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Facts
The assessee filed its return of income which was treated as non-est. The AO sought to reopen the assessment under Section 147 based on information regarding agricultural income. The approval for reopening under Section 151 was obtained mechanically, without proper application of mind by the approving authority.
Held
The Tribunal held that the approval for reopening under Section 151 was mechanical and not in accordance with law, as established by various High Court and Supreme Court decisions. Consequently, the reassessment proceedings were quashed.
Key Issues
Whether the reopening of assessment under Section 147 was valid when the approval under Section 151 was granted mechanically without application of mind.
Sections Cited
147, 148, 151, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AGRA BENCH,(DB
Before: SHRI M. BALAGANESH, HON’BLE & SHRI SUNIL KUMAR SINGH, HON’BLE
ORDER
PER M. BALAGANESH, ACCOUNTANT MEMBER
This appeal has been filed by the assessee against the order dated 15.05.2025 passed by the Learned Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “the CIT(A)"] u/s. 250 of the Income tax Act, 1961 (hereinafter referred to as "the Act"] for the assessment year 2014-15.
The assessee had raised additional grounds before us challenging the validity of assumption of jurisdiction u/s 147 of the Act. These additional grounds go to the root of the matter and the facts relevant for its adjudication are placed on record. Hence, we admit the additional grounds and take up the same first for adjudication.
Banarsi Lal 3. We have heard the rival submissions and perused the material available on record. The assessee has filed its return of income on 7.6.2016 for AY 2014-15 declaring total income of Rs. 1,85,440/-. This return was treated as non-est by the ld AO. The Ld. AO noted that he had received information that assessee had sold agricultural lands and had derived income from agricultural activities. On the basis of information received, the Ld. AO sought to reopen the assessment of the assessee u/s 147 of the Act vide issuance of notice u/s 148 of the Act on 2.2.2017. The assessee filed return of income on 27.3.2017 in response to notice issued u/s 148 of the Act. The reasons recorded for reopening the assessment together with the approval granted by the Additional CIT, Range 2(2), Firozabad in terms of section 151 of the Act. The approval granted by the Additional CIT, Range 2(2), Firozabad is enclosed in Page 18 of the Paper Book. On perusal of the proforma seeking approval u/s 151 of the Act, we find that the Ld. Addl CIT had merely stated that he is satisfied that this is fit case for reopening. This sort of approval granted u/s 151 of the Act was held to be approval granted without application of mind and construed as mechanical by the Hon’ble Madhya Pradesh High Court in the case of CIT Vs. S. Goyenka Lime and Chemicals Ltd reported in 56 taxmann.com 390 (MP HC). The Special Leave Petition (SLP) filed by the revenue against this decision was dismissed by the Hon'ble Supreme Court reported in 64 taxmann.com 313. Further, we find that the Hon’ble Delhi High court in the case of PCIT Vs. NC Cables Ltd Banarsi Lal reported in 391 ITR 11 (Del) had also held the same, wherein, the approving authority had merely stated “approved” in the proforma while granting approval in terms of section 151 of the Act. This approval was held by the Hon’ble Delhi High court to be a mechanical approval. The Hon’ble Delhi High Court in the recent decision in the case of SBC Minerals P Ltd. vs ACIT reported in 475 ITR 360 (Del) had also held that similar kind of approval granted in a mechanical manner would vitiate the basic assumption of jurisdiction of the Ld. AO resulting in quashing of reassessment proceedings. Similar view was also taken by the Hon’ble Bombay High Court in the case of Vodafone India Ltd. vs DCIT reported in 464 ITR 385 (Bom).
Per Contra, the Ld. DR vehemently relied on the following decisions of Hon’ble High Courts to drive home the point where necessary sanction to issue notice under section 148 of the Act was obtained from Principal Commissioner of Income Tax as per provisions of section 151 of the Act, the Principal Commissioner was not required to provide elaborate reasoning to arrive at a finding of approval when he was satisfied with reasons recorded by Assessing Officer :- a) Experion Developers P Ltd. vs ACIT reported in 422 ITR 355 (Del HC) b) Virbhadra Singh vs DCIT reported in 88 taxmann.com 88 (HP HC) c) Sonia Gandhi vs ACIT reported in 407 ITR 594 (Del HC)
Banarsi Lal 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 case of CIT vs Vegetable Products Ltd reported in 88 ITR 192 (SC) had held that when there are conflicting decisions of non- jurisdictional high courts on the same issue, then the construction that is favourable to the assessee need to be adopted. Respectfully following the same, we hold that the reopening has been made in the instant case by not taking approval u/s 151 of the Act from the competent authority in the manner known to law. Accordingly, the entire reassessment proceedings are hereby quashed. Hence, one of the additional grounds challenging the validity of assumption of jurisdiction u/s 147 of the Act is allowed in the above mentioned terms. Since the reassessment is quashed, the other legal grounds raised by the assessee as well as the grounds raised by the assessee on merits need not be adjudicated and they are left open.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 20.03.2026