Brijesh Kumar v. ITO, Noida (ITA No. 3360/Del/2024)
Delhi Bench of the Income Tax Appellate Tribunal (ITAT) in the case Brijesh Kumar v. ITO, Noida (ITA No. 3360/Del/2024) has quashed the reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961 due to mechanical and non-application of mind in the sanction granted under Section 151.
Background:
The case involved a reassessment for A.Y. 2010–11 based on AIR information showing cash deposits of ₹13,03,400 in the assessee’s bank account. The AO, citing non-compliance, made the addition under Section 147 read with Section 144.
The assessee filed an appeal, which was dismissed by the CIT(A) solely on the grounds of delay in filing. Aggrieved, the assessee approached the ITAT.
Key Grounds Taken by the Assessee:
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Delay in filing appeal was due to reasonable cause and should’ve been condoned.
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The approval under Section 151 was mechanical.
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The AO failed to apply his mind and acted merely on borrowed satisfaction based on AIR information.
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No consideration was given to corresponding cash withdrawals, resulting in arbitrary addition.
ITAT’s Observations & Ruling:
The ITAT focused primarily on the legality of the reopening. It held that:
“The approval granted is mechanical and does not reflect any application of mind.”
The Tribunal referred to a string of precedents, including:
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S. Goyanka Lime & Chemical Ltd. [SC and MP HC]
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PCIT v. Pioneer Town Planners (P) Ltd. [Delhi HC, 2024]
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Shri Kadir Ahmed v. ITO [ITAT Delhi, 2022]
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Udesh Sharma v. ITO
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Shri Birpal v. ITO [ITAT Delhi, 2024]
Following these precedents, the Tribunal concluded that approval under Section 151 must not be a rubber-stamp exercise and must display application of mind by the sanctioning authority.
Accordingly, the ITAT:
- Quashed the reassessment proceedings
- Declared the order void-ab-initio
- Declined to examine the other grounds as they became academic
Impact of the Ruling:
This decision reaffirms the requirement of due process in reopening assessments. It emphasizes that mere possession of AIR information is not sufficient — and any reopening must pass the test of valid, reasoned, and non-mechanical sanction under Section 151.
Conclusion:
The ITAT ruling in Brijesh Kumar’s case sends a strong message: compliance with procedural safeguards is not optional for the Income Tax Department. Mechanical approvals can and will render reassessments invalid.