings the assessee company has not\n\nsubmitted     satisfactory      explanation        to    prove\n\nidentity, genuineness and creditworthiness of\n\nshare capital/premium introducers and thus, the\n\nsame is from paper companies of entry operator\n\nand   then, he recorded satisfaction                that the\n                                55\n                                        ITA.No.8066/Del./2019 M/s. Behat\n                                    Holdings Ltd., Daryaganj, Central Delhi.\n\n\n      assessee company taken bogus/ accommodation\n\n      entries.   The ld. AR vehemently pointed out that\n\n      thereafter in last para 9 & 10, the AO, without\n\n      applying mind to the information received from the\n\n      Investigation Wing, recorded that he has reason to\n\n      believe    that    the        an    income       has      escaped\n\n      assessment which clearly shows that the AO\n\n      proceeded     to    initiate        initiatory       assessment\n\n      proceedings and reopening of assessment without\n\n      having any valid satisfaction on the basis of\n\n      borrowed      satisfaction          as      there       was       no\n\n      independent application of mind to the tangible\n\n      material received from Investigation Wing, which\n\n      could form the basis reason to believe that income\n\n      has escaped assessment.\n\n\n14.   Further placing reliance on the decision of Hon'ble\n\n      High Court of Delhi in the case of PCIT vs. G&G\n\n      Pharma India Ltd. reported in 384 ITR 147 (Del),\n\n      the ld. AR submitted that reopening of assessment\n\n      by an AO based on the information received from\n                          56\n                                  ITA.No.8066/Del./2019 M/s. Behat\n                              Holdings Ltd., Daryaganj, Central Delhi.\n\n\n      the Director of Investigation without making any\n\n      effort to discuss the materials on the basis on\n\n      which he formed a prima facie opinion that income\n\n      had escaped assessment. The Court held that the\n\n      basic requirement of s. 147 of the Act that AO\n\n      should apply independent mind in order to form\n\n      reasons to believe that income had escaped\n\n      assessment had not been fulfilled.\n\n\n15.   The ld. AR submitted that as per ratio of the\n\n      decision of Hon'ble High Court of Delhi in the case\n\n      of PCIT vs. RMG Polyvinyl (I) Ltd. reported in 396\n\n      ITR 5 (Del), where information was received from\n\n      investigation wing that assessee was beneficiary\n\n      of accommodation entries but no further inquiry\n\n      was undertaken by AO, said information could not\n\n      be said to be tangible material as per se and, thus,\n\n      reassessment on said basis was not justified.\n\n      Finally, the ld. AR submitted that the impugned\n\n      initiation of reassessment proceedings, notice and\n\n      all consequent proceedings and orders are not\n                            57\n                                    ITA.No.8066/Del./2019 M/s. Behat\n                                Holdings Ltd., Daryaganj, Central Delhi.\n\n\n      valid and bad in law therefore, the same may\n\n      kindly be quashed.\n\n\n16.   Replying to the above, the ld. DR submitted that\n\n      the copy of proforma for obtaining approval u/s.\n\n      151 of the Act and reasons recorded by the AO are\n\n      the internal departmental communication between\n\n      the   PCIT   and   ACIT        and      the     PCIT      being\n\n      administrative head and senior to the ACIT has\n\n      power to peruse the approval u/s. 151 of the Act\n\n      and his sings thereon does not make the same as\n\n      mechanical and without application of mind and\n\n      the same cannot be termed or alleged as invalid or\n\n      bad in law. The ld. DR submitted that in column\n\n      12 of approval the ACIT Shri Sarabjeet Singh has\n\n      granted valid approval by noting that "Yes, I am\n\n      satisfied" which is sufficient to comply with the\n\n      provisions of s. 151 of the Act. He also submitted\n\n      that if there is any defect therein the same is\n\n      rectifiable u/s. 292B of the Act and thus, the\n\n      reassessment proceedings and orders cannot be\n                           58\n                                   ITA.No.8066/Del./2019 M/s. Behat\n                               Holdings Ltd., Daryaganj, Central Delhi.\n\n\n      challenged on this count.           The ld. DR further\n\n      submitted that the format/proforma for granting\n\n      approval u/s. 151 of the Act has been designed by\n\n      the Department and there is no role of AO in\n\n      framing and designing the same and the allegation\n\n      of non-application of mind on the basis of such\n\n      proforma or words used by the approving authority\n\n      cannot be made.\n\n\n17.   The ld. DR submitted that the team of Revenue\n\n      officers work under the supervision and guidance\n\n      of PCIT and the Department is very careful about\n\n      the compliance of the provision of the Act as well\n\n      as directions of Hon'ble Supreme Court, Hon'ble\n\n      High Court and CBDT Circulars and also towards\n\n      working of the Revenue Officers in the cases of\n\n      initiation   of   reassessment         proceedings         and\n\n      framing of reassessment orders.                The ld. DR\n\n      submitted that the proforma of approval u/s. 151\n\n      of the Act is being followed all over India and the\n\n      ACIT applied his mind to the all material placed\n                           59\n                                   ITA.No.8066/Del./2019 M/s. Behat\n                               Holdings Ltd., Daryaganj, Central Delhi.\n\n\n      before him by the AO prior to granting approval\n\n      u/s. 151 of the Act in column 12 of the proforma.\n\n      Therefore, allegations made by the ld. AR are not\n\n      sustainable and tenable and the same may kindly\n\n      be dismissed.\n\n\n18.   Placing rejoinder to the above, the ld. AR submitted\n\n      that in the reasons para 6 the information of DDIT\n\n      (Investigation) has been given and reference of\n\n      various entry providers such as Shri Himanshu\n\n      Verma, Shri Praveen Aggarwal etc. who are\n\n      engaged   in    providing     accommodation            entries\n\n      through dummy companies with dummy directors.\n\n      The ld. AR submitted that in the table given in\n\n      para 3 is taken along with para 6 of the reasons\n\n      recorded then, it is clear that the names of\n\n      companies are 13 and above named two persons\n\n      at serial No. 11 & 12 have been noted and there is\n\n      no name of entry provider in the other 11 columns\n\n      and there is no link in the reasons recorded with\n\n      regard to these 11 companies.                  The ld. AR\n                         60\n                                  ITA.No.8066/Del./2019 M/s. Behat\n                              Holdings Ltd., Daryaganj, Central Delhi.\n\n\nsubmitted that these facts clearly show that the\n\nAO has acted on suspicion only and not on any\n\ncredible input available to him through DDIT\n\n(investigation) information or otherwise on the\n\nbasis of any exercise or application of mind by\n\nhimself. Therefore, the reassessment proceedings\n\nand all consequent orders are not sustainable and\n\nbad in law. Reiterating his earlier arguments, the\n\nld.   AR     vehemently           pointed         out    that     the\n\napproval/sanction        given        in    para        12   of   the\n\nproforma is not a valid sanction as per ratio of the\n\nvarious decisions including decision of Hon'ble\n\nHigh Court of Madhya Pradesh in the case of S.\n\nGoyanka Lime and chemicals Ltd. (supra), which\n\nhas been upheld by Hon'ble Supreme Court by\n\ndismissing SLP of the Revenue reported in 237\n\nTaxman       378    (SC)          therefore,        initiation     of\n\nreassessment proceedings u/s. 147 of the Act,\n\nnotice     u/s.   148        of   the      Act,    reassessment\n                              61\n                                      ITA.No.8066/Del./2019 M/s. Behat\n                                  Holdings Ltd., Daryaganj, Central Delhi.\n\n\n      proceedings and all consequent orders may kindly\n\n      be quashed.\n\n\n19.   On    careful       consideration         of     above       rival\n\n      submissions, first of all, we may point out that\n\n      from the proforma of approval u/s. 151 of the Act\n\n      placed at pgs. 16-17 of the assessee paper book, it\n\n      is clear that in column 12 the ACIT has granted\n\n      approval for the issue of notice u/s. 148 of the Act\n\n      by writing that "Yes, I am satisfied" which is not\n\n      sufficient to comply with the requirement of s. 151\n\n      of the Act.     As per ratio of the decision of High\n\n      Court of Madhya Pradesh in the case of CIT v.\n\n      M/s. S. Goyanka Lime and Chemical Ltd. (supra),\n\n      where the JCIT/ACIT has only recorded "Yes, I am\n\n      satisfied" then, it has to be held that the approving\n\n      authority     has     recorded         satisfaction        in     a\n\n      mechanical manner and without application of\n\n      mind to accord sanction for issuing notice u/s. 148\n\n      of the Act for reopening of assessment and in this\n\n      situation initiation of reassessment proceedings\n                              62\n                                      ITA.No.8066/Del./2019 M/s. Behat\n                                  Holdings Ltd., Daryaganj, Central Delhi.\n\n\n      and reopening of assessment has to be held as\n\n      invalid and bad in law. Therefore, we are inclined\n\n      to hold that the reopening of assessment and\n\n      notice u/s. 148 of the Act are bad in law and\n\n      consequently     all    subsequent           proceedings         in\n\n      pursuant thereto are also bad in law and the same\n\n      cannot be held as valid and sustainable.\n20.   So far as legal contention of the ld. AR on behalf of\n\n      the assessee regarding non-application of mind by\n\n      the AO, while recording reasons for reopening of\n\n      assessment, is concerned from careful perusal and\n\n      reading of the three pages of reasons recorded, we\n\n      observe that in first four paras the AO has noted\n\n      facts of   the information received from DDIT\n\n      (Investigation), Faridabad, further, in para 6\n\n      modus operandi of entry providers has been noted\n\n      thereafter, in para 7 & 8, it has been arisen that\n\n      either during survey or post survey proceedings\n\n      the   assessee     company           has      not     submitted\n\n      satisfactory   explanation           to     prove       identity,\n                       63\n                               ITA.No.8066/Del./2019 M/s. Behat\n                           Holdings Ltd., Daryaganj, Central Delhi.\n\n\ngenuineness     and        creditworthiness           of    share\n\ncapital/premium introducers and thus, the same is\n\nfrom paper companies of entry operator and then,\n\nhe   recorded    satisfaction        that      the     assessee\n\ncompany taken        bogus/accommodation                   entries.\n\nThereafter, the AO in last para 9 & 10, without\n\napplying mind to the information received from the\n\nInvestigation Wing states/writes that he has\n\nreason to believe that the income has escaped\n\nassessment. The text and words used by the AO\n\nin   the   reasons     recorded         for    reopening         of\n\nassessment clearly show that the AO proceeded to\n\ninitiatory assessment proceedings and reopening\n\nof   assessment       without        having          any     valid\n\nsatisfaction and only on the basis of borrowed\n\nsatisfaction    as    there      was      no     independent\n\napplication of mind by the AO to the tangible\n\nmaterial received from Investigation Wing which\n\ncould form the valid basis and reason to believe\n\nthat income has escaped assessment.\n                              64\n                                      ITA.No.8066/Del./2019 M/s. Behat\n                                  Holdings Ltd., Daryaganj, Central Delhi.\n\n\n21.   In view of decisions of Hon'ble High Court of Delhi\n\n      in the cases of PCIT vs. Meenakshi Oversaes\n\n      (supra), PCIT vs. G&G Pharma (I) Ltd. (supra) and\n\n      decision in the case of PCIT vs. RMG Polyviny (I)\n\n      Ltd. (supra), where information was received from\n\n      investigation wing that assessee was beneficiary\n\n      of accommodation entries but no further inquiry\n\n      was undertaken by AO, said information could not\n\n      be said to be tangible material per se and, thus,\n\n      reassessment on said basis was not justified. In\n\n      the case of Meenakshi Overseas (supra), their\n\n      lordship speaking for the Hon'ble Jurisdictional\n\n      High Court held that where the reasons recorded\n\n      by the AO failed to demonstrate the link between\n\n      the tangible material and the formation of the\n\n      reasons to believe that income has escaped\n\n      assessment     then,        indeed     it   is   a    borrowed\n\n      satisfaction and the conclusion of the AO based on\n\n      reproduction    of      conclusion          drawn       in     the\n\n      investigation report cannot be held as valid reason\n                          65\n                                  ITA.No.8066/Del./2019 M/s. Behat\n                              Holdings Ltd., Daryaganj, Central Delhi.\n\n\n      to believe after application of mind.                In this\n\n      judgment their lordship also held that where\n\n      nothing from the report of investigation wing is set\n\n      out to enable the reader to appreciate how the\n\n      conclusions flow there from then there is no\n\n      independent application of mind by the AO to the\n\n      tangible material which form the basis of the\n\n      reasons to believe that income has escaped\n\n      assessment.\n\n\n22.   In the present case, as we have noted above, the\n\n      conclusion recorded by the AO in para 9 & 10 of\n\n      the reasons is based on the information received\n\n      from the director of investigation wing and the AO\n\n      without making any effort to examine and discuss\n\n      the material received from the Investigation Wing\n\n      and without application of the mind to the same\n\n      formed a reason to believe that income had\n\n      escaped assessment. This shows that the AO\n\n      proceeded to initiate reassessment proceedings on\n\n      the basis of borrowed satisfaction without any\n                        66\n                                ITA.No.8066/Del./2019 M/s. Behat\n                            Holdings Ltd., Daryaganj, Central Delhi.\n\n\napplication of mind and exercise on the information\n\nreceived from the           Investigation       Wing of        the\n\nDepartment. Therefore, we have no hesitation to\n\nhold    that     the    AO       proceeded         to     initiate\n\nreassessment proceedings u/s. 147 of the Act and\n\nto issue notice u/s. 148 of the Act on the basis of\n\nborrowed satisfaction and without any application\n\nof mind and examination of the so called material\n\nand information received from the investigation\n\nwing to establish any nexus, even prima facie,\n\nwith the such information.                Therefore, in our\n\nconsidered opinion the initiation of reassessment\n\nproceedings u/s. 147 of the Act, notice u/s. 148 of\n\nthe    Act,    reassessment        proceedings          and     all\n\nconsequent      proceeding       and      orders,       including\n\nimpugned reassessment and first appellate order,\n\nare bad in law and thus, not sustainable and we\n\nhold so.      Accordingly, on the basis of foregoing\n\ndiscussion, grounds No.2, 3, 4 and additional\n\nground of the assessee are allowed and impugned\n                                67\n                                        ITA.No.8066/Del./2019 M/s. Behat\n                                    Holdings Ltd., Daryaganj, Central Delhi.\n\n\n           proceedings, notice u/s. 148 of the Act and all\n\n           consequent orders are quashed."\n\n\n8.5.       The statement of Shri Himanshu Verma is also\n\nfiled on record which did not find mention if M/s. Shubh\n\nPropbuild Pvt. Ltd., as mentioned in the reasons belong to\n\nShri Himanshu Verma. There is no investor exist in the name\n\nof M/s. Management Services Pvt. Ltd., and no addition in\n\nrespect of the same company have been made by the A.O.\n\nThe A.O, therefore, recorded incorrect facts in the reasons for\n\nreopening of the assessment. Thus the same cannot be\n\napproved under the Law. It is well settled Law if wrong facts\n\nand wrong reasons are recorded for reopening of the\n\nassessment, reopening of the assessment would be invalid\n\nand bad in Law. We rely upon Judgment of Hon'ble Punjab &\n\nHaryana High Court in the case of Atlas Cycle Industries 180\n\nITR 319 (P&H). It is well settled Law that note already filed\n\nwith return disclosing nature of capital receipt and no other\n\ntangible   material   found,   therefore,       reopening        of    the\n\nassessment under section 148 was quashed. We rely upon\n\nJudgment of Hon'ble Delhi High Court in the case of CIT vs.,\n                                68\n                                        ITA.No.8066/Del./2019 M/s. Behat\n                                    Holdings Ltd., Daryaganj, Central Delhi.\n\n\nAtul Kumar Swami [2014] 362 ITR 693 (Del.) and Judgment\n\nof Hon'ble Allahabad High Court in the case of Kanpur Texel\n\nP. Ltd., 406 ITR 353 (Alld.). Similarly, in the case of CIT vs.,\n\nVardhaman Industries [2014] 363 ITR 625 (Raj.), the Hon'ble\n\nRajasthan High Court has held that "reasons must be based\n\non new and tangible materials. Notice based on documents\n\nalready on record, 148 not valid." In the instant case under\n\nappeal, the A.O. has reproduced the information received\n\nfrom Investigation Wing and reproduced the same in the\n\nreasons recorded under section 148 of the I.T. Act. This\n\ninformation shows that assessee has received the amount of\n\ncredit from 06 parties, but, one of the party i.e., M/s.\n\nManagement Services Pvt. Ltd., do not exist and that M/s.\n\nShubh Propbuild Pvt. Ltd., do not belong to Shri Himanshu\n\nVerma. It, therefore, appears that A.O. has not gone through\n\nthe details of the information and has not even applied his\n\nmind and merely concluded that he has reason to believe that\n\nincome chargeable to tax has escaped assessment. In the\n\nreasons A.O. has recorded that assessee has received\n\naccommodation entry of Rs.2.45 crores, but, ultimately made\n                               69\n                                       ITA.No.8066/Del./2019 M/s. Behat\n                                   Holdings Ltd., Daryaganj, Central Delhi.\n\n\nan addition of Rs.11.05 crores without bringing any material\n\nagainst the assessee. The reasons to believe are, therefore,\n\nnot in fact reasons, but, only conclusion of the A.O. In the\n\ncase of Meenakshi Overseas Pvt. Ltd., (supra), the A.O. in the\n\nreasons has even mentioned that he has gone through the\n\ninformation received which is lacking in the present case. The\n\nA.O. being a quasi-judicial authority is expected to arrive at\n\nsubjective satisfaction independently on his own. The A.O.\n\nhowever, merely repeated the report of the Investigation Wing\n\nin the reasons and formed his belief that income chargeable\n\nto tax has escaped assessment without arriving at his\n\nsatisfaction. Thus, there is no independent application of\n\nmind by the A.O. to the report of Investigation Wing to form\n\nthe basis for recording the reasons. The reasons recorded by\n\nthe A.O. are also incorrect as noted above. The reasons failed\n\nto demonstrate the link between the alleged tangible material\n\nand the formation of reasons to believe that income\n\nchargeable to tax has escaped assessment. The decisions\n\nrelied upon by the Learned Counsel for the Assessee in the\n\ncases of Pr. Commissioner of Income Tax vs., RMG Polyvinyl\n                               70\n                                       ITA.No.8066/Del./2019 M/s. Behat\n                                   Holdings Ltd., Daryaganj, Central Delhi.\n\n\n(I) Ltd., 396 ITR 5 (Del.), Pr. Commissioner of Income Tax vs.,\n\nMeenakshi Overseas (P) Ltd., 395 ITR 677 (Del.), Pr.\n\nCommissioner of Income Tax vs., G and G Pharma India Ltd.,\n\n384 ITR 147 (Del.) and Sarthak Securities Co. (P) Ltd., 329\n\nITR 110 (Del.), clearly apply to the facts and circumstances of\n\nthe case. Learned Counsel for the Assessee also relied upon\n\nOrder of ITAT, Delhi Bench in the case of Pioneer Town\n\nPlanners Pvt. Ltd., (supra) in which on identical facts\n\nreopening of the assessment have been quashed. The Ld.\n\nD.R. relied upon certain decisions in support of the contention\n\nthat reopening of the assessment is justified, but, the same\n\nare distinguishable on facts of the present case. Considering\n\nthe facts and circumstances of the case in the light of above\n\ndiscussion and decisions referred to in the Order, we are of\n\nthe view that reopening of the assessment is bad in law and\n\nthat sanction/approval granted by Pr. Commissioner of\n\nIncome Tax is also invalid. We may also note that vide Order\n\nsheet Dated 23.08.2019 the case was re-fixed for hearing\n\nbecause the Ld. D.R. argued that approval have been granted\n\nby Commissioner of Income Tax after due discussion of the\n                                71\n                                        ITA.No.8066/Del./2019 M/s. Behat\n                                    Holdings Ltd., Daryaganj, Central Delhi.\n\n\nmatter and perusal of the relevant information and thereafter\n\napproval in prescribed proforma sent to the A.O. and he has\n\nmentioned that I am satisfied. However, no record was\n\nproduced. Therefore, this case was re-fixed for fresh hearing.\n\nHowever, on the date of hearing no such record have been\n\nproduced   for   the   inspection   of    the    Bench.      Therefore,\n\nsatisfaction recorded by the Pr. Commissioner of Income Tax\n\nis invalid and without application of mind. Therefore, the\n\nreopening of the assessment is invalid and bad in Law and\n\ncannot be sustained in Law. We, accordingly, set aside the\n\nOrders of the authorities below and quash the reopening of\n\nthe assessment under section 147/148 of the I.T. Act, 1961.\n\nResultantly, all additions stands deleted. Since we have\n\nquashed the reopening of the assessment, therefore, there is\n\nno need to decide the addition on merit which is left with\n\nacademic discussion only.\n\n\n9.         In the result, appeal of Assessee allowed."\n\n\n5.2.       Considering the facts of the case in the light of\n\nabove decisions, it is clear that all the documents and\n\nAnnexures referred to in the reasons have not been supplied\n                                72\n                                        ITA.No.8066/Del./2019 M/s. Behat\n                                    Holdings Ltd., Daryaganj, Central Delhi.\n\n\nto the assessee and that approval granted by Pr. CIT is\n\ninvalid. Therefore, reopening of the assessment is wholly\n\ninvalid and void abinitio. Resultantly, the reopening of the\n\nassessment is liable to be quashed. Following the reasons\n\nfor decision in the case of M/s. Ganesh Ganga Investments\n\nPvt. Ltd., vs., ITO, Ward-10(1), New Delhi (supra), we set\n\naside the Orders of the authorities below and quash the\n\nreopening of the assessment. In the result, all the additions\n\nstand deleted.\n\n\n6.          In the result, appeal of Assessee allowed.\n\n\n            Order pronounced in the open Court.\n\n    Sd/-                                    Sd/-\n   (N.K. BILLAIYA)                         (BHAVNESH SAINI)\nACCOUNTANT MEMBER                         JUDICIAL MEMBER\nDelhi, Dated 15th January, 2020\nVBP/-\nCopy to\n1.   The appellant\n2.   The respondent\n3.   CIT(A) concerned\n4.   CIT concerned\n5.   D.R. ITAT "A" Bench\n6.   Guard File\n                       // BY Order //\n\n          Asst. Registrar : ITAT Delhi Benches : Delhi.