TaxTMI 
TaxTMI 
2026 (5) TMI 997
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....r & Date of order 328/D/23 2016-17 CIT(A)-28, New Delhi Appeal No. 26/10183/2019-20 Appeal No. 26/11093/2015-16 ACIT, CC-14 31.12.2019 28.12.2021 787/D/23 2016-17 CIT(A)-28, New Delhi Appeal No. 26/10183/2019-20 Appeal No. 26/11093/2015-16 ACIT, CC-14 31.12.2019 28.12.2021 2. At the time of hearing our attention was drawn to ground No. 1 by which assessee had contended that the approval granted u/s. 151 of the Act by the competent authority was mechanical in nature, therefore, the assumption of jurisdiction u/s. 147/148 of the Act is vitiated and the assessment order is liable to be quashed. Ld. DR defended the issue by submitting that the approval is only an administrative function and decision in PCIT-6, Vs. Meenakshi Overseas Ltd. ITA No. 651/2015 has been relied. 3. We find that the case of the present assessee in facts and circumstances is similar to that of Sandhya Sharma whose case was also reopened on the basis of similar information and Coordinate Bench in the case of Sandhya Sharma Vs. ACIT, ITA No. 2019/Del/2022 for the very same assessment year and also taking into consideration the contentions of ld. DR has held that the approval granted b....
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....be made in a mechanical manner, however, as noted by the Division Bench of the Calcutta High Court in Prem Chand Shaw (Jaiswal) v. Asstt. CIT [2016] 67 taxmann.com 339/238 Taxman 423/383 ITR 597, the mere fact that the sanctioning authority did not record his satisfaction in so many words would not render invalid the sanction granted under section 151(2) when the reasons on the basis on the basis of which sanction was sought could not be assailed and even an appellate authority is not required to give reasons when it agrees with the finding unless statute or rules so requires. The decision in United Electrical Co. Pvt. Ltd. (supra), as relied upon by the petitioner is distinguishable from the present case, as in the said case, there was no material on record to provide foundation for Assessing Officer's reasons to believe. Therefore, it was held that the recording of the satisfaction by the AO was unjustified and without independent application of mind. However, there is no requirement to provide elaborate reasoning to arrive at a finding of approval when the Principal Commissioner is satisfied with the reasons recorded by the AO. Similarly, in Virbhadra Singh v. Deputy Commiss....
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....independent application of mind by the sanctioning authorities for according approval. Whilst it is the settled position in law that the sanctioning authority is required to apply his mind and the grant of approval must not be made in a mechanical manner, however, as noted by the Division Bench of the Hon'ble Calcutta High Court in Prem Chand Shaw (Jaiswal) vs. ACIT 383 ITR 597, the mere fact that the sanctioning authority did not record his satisfaction in so many words would not render invalid the sanction granted under section 151(2) when the reasons on the basis on the basis of which sanction was sought could not be assailed and even an appellate authority is not required to give reasons when it agrees with the finding unless statute or rules so requires." Para 40. "Similar view has been expressed by the Hon'ble High Court of Delhi in the case Experion Developers Pvt. Ltd . Vs. ACIT 115 Taxman 338." 4.3 As argued during the course of hearing, it is evident from the page No. 37 of Paper Book filed by the assessee that the satisfaction has been recorded by the Approving Authority i.e. Joint CIT on 26.03.2019 by making following noting/remark in ....
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.... further. The ld AR submitted before us that the approval is mechanical by relying on the decision of Hon'ble Delhi High Court in the case of Vinod Kumar Solanki (supra). At the same time, ld DR heavily relied on the decisions of Meenakshi Overseas Pvt Ltd (supra), Experion Developers (P) Ltd (supra) and Pioneer Town Planners P Ltd (supra), wherein the issue of reasons recorded by mentioning the words, 'Yes, I am Satisfied'. In which the Hon'ble Delhi High Court has decided the issue in favour of the revenue. 8. After considering the submissions of both sides, we observe that the decision relied by the assessee in the case of Vinod Kumar Solanki (supra) is pronounced on 14.08.2024 in which the similar issue of approval was considered and decided in favour of the assessee by considering the earlier decision which are also relied by the ld DR. It is also fact that the decisions relied by the ld DR were decided prior and also considered the similar views by the Hon'ble High Court on the issue raised by the assessee before us. Therefore, we are bound to follow the recent decision of the Hon'ble Court and accordingly, we are inclined to decide the issue of mechanical approval t....
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....chal Kumar Chatterjee (1974) 93 ITR 130 (Cal) and Govinda Choudhury and Sons case (1977) 109 ITR 370 (Orissa) are examined, the absence of reasons by the Assessing Officer does not exist. This is so as along with the proforma, reasons set out by the Assessing Officer were, in fact, given. However, in the instant case, the manner in which the proforma was stamped amounting to approval by the Board leaves much to be desired. It is a case where literally a mere stamp is affixed. It is signed by an Under Secretary underneath a stamped Yes against the column which queried as to whether the approval of the Board had been taken. Rubber stamping of underlying material is hardly a process which can get the imprimatur of this court as it suggests that the decision has been taken in a mechanical manner. Even if the reasoning set out by the Income-tax Officer was to be agreed upon, theleast which is expected is that an appropriate endorsement is made in this behalf setting out brief reasons . Reasons are the link between the material placed on record and the conclusion reached by an authority in respect of an issue, since they help in discerning the manner in which conclusion is reached by the....
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....ns as of little importance. They have substituted the form for the substance." 20. This Court, while following Chhugamal Rajpal in the case of Ess Adv. (Mauritius) S. N. C. Et Compagnie v. ACIT [2021 SCC OnLine Del 3613], wherein, while granting the approval, the ACIT "This is fit case for issue of notice under section 148 of - has written the Income-tax Act, 1961. Approved", had held that the said approval would only amount to endorsement of language used in Section 151 of the Act and would not reflect any independent application of mind. Thus, the same was considered to be flawed in law. 21. The salient aspect which emerges out of the foregoing discussion is that the satisfaction arrived at by the prescribed authority under Section 151 of the Act must be clearly discernible from the expression used at the time of affixing its signature while according approval for reassessment under Section 148 of the Act. The said approval cannot be granted in a mechanical manner as it acts as a linkage between the facts considered and conclusion reached. In the instant case, merely appending the phrase "Yes" does not appropriately align with the mandate of Section 151 of the A....