TaxTMI 
TaxTMI 
2026 (6) TMI 1188
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....ate that the approval under section 151 of the Act was accorded mechanically, on an erroneous factual foundation, and without demonstrating satisfaction on the correctness or adequacy of the reasons, thereby vitiating the entire reassessment. 3. BECAUSE, the Ld. CIT(A) erred in holding that a generalized Investigation Wing report constitutes valid material for reopening, even though no specific material, no link, no transaction trail, and no adverse finding was ever shown connecting the appellant with any alleged operator or accommodation entry network. 4. BECAUSE, the Ld. CIT(A) failed to appreciate that the AO did not furnish copies of any adverse material relied upon, provide any statement or underlying documents, allow cross-examination of any person allegedly involved, despite repeated requests by the appellant, thereby violating the principles of natural justice and rendering the addition unsustainable. 5. BECAUSE, the Ld. CIT(A) erred in upholding the addition of Rs. 1,75,01,430/- under section 68 despite the appellant furnishing complete documentary evidence including payment proof, allotment letter, DMAT statement, contract notes, sale through BS....
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....e reassessment proceedings initiated by the AO without obtaining valid statutory prior approval of the prescribed authority as per section 151 of the Act are bad in law and liable to be quashed. He further submitted that the purported approval u/s. 151 of the Act is illegal, bad in law and also without application of mind. 3. In this regard, ld. AR submitted written submissions as under :- 2. The statute vide section 151 of the Act mandates that "No Notice shall be issued" under section 148 by the Assessing officer, after the expiry of a period of four years from the end of relevant assessment year, unless the Principal Commissioner is satisfied on the reasons recorded by the Assessing officer that it is fit case for the issue of Notice under section 148 of the Act. From the bare reading of the section as exists on the book it is apparent that section 151 is not a provision which enables the Revenue to do something. It is a restriction on the Revenue prohibiting it from doing something. It is a guidance to do such things in the manner provided in section 151. This is a provision to protect the interest of the Assessee. That section 151 puts a restriction on the issue of....
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....er Section 151 of the Act is also a condition precedent to issue the reopening notice. Therefore, the Assessee is entitled to ask the Revenue whether or not, the condition precedent for reopening the assessment, i.e. date of posting of the notice and a copy of the sanction order from the superior authority as provided under Section 151 of the Act. However, this attitude of not supplying copy of the necessary sanction to the Petitioner when asked for, is not justified in the least. This is more so as it would be open to the Petitioner also to challenge that the Sanctioning Authority had not applied his mind while granting the sanction, making the reopening notice bad. Besides, also whether it has obtained from the specific authority provided in Section 151 of the Act can also be subject of jurisdictional challenge to the reopening notice. 7. In this background of the matter, inviting attention to the case under consideration, it is submitted that in the Form for obtaining approval of Principal Commissioner of Income Tax, the approving authority has stated 'In view of reasons recorded by AO, I am satisfied that income has escaped assessment. It is therefore, a fit case for i....
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....ed sanction accorded by the learned Principal Commissioner of Income Tax-1, Agra under section 151, containing a bald endorsement "In view of reasons recorded by AO, I am satisfied that income has escaped assessment. It is therefore, a fit case for issue of the notice u/s 148 of the Act", neither discloses independent satisfaction nor reflects application of mind to the reasons recorded by the Assessing Officer. He submitted that such a ritualistic and non-speaking approval strikes at the very root of jurisdiction and defeats the mandatory safeguard engrafted by the Legislature under section 151 of the Act. He further submitted that Hon'ble Courts consistently held that sanction is a condition precedent and not a procedural formality, and its non-compliance renders the notice under section 148 void ab initio. Consequently, he submitted that the assumption of jurisdiction itself being invalid, the impugned reassessment proceedings and the assessment order passed in pursuance thereof are liable to be quashed as without authority of law. He accordingly prayed that the appeal may be allowed and quash the assessment order. 5. On the other hand, ld. DR of the Revenue relied on the ord....
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.... of expression "Yes, I am Satisfied" cannot be considered to be a valid approval as the same does not reflect an independent application of mind. The grant of approval in such manner is thus flawed in law. Approval granted by the PCIT for issuance of notice u/s. 148 of the Act is not valid. Assessee appeal allowed." * In the case of CIT vs. Goyanka Lime & Chemical Ltd. (2015) 64 taxmann.com 313 (SC) the Hon'ble Supreme Court examined the identical issue as to according the sanction for reopening the assessment u/s 148 of the Act by merely recording "Yes. I am satisfied" and held that re-opening on the basis of mechanical sanction is invalid. * ITAT Agra Bench in ITA No. 317/Agr/2025 in the case of Banarsi Lal Vs ITO 2(2)(1), Firozabad (U.P) vide order dated 20.03.2026 (Pages-22-26) faced with a situation of conflicting High Court Judgements on issue of approval under section 151 of the Act, resolving the issue in favour of the Assessee held as under: "5. We find that the various decisions quoted by both the Ld. AR as well as the Ld. DR are non-jurisdictional high courts giving conflicting decisions. We find that the Hon'ble Supreme Court in the c....