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TMI Blog2024 (10) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... en material placed on record and the conclusion reached by the authority in respect of an issue, since they help in discerning the manner in which the conclusion is reached by the concerned authority. In the present case, there is no such material to come to the conclusion that PCIT granted approval after considering the reasons assigned by the Assessing Officer. The decision rendered in Meenakshi Overseas Pvt. Ltd. [ 2015 (12) TMI 1905 - DELHI HIGH COURT] is therefore not applicable to the facts and circumstances of the present case. Mere repeating of the words of the statute, mere rubber stamping of the letter seeking sanction or using similar words like Yes, I am satisfied will not satisfy the requirement of law. Hence, we are of the firm view that PCIT has failed to satisfactorily record his concurrence. The mere use 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. - HON'BLE MR. JUSTICE YASHWANT VARMA AND HON' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grant of sanction under Section 151 of the Act. It has been submitted that PCIT, who is the competent authority, has granted sanction without application of mind. It is submitted that PCIT has approved issuance of impugned notice by merely endorsing his signatures on the file in a routine and mechanical manner by simply writing I am satisfied . It has been further submitted that if PCIT had delved into the issue, he would have discovered that there is no specific allegation in the reasons recorded qua the petitioner with the information given by Investigation Wing and therefore there was no independent conclusion of the Assessing Officer [ AO ] to believe that income has escaped assessment. It is also submitted that the sanction is vitiated as PCIT was influenced by the sanction of the Additional Commissioner Income Tax [ ACIT ] and for the said reason, the impugned notice under Section 148 consequent to the grant of approval is liable to be quashed. 9. Per contra, learned counsel representing the Revenue has submitted that the statutory requirement is only to the extent of grant of approval by the PCIT on the reasons recorded by the AO. It is submitted that PCIT had examined the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e return originally filed was assessed under Section 143 (3) of the Act. Further, where the reopening of an assessment is sought to be made after the expiry of four years from the end of the relevant AY, a further check by the further superior officer is contemplated. 12. We take note that request for approval under Section 151 of the Act in a printed format (Annexure P-6) was placed before the ACIT, who after according his satisfaction, placed the same before the PCIT. PCIT granted the approval on the very same day. The approval accorded by the ACIT and PCIT in Column No. 11 12 are extracted below:- 11. Whether the Addl. CIT is satisfied on the reasons recorded by AO that it is a fit Case for the issue of notice u/s 148. I am satisfied Sd/- (G.G. Kamei) Addl. CIT, Range-5, New Delhi Dated 22.03.2017 12. Whether the Pr. Commissioner is satisfied: On the reasons recorded by the AO that it is a fit case for the issue of notice u/s 148. Yes I am satisfied Sd/- P.K. Gupta) Pr. Commissioner of Income Tax-2, New Delhi Dated: 22.03.2017 13. The satisfaction arrived at by the concerned Officer should be discernible from the sanction order passed under Section 151 of the Act. However, as ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent 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 [2011 SCC OnLine Del 472] 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: - 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 u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce 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 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 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 sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue of notice under Section 148 is hereby given in the above-mentioned case, you are, accordingly directed to issue notice under Section 148 and submit a compliance report in this regard at the earliest. 17. Such letter sent by the Additional CIT to the ITO clearly reveals that the sanction was accorded after due application of mind and on considering the reasons narrated by the Assessing Officer. However, in the present case, there is no such material to come to the conclusion that PCIT granted approval after considering the reasons assigned by the Assessing Officer. The decision rendered in Meenakshi Overseas Pvt. Ltd. (supra), is therefore not applicable to the facts and circumstances of the present case. 18. Dealing with an identical challenge where the competent authority just recorded Yes I am satisfied , the Madhya Pradesh High Court in the case of CIT Jabalpur vs. S. Goyanka Lime Chemicals Ltd. ITA 82/2012, held as under:- 7. We have considered the rival contentions and we find that while according sanction, the Joint Commissioner, Income Tax has only recorded so Yes, I am satisfied . In the case of Arjun Singh (supra), the same question has been considered by a Coordinate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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