High Court of Uttarakhand · Judgments and reasoned final orders
Principal Commissioner of Income Tax (Central), Kanpur v. Rajan Rajesh Kumar
Income Tax Appeal No. 12 of 2024 ·
Reassessment under sections 147, 148, 149 and 151 based on uncorroborated third-party loose sheets ('LP 186 & 187' seized from contractor Amit Sharma) after initial refusal of sanction under section 151: ITAT order quashing assessments for AYs 2015-16 and 2016-17 affirmed.
1. FACTS OF THE CASE
During search/survey operations under sections 132 and 133A against Amit Sharma (a sub-contractor of UPRNN), two loose sheets ('LP 186 & 187') headed 'Sri Rajesh MD' were found alleging bullion, silver and cash transactions of around Rs. 16 crore. The AO sought to reopen the assessments of the respondent (then Managing Director of SIDCUL, a separate State corporation) for AYs 2015-16 and 2016-17. On 18.03.2020, the Competent Authority under section 151 refused sanction because the AO's reasons lacked independent corroboration of LP 186 & 187. Thereafter, on 23.06.2020 (after expiry of four years), the JCIT(OSD) recorded fresh reasons and obtained sanction from the PCIT, Kanpur. The ITAT allowed the assessee's appeals on 08.02.2024.
2. DISCUSSION BY THE COURT
Applying CBI v. V. C. Shukla ((1998) 3 SCC 410) and Common Cause (Sahara Diaries) v. Union of India ([2017] 77 taxmann.com 245 (SC)), and noting that SIDCUL and UPRNN are distinct corporations with separate chains of command and no material established any proximity between the searched sub-contractor and the respondent, the Division Bench held that the presumption drawn by the AO from uncorroborated third-party loose sheets after an earlier refusal of sanction under section 151 vitiated the 'reason to believe' required for reopening.
3. JUDICIAL DECISION
Answering the question of law against the Revenue and in favour of the respondent assessee, the High Court dismissed Income Tax Appeal No. 12 of 2024 without admission.
4. OUTCOME
Assessee - Question answered against the Revenue and in favour of the assessee; Revenue's appeal dismissed without admission.
5. AKHB REVIEW POINT
AKHB analysis: where the competent authority under section 151 refuses sanction on the ground that third-party loose sheets lack independent corroboration, a subsequent officer cannot cure that defect after expiry of the four-year window merely by re-submitting the same uncorroborated loose-sheet allegations to a higher authority.
Source: AKHB analysis based on Paragraphs 11-64; PDF pp. 4-36
Source and verification
36-page official High Court of Uttarakhand judgment PDF (20251217_UKHC010115722024.pdf).
Original PDF: 36 pages · SHA-256: d4564c3d8544a6ad4a6a460890abfa0567e3dce23d482770383e463c4e337888
Supplied source-reviewed note retained; original bytes and identity validation checked in this release. Substantive re-review is not claimed for this record.
Applies sections 132, 147, 148, 149 and 151 of the Income-tax Act, 1961 for AYs 2015-16 and 2016-17. Income-tax Act, 2025 equivalence is not verified.
Full primary judgment PDF read page-by-page and verified against the AKHB Google Drive repository. Comprehensive subsequent judicial treatment has not been independently verified.
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