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Issues: Whether the approval granted for proceedings under Section 153C was vitiated for non-application of mind, and whether the absence of a valid approval rendered the proceedings incompetent.
Analysis: The approval order was required to show at least a minimum application of mind, even if it was not required to be a reasoned order. The Court held that an order which does not reflect such application of mind cannot be sustained merely by an -acquired explanation that material was available. Relying on earlier decisions dealing with approvals for proceedings under Section 153C, the Court found that the approval dated 6 August 2010 did not disclose any real consideration of the material and was therefore mechanical. Since valid approval was a mandatory pre-requisite, the absence of a lawful approval went to the root of the proceedings.
Conclusion: The approval was vitiated by non-application of mind, the proceedings under Section 153C were not competent, and the issue was decided against the Revenue and in favour of the assessee.
Ratio Decidendi: Where approval is a statutory precondition for initiating proceedings, the order must reflect at least minimal application of mind to the relevant material, and a mechanical approval without such reflection is invalid and renders the proceedings incompetent.
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