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TMI Blog2025 (1) TMI 503X X X X Extracts X X X X X X X X Extracts X X X X ..... of N.C. Cables[ 2017 (1) TMI 1036 - DELHI HIGH COURT] ; Pioneer Town Planners[ 2024 (3) TMI 828 - DELHI HIGH COURT] ; Manujendra Shah [ 2023 (7) TMI 1093 - DELHI HIGH COURT] have struck a balance and declined to endorse a rubber stamp approval granted by the Competent Authority under s. 151 of the Act. We see palpable merit in the plea of the assessee that the sanction granted under s. 151 of the Act is extraneous and an empty formality and do not accord with its salutary purpose. Validity of re-assessment order is contingent upon the valid approval under s. 151 of the Act. Where the identity of sanctioning authority itself is under cloud and coupled with this, the requirement of law to grant speaking approval under s. 151 of the Act is not found to be fulfilled, the notice issued under s. 148 as a sequel to such sanction and resultant assessment would also to be vitiated in law. Re-assessment proceedings under s. 147 as a consequence of nonest and invalid approval is without sanction of law and consequently, the re-assessment order in question is bad in law. Hence, the jurisdiction usurped by the AO based on such approval is required to be cancelled and set aside. Appeal of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .03.2016 was issued under s. 148 for AY 2011-12 and served upon the assessee with a view to assess the alleged escapement of chargeable income. 4.1. The Ld. Counsel for the assessee at this stage, challenged the legality of assumption of jurisdiction under s. 147 r.w.s. 148 of the Act. The Ld. Counsel for the assessee submitted that the AO did not meet the pre-requisites of s. 147 of the Act and thus, the proceedings initiated under s. 147 is without jurisdiction and thus a nullity. The Ld. Counsel, in the same breath, also pointed out that the requirement of s. 151 of the Act has also not been satisfied in the instant case while recording concurrence with the so-called reasons forwarded to the Ld. Addl. CIT by the Ld.AO for sanction under s. 151 of the Act. The Ld. Counsel for the assessee exhorted that powers vested under s. 147 are inter-alia contingent upon proper sanction of the Competent Authority under s. 151 of the Act and in the absence of proper sanction, the issuance of notice under s. 148 stands vitiated and rendered nonest in law. 4.2. The Ld. Counsel for the assessee alleged that the act of sanction by the Ld. Addl. CIT is a mere tokenism and a mechanical action. Besi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l submitted that the jurisdictional High Court as well as the Hon'ble Courts of different jurisdictions have echoed in chorus that simply noting down the expressions such as 'Yes' or action under section 148 approved etc. against the column of sanction without application of mind being discernible, cannot be considered to be a proper and valid sanction by the Competent Authority. The Ld. counsel referred to judgments rendered in the case of PCIT vs. N.C. Cables Ltd., 391 ITR 11 (Delhi); Pr.CIT vs. Pioneer Town Planners Pvt. Ltd., ITA No.91/2019 judgment dated 20.02.2014 (Delhi High Court); CIT Jabalpur vs. M/s. S. Goyanka Lime and Chemicals Ltd., ITA No.82 of 2012 judgment dated 14.01.2014 (M.P. High Court) (SLP by the Revenue dismissed in CIT vs. S. Goyanka Lime and Chemicals Lid.. (2023) 453 ITR 242 (SC); Manujendra Shah vs. CIT, WP(C) 12677/2018 judgment dated 18.07.2023 and plethora of Co- ordinate Bench judgments to contend that the Competent Authority while discharging statutory obligation under s. 151 of the Act is not expected to function mechanically and accord sanction on dotted lines. The satisfaction of the Competent Authority must be recorded with some degr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act into motion. As the law envisage, prior permission of superior authority as statutorily designated, is a sine qua non for initiation of action under s. 147/148 of the Act. The Addl.CIT, in the instant case, is stated to be a Competent Authority statutorily designated for this purpose. It was thus, on the basis of satisfaction and approval of the Addl.CIT that the proceedings for reassessment was initiated and culminated in re-assessment order under challenge. The legitimacy of satisfaction of the purported Addl.CIT for the purposes of sanction under s. 151 has however, been called into question in the instant case. 7. As self-evident from the approval memo, the Addl.CIT who claimed to be satisfied on the reasons recorded is unidentifiable. A signature has been put granting approval but without writing the name, designation etc. of the authority who claims to be a Competent Authority for the purposes of s. 151 of the Act. In the approval memo, no indication towards whereabouts of the Competent Authority is discernible. The approval memo without the identity of the authority concerned itself vitiates the approval giving rise to the re-assessment proceedings. Such approval wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich induced him to obtain satisfaction on the alleged escapement claimed by the AO. 8.2. Under these circumstances, we compelled to think that approval under s. 151 grossly suffers from the vice of non-application of mind. The Hon ble Delhi High Court in the case of N.C. Cables; Pioneer Town Planners; Manujendra Shah (supra) have struck a balance and declined to endorse a rubber stamp approval granted by the Competent Authority under s. 151 of the Act. 9. In the light of delineations made, we see palpable merit in the plea of the assessee that the sanction granted under s. 151 of the Act is extraneous and an empty formality and do not accord with its salutary purpose. Notwithstanding, in the absence of identity of the person on record who granted sanction under s. 151 of the Act, such so-called sanction is a dead document devoid of any semblance in the eyes of law. Needless to say, the validity of re-assessment order is contingent upon the valid approval under s. 151 of the Act. Where the identity of sanctioning authority itself is under cloud and coupled with this, the requirement of law to grant speaking approval under s. 151 of the Act is not found to be fulfilled, the notice i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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