TaxTMI 
TaxTMI 
2026 (4) TMI 28
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....CIT(A) vide orders impugned, dismissed the Appeals filed by the Assessee. As against the orders of the Ld. CIT(A), Assessee preferred the captioned appeals. 3. The Ld. Counsel for the Assessee confined his submission on Ground No. 2 of the Appeals and contended that the Ld. CIT(A) has erred in law and on facts in confirming the action of the A.O. of issuing Notice u/s 148 of the Act after obtaining mechanical sanction u/s 151 of the Act from the competent authority, which being illegal as per provisions of the Income Tax Act, 1961, thus the consequential assessment orders will be annulled. The Ld. Counsel has relied on following judicial precedents and sought for quashing the assessment order. i) Arjun Singh and Anr vs. Assistant Director of Income and Anr 246 ITR 363 (2000) (MP). ii) ITA Nos. 82, 83, 84, 87 and 89/2012 CIT, Jabalpur vs. M/s S. Goyanka Lime and Chemicals Ltd. (iii) Union of India Vs. M. L. Capoor & ors (1973) AIR 1974 SC 87,97/2 SCC 836. 4. Per contra, the Ld. Department's Representative submitted that the assessment orders have been passed in accordance with provisions of Act and Rules framed thereunder and the additions have b....
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....e before AO, that was rejected and assessment was completed u/ss. 143(3) and 147-CIT(A) found that reason recorded by Joint Commissioner of Income Tax, for according sanction, was merely recording 'I am Satisfied'-Action for sanction was alleged to be without application of mind and to be done in mechanical manner-Held, while according sanction, Joint Commissioner, Income Tax only recorded "Yes, I am satisfied"- Mechanical way of recording satisfaction by Joint Commissioner, that accorded sanction for issuing notice u/s. 147, was clearly unsustainable-On such consideration, both Appellate authorities interfered into matter- o error was committed warranting reconsideration-As far as explanation to S. 151, brought into force by Finance Act, 2008 was concerned, same only pertained to issuance of notice and not with regard to manner of recording satisfaction- Amended provision did not help Revenue-No question of law involved in matter, that warranted reconsideration Revenue's Appeals dismissed." 7. The Hon'ble Jurisdictional High Court in the case of Pr. CIT vs Pioneer Town Planners (P.) Ltd. (supra), while dealing with an identical issue, held as under:- 22. "So far as the....
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...., being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice under section 148, need not issue such notice himself." 12. A plain reading of the aforesaid provision clearly indicates that the prescribed authority must be "satisfied", on the reasons recorded by the Assessing Officer ("AO"), that it is a fit case for the issuance of such notice. Thus, the satisfaction of the prescribed authority is a sine qua non for a valid approval. 13. It is trite law that the grant of approval is neither an empty formality nor a mechanical exercise. The competent authority must apply its mind independently on the basis of material placed before it before grant of sanction. 14. A perusal of the record reveals that the request for approval under section 151 of the Act in a printed format was placed before the Principal Chief Commissioner of Income-tax ("PCCIT") on March 20, 2023. The Principal Chief Commissioner of Income-tax granted the approval the same day. The approval accorded by the Principal Chief Commissioner of Income-tax in column 22 is extracted below: 22 Reasons for according approval/rejection by the ....
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.... '11. Section 151 of the Act clearly stipulates that the Commissioner of Income-tax (Appeals), who is the competent authority to authorise the reassessment notice, has to apply his mind and form an opinion. The mere appending of the expression "approved" says nothing. It is not as if the Commissioner of Income-tax (Appeals) has to record elaborate reasons for agreeing with the noting put up. At the same time, satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner. In the present case, the exercise appears to have been ritualistic and formal rather than meaningful, which is the rationale for the safeguard of an approval by a higher ranking officer. For these reasons, the court is satisfied that the findings by the Income-tax Appellate Tribunal cannot be disturbed.' 18. Further, this court in the case of Central India Electric Supply Co. Ltd. v. ITO has taken a view that merely rubber stamping of 'Yes' would suggest that the decision was taken in a mechanical manner. Paragraph 19 of the said decision is reproduced as under (page 245 of 333 ITR): 'In respect of the first plea, if the judgments ....
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..... In the case of Chhugamal Rajpal v. S. P. Chaliha³, the hon'ble Supreme Court refused to consider the affixing of signature along with the noting Yes' as valid approval and had held as under (page 608 of 79 ITR): 'Further the report submitted by him under section 151(2) does not mention any reason for coming to the conclusion that it is a fit case for the issue of a notice under section 148. We are also of the opinion that the Commissioner has mechanically accorded permission. He did not himself record that he was satisfied that this was a fit case for the issue of a notice under section 148. To question 8 in the report which reads "whether the Commissioner is satisfied that it is a fit case for the issue of notice under section 148", he just noted the b word "yes" and affixed his signatures thereunder. We are of the opinion that if only he had read the report carefully, he could never have come to the conclusion on the material before him that this is a fit case to issue notice under section 148. The important safeguards provided in sections 147 and 151 were lightly treated by the Income-tax Officer as well as by the Commissioner. Both of them appear to ....