Mechanical sanction for reassessment invalidates reopening when approval lacks independent application of mind.

Reassessment initiated beyond four years required prior sanction under section 151(1), and the approval was invalid because the sanctioning authority acted mechanically without applying its mind to the recorded reasons and material. The proposal contained incorrect statutory references, showed no meaningful consideration of the basis for reopening, and was merely endorsed as a fit case for notice under section 148. The settled safeguard under section 151 is not a formality; it demands objective satisfaction on the material before the competent authority. As the approval was ritualistic and not independently considered, the reassessment was held invalid and the reopening was quashed.

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Issues: Whether the reassessment proceedings were validly initiated when the sanctioning authority under section 151(1) accorded approval mechanically without due application of mind.

Analysis: The reopening was beyond four years and therefore required prior sanction under section 151(1) of the Income-tax Act, 1961. The record showed that the approval was granted in a perfunctory manner, with incorrect statutory references in the proposal, absence of meaningful consideration of the reasons recorded, and the sanctioning authority merely endorsing the proposal as a fit case for notice under section 148. The Court applied the settled principle that the safeguard under section 151 is not an empty formality and that approval must reflect objective satisfaction on the material placed before the competent authority. A mechanical endorsement does not constitute valid sanction, and the defect is not cured merely because reassessment was otherwise based on information from search or survey proceedings.

Conclusion: The reassessment was invalid as the approval under section 151(1) was mechanical and vitiated by non-application of mind.

Final Conclusion: The reopening of assessment was quashed, and all connected appeals were decided in favour of the assessees.

Ratio Decidendi: For a reassessment notice, the approving authority must independently apply its mind to the reasons recorded and the material placed before it; a mechanical or ritualistic approval under section 151 renders the reassessment invalid.

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