Reassessment notice held bad in law as it was sanctioned by CIT on ground which was different from the ground of AO

Reassessment notice held bad in law as it was sanctioned by CIT on ground which was different from the ground of AO

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Reassessment notice held bad in law as it was sanctioned by CIT on ground which was different from the ground of AO

[2019] 104 taxmann.com 18 (Bombay)
IT: Where reopening notice was issued against assessee on grounds that assessee had received accommodation entries from an entity while order granting sanction to reopening under section 151 was on basis that it was assessee who was engaged in providing accommodation entries, since impugned sanction was granted without application of mind to reasons recorded for reopening, impugned reopening notice was bad in law
Section 151, read with section 68, of the Income-tax Act, 1961 – Income escaping assessment – Sanction for issue of notice (Recorded reasons) – Assessment year 2011-12 – Whether it is a settled position in law that grant of sanction by Commissioner under section 151 is not a mechanical act on his part but it requires due application of mind to reasons recorded before granting sanction – Held, yes – An information was received from ADIT (Investigation) that during search conducted in case of ‘HV’ group, it was found that ‘HV’ was engaged in activity of providing bogus accommodation entries and that assessee was also a beneficiary of ‘HV’ group – On basis of such information, reopening notice was issued against assessee – Commissioner also granted sanction under section 151 to issue of impugned reopening notice – It was noted that reasons recorded in support of reopening notice recorded activity of ‘HV’ group in providing accommodation entries while order granting sanction proceeded on basis that it was assessee who was engaged in providing accommodation entries – Whether sanction order indicated non-application of mind to reasons recorded for reopening, therefore, impugned reopening notice was bad in law and deserved to be quashed – Held, yes
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