KALINGA GUEST HOUSE AND RESORTS,ANGUL vs. INCOME TAX OFFICER, ANGUL WARD, ANGUL, ANGUL

It was submission that in the approval by the JCIT has only mentioned “ Yes” and has not given any reason or mention anything about his satisfaction. It was submitted that in view of the Hon’ble Madhya & 241/CTK/2025 Pradesh High Court in the case of S. Goyanka Lime & Chemical Ltd., reported in [2015] 56 taxmann.com 390 (MP) which has been approved by the Hon’ble Supreme Court in [2015] 64 Taxmannn.com 313 (SC), the approval granted by the ld. JCIT is liable to be quashed.

In reply Ld. CIT DR submitted that there is no requirement under the provision of section 151 of the Act that any approval needs to be taken. It was the submission that the ld. CIT(A) has considered the issue in depth when he has rejected the claim of the assessee in regard to approvals. Ld. CIT-DR reiterated the findings of the ld. CIT (A).

We have considered the rival submissions. A perusal of the decision of the Hon’ble Madhya Pradesh High Court in the case of S.Goyanka Lime & Chemical Ltd, referred to supra, shows that the Hon’ble Madhya Pradesh High Court has held that where the Joint Commissioner recorded satisfaction in mechanical manner and without application of mind to accord sanction for issuing notice u/s.148 of the Act, the reopening of assessment was invalid. The relevant observations of the Hon’ble M.P.High Court in paras 7 to 10 are 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 Bench of this Court and the following principles are laid 'The Commissioner acted, of course, mechanically in order to discharge his statutory obligation properly in the matter of recording sanction as he merely wrote on the format "Yes, I am satisfied" which indicates as if he was to sign only on the dotted line. Even otherwise also, the exercise is shown to have been performed in less than 24 hours of time which also goes to indicate that the Commissioner did not apply his mind at all while granting sanction. The satisfaction has to be with objectivity on objective material.'

If the case in hand is analysed on the basis of the aforesaid principle, the mechanical way of recording satisfaction by the Joint Commissioner, which accords sanction for issuing notice under section 148, is clearly unsustainable and we find that on such consideration both the appellate authorities have interfered into the matter. In doing so, no error has been committed warranting reconsideration.

As far as explanation to Section 151, brought into force by Finance Act, 2008 is concerned, the same only pertains to issuance of notice and not with regard to the manner of recording satisfaction. That being so, the said amended provision does not help the revenue.

In view of the concurrent findings recorded by the learned appellate authorities and the law laid down in the case of Arjun Singh (supra), we see no question of law involved in the matter, warranting reconsideration. 6. This decision of the Hon’ble Madhya Pradesh High Court has been approved by dismissal of the SLP. Consequently the findings of the Hon’ble Madhhya Pradesh High Court has obtained finality and also become the rule. A perusal of the approval granted by the ld. JCIT shows that the words used is only “Yes”. Thus, the Hon’ble Madhya Pradesh High Court has held that just writing the term “Yes, I am satisfied” is mechanical approval and non-application of mind. Obviously, writing just “Yes” would also be on similar line. This being so, as it is noticed that the approval granted in a mechanical manner and without application of mind, respectfully following the principle laid down by the Hon’ble Madhya Pradesh High Court which has been approved by the Hon’ble Supreme Court, the approval granted for initiation of the reopening the by issuance of notice u/s 148 of the Act, stands quashed and consequential assessment also stands annulled for both the assessment years 2103-14 ad 2014-15.