Reopening of assessment under section 147 invalidated where approval under section 151 was mechanical; reassessment quashed.

Reopening of assessment under section 147 was challenged on the ground that approval under section 151 was granted mechanically without independent application of mind, relying on shared information from a CBDT OM and third-party search action. Precedents establishing that proforma approvals stating mere concurrence are mechanical were applied to conclude the approval was invalid. Because the competent authority did not exercise the required independent scrutiny when granting approval, the reassessment proceedings based on that approval were quashed and the ground contesting assumption of jurisdiction under section 147 was allowed for the assessee.

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Issues: Whether the reassessment proceedings under section 147 of the Income-tax Act, 1961 are vitiated because the approval under section 151 was granted mechanically without independent application of mind, and whether the reassessment should be quashed.

Analysis: The statutory scheme requires that the prescribed authority record satisfaction on the reasons placed before it before granting approval under section 151; mere expressions such as "approved" or equivalent rubber-stamping do not disclose application of mind. Authorities and precedents establish that the approval must reflect discernible satisfaction and linkage between material considered and the conclusion reached. On the facts, the approval proforma contained only a conclusory endorsement without any reasons or reference to material that might have weighed in granting concurrence. Reliance on authorities addressing mechanical or ritualistic approvals supports the view that such concurrence is invalid and cannot sustain reassessment initiated under section 148/147; consequently, orders and notices founded on such flawed approval are liable to be set aside.

Conclusion: The approval under section 151 is invalid as granted mechanically without application of mind; the reassessment proceedings under section 147 (including consequential order and notice) are quashed and the appeal is allowed in favour of the assessee.

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