TaxTMI 
TaxTMI 
2026 (5) TMI 401
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....essment competed u/s. 147 r.w.s 144B of the IT Act in consequence to the issue of notice u/s. 148 is bad in law and without jurisdiction as the approval granted by ld PCIT-I, Agra is mechanical and not in accordance with law as required u/s. 151 of the IT Act. Hence, the entire reassessment proceedings deserve to be quashed." 3. The additional ground as preliminary issue raised by the appellant assessee, challenging the validity of assumption of jurisdiction u/s. 147 of the Act by the ld A.O. being passed on mechanical approval u/s. 151 of the Act, goes to the root of the matter. We deem it fit to address the same first. The additional ground is accordingly admitted. 4. We have perused the material available on record and heard the rival submissions. 5. Briefly stating the facts are that the appellant assessee filed his return of income for the A.Y. 2015-16 on 15.03.2016, declaring total income of Rs. 9,48,570/-. The appellant had shown Long Term Capital Gain of Rs. 51,82,545/- as exempt income under section 10(38) of the Income Tax Act, 1961. Based on information received through Insight Portal and Income Tax Return filed by the appellant, the AO observed that for the yea....
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....rder. 9. The single bench of this tribunal, vide order dated 26.11.2025 passed in ITA No. 386/Agr/2025 (A.Y. 2020-21) in Pawan Agrawal v. ITO, Mathura, to which, one of us is the author, has held that the approval in the manner noted herein above is not an approval in the manner known to law. The relevant Paras 4 to 6 read as under: "4. ....... This sort of approval granted u/s 151 of the Act was held to be approval granted without application of mind and construed as mechanical by the Hon'ble Madhya Pradesh High Court in the case of CIT Vs. S. Goyenka Lime and Chemicals Ltd reported in 56 taxmann.com 390 (MP HC). The Special Leave Petition (SLP) filed by the revenue against this decision was dismissed by the Hon'ble Supreme Court reported in 64 taxmann.com 313. Further, I find that the Hon'ble Delhi High court in the case of PCIT Vs. NC Cables Ltd reported in 391 ITR 11 (Del) had also held the same, wherein, the approving authority had merely stated "approved" in the proforma while granting approval in terms of section 151 of the Act. This approval was held by the Hon'ble Delhi High court to be a mechanical approval. The relevant observation of the Hon'ble Delhi Hi....
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....nd of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice. (2) In a case other than a case falling under sub-section (1), no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of Joint Commissioner, unless the Joint Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice. (3) For the purposes of sub-section (1) and sub-section (2), the Principal Chief Commissioner or the Chief Commissioner or the Principal Commissioner or the Commissioner or the Joint Commissioner, as the case may be, 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 issu....
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....manner of recording the approval granted by the prescribed authority under Section 151 of the Act for reopening of assessment proceedings as per Section 148 of the Act. ** ** 17. Thus, the incidental question which emanates at this juncture is whether simply penning down "Yes" would suffice requisite satisfaction as per Section 151 of the Act. Reference can be drawn from the decision of this Court in N.C. Cables Ltd., wherein, the usage of the expression "approved" was considered to be merely ritualistic and formal rather than meaningful. The relevant paragraph of the said decision reads as under:- "11. Section 151 of the Act clearly stipulates that the Commissioner of Income-tax (Appeals), who is the competent authority to authorize 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 approved Income-tax (Appeals) has to record elaborate reasons for agreeing with the noting put up. At the same time, satisfaction has to be recorded ....
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....supersession'. The most that could be said for the stock reason is that it is a general description of the process adopted in arriving at a conclusion. 28 If that had been done, facts on service records of officers considered by the Selection Committee would have been correlated to the conclusions reached. Reasons are the links between the materials on which certain conclusions are based and the actual conclusions. They disclose how the mind is applied to the subject-matter for a decision whether it is purely administrative or quasi-judicial. They should reveal a rational nexus between the facts considered and the conclusions reached. Only in this way can opinions or decisions recorded be shown to be manifestly just and reasonable. "[emphasis supplied]." 19. In the case of Chhugamal Rajpal, the Hon'ble Supreme Court refused to consider the affixing of signature alongwith the noting "Yes" as valid approval and had held as under:- "5. --- 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 opini....
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.... said decision distinguishes the approval granted using the expression "Yes" by citing Central India Electric Supply, which has already been discussed above. The decision in the case of Experian Developers P. Ltd. would also not come to the rescue of the Revenue as the same does not deal with the expression used in the instant appeal at the time of granting of approval 23. Therefore, it is seen that the PCIT has failed to satisfactorily record its concurrence. By no prudent stretch of imagination, the expression "Yes" could be considered to be a valid approval In fact, the approval in the instant case is apparently akin to the rubber stamping of "Yes" in the case of Central India Electric Supply." 17. The decision in Pioneer Town Planners (P.) Ltd. (supra) case has been followed by this Court in number of other cases including the recent case of Pr. CIT v. MDLR Hotels (P.) Ltd. [IT Appeal No. 593 of 2023, dated 30-7-2024]. 18. As noticed aforesaid, we are of the firm opinion that the PCCIT has failed to satisfactorily record its concurrence. By no stretch of imagination, the mere use of expression "approval" could be considered to be a valid approval as t....
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....2379653779 64,530,649,356 VDL 64,194,219,901 16356031168 47,838,188,733 VEL 16,331,855,448 4454592437 11,877,263,011 VSL 154,472,355,369 50735554674 103,736,800,695 VSPL 57,285,990,365 18694379653 38,591,610,712 VWL 47,973,121,393 10282828775 37,690,292,618 Grand 428,584,729,611 124,319,924,486 304,264,805,125 Amt. 42,858.47 12,431.99 30,426.48 4. In the approval, the Principal Chief Commissioner of Income Tax ("PCCIT") states, "Based on the material available on record and careful consideration of the same, I am satisfied that it is a fit case to issue notice under Section 148 of the IT Act. Hence, draft order submitted by the Assessing Officer under Section 148A(d) of the Act is hereby approved" In our view, this is an incorrect statement made by the PCCIT that the record has been carefully considered before granting of approval. We say this because the record would certainly have contained the notice issued under Section 148A(d) of the Act and the information annexed to that notice states escapement of income in the sum of Rs. 42858,47,29,661/-, whereas the amount mentioned in the ord....