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TMI Blog2024 (8) TMI 1125X X X X Extracts X X X X X X X X Extracts X X X X ..... r [ 1973 (9) TMI 99 - SUPREME COURT ] The grant of approval by PCCIT in the printed format without any line of reason does not fulfil the requirement of Section 151 of the Act. 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 the same does not reflect any independent application of mind. - HON'BLE MR. JUSTICE YASHWANT VARMA AND HON'BLE MR. JUSTICE RAVINDER DUDEJA For the Petitioner Through: Mr. Kapil Goel and Mr. Sandeep Goel, Advs. For the Respondent Through: Mr. Aseem Chawla, Sr. SC with Ms. Pratishtha Chaudhary and Mr. Naveen Rohila, Advs. JUDGMENT RAVINDER DUDEJA, J. 1. Petitioner has filed the present Writ Petition under Articles 226 227 of the Constitution of India, praying for the following reliefs: A. Issue of a writ of certiorari, mandamus, prohibition or any other writ and/or order and or directions quashing the impugned foundational SCN issued u/s 148A (b) dated 22.02.2023, which is totally perverse and issued without application of mind, based on borrowed satisfaction and without considering previous scrutiny asst. u/s 143 (3); issued in vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 023, the impugned Show Cause Notice [ SCN ] was issued under Section 148A (b) proposing reopening of the case of the petitioner under Section 148 for the Assessment Year [ AY ] 2016-17. 5. On 20.03.2023, the impugned order was passed under Section 148A (d) treating the case as fit for reopening under Section 148, quantifying the income escaping assessment at Rs. 3,15,09,010/- for the subject AY 2016-17. 6. As a consequence to the impugned order passed under Section 148A (d) of the Act, notice under Section 148 of the Act was issued on 20.03.2023. 7. Feeling aggrieved, the petitioner has filed the present writ petition challenging the impugned notice under 148A of the Act as also the order passed under Section 148A (d). Petitioner has also laid challenge to the grant of sanction under Section 151 of the Act. 8. During arguments, learned counsel for the petitioner has restricted the challenge only to the grant of sanction under Section 151 of the Act, stating that the same has been granted mechanically and without due application of mind, and therefore, the grant of sanction is liable to be declared as nullity and invalid, and resultantly, the impugned order passed under Section 148A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 20.03.2023. PCCIT granted the approval the same day. The approval accorded by the PCCIT in Column No. 22 is extracted below:- 22 Reasons for according approval/rejection by the as specified authority to order u/s 148A (d) AND/OR issuance of notice under section 148of the Income Tax Act,1961? Remarks: Approved u/s 148A (d) a fit case. Name: RAJAT BANSAL Designation: PCCIT, DELHI Date: 20/03/2023 15. It is evident that the approval order is bereft of any reasons. It does not even refer to any material that may have weighed in the grant of approval. The mere appending of the word approved by the PCCIT while granting approval under Section 151 to the re-opening under Section 148 is not enough. While the PCCIT is not required to record elaborate reasons, he has to record satisfaction after application of mind. The approval is a safeguard and has to be meaningful and not merely ritualistic or formal. The reasons are the link between material placed on record and the conclusion reached by the authority in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was taken in a mechanical manner. Paragraph 19 of the said decision is reproduced as under: - 19. In respect of the first plea, if the judgments in Chhugamal Rajpal (1971) 79 ITR 603 (SC), Chanchal 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, the least which is expected is that an appropriate endorsement is made in this behalf setting out brief reasons. Reasons a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were lightly treated by the Income Tax Officer as well as by the Commissioner. Both of them appear to have taken the duty imposed on them under those provisions 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 conclusi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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