Reassessment invalid where section 151 approval showed application of mind and compulsory acquisition interest was misread as ordinary interest.

Reassessment under section 151 was held invalid because the sanctioning authority had recorded satisfaction on the reasons placed before it, so the approval was not mechanical. The Tribunal also found that the Assessing Officer mischaracterised the receipt from compulsory acquisition: interest under section 28 of the Land Acquisition Act, 1894 forms part of enhanced compensation rather than ordinary interest for delay. On that material, reopening was not justified, and the objection to reassessment succeeded in favour of the assessee.

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Issues: Whether the reassessment proceedings were validly initiated on the basis of approval recorded under section 151 and the material relied upon by the Assessing Officer.

Analysis: The approval was challenged as mechanical, but the record showed that the sanctioning authority had recorded satisfaction on the reasons placed before it. The Tribunal noted that later judicial authorities had accepted similar forms of approval as sufficient where the authority had applied its mind to the reasons recorded. On the formation of belief, the Tribunal also found that the Assessing Officer had misread the nature of the receipt arising from compulsory acquisition, because interest under section 28 of the Land Acquisition Act, 1894 is treated as part of enhanced compensation and not as ordinary interest for delay. In that background, the material did not justify reopening.

Conclusion: The reassessment was held invalid and the objection to reopening was decided against the Revenue and in favour of the assessee.

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