“mechanical approval”

ReassessmentSection 151Section 1511,395 judgments

The decision most relied on for mechanical approval is PCIT v. Shiv Kumar Nayyar (163 Taxmann.com 9), cited in 597 judgments on BharatTax.

Leading authorities on mechanical approval

PCIT v. Shiv Kumar Nayyar

163 Taxmann.com 9 · 2024 · High Court

597

citing judgments

Approval under Section 153D for search assessments is invalid if granted mechanically, hastily, or without due application of mind, such as on the same day as the proposal or in a bunched manner. Such an invalid approval renders the consequential assessment order under Section 153A void ab initio.

CIT v. S. Goyanka Lime & Chemical Ltd.

64 Taxmann.com 313 · 2015 · Supreme Court

340

citing judgments

A mechanical approval by the prescribed authority under Section 151, made without independent application of mind, vitiates and renders the entire reassessment proceedings invalid. Such approvals, often indicated by brief, unreasoned endorsements, lead to the quashing of the reopening of assessment.

ACIT v. Sirajuddin& Co.

150 Taxmann.com 146 · 2023 · High Court

288

citing judgments

An approval under Section 153D of the Income Tax Act must demonstrate that the approving authority applied its mind to the draft assessment order, and a perfunctory or mechanical approval invalidates subsequent adjustments.

Shreelekha Damani v. DCIT

173 TTJ 332 · 2015 · ITAT

236

citing judgments

Approval granted by a superior authority under Section 153D in a mechanical or perfunctory manner, without proper application of mind, lacks legal sanctity and renders the subsequent assessment order null and void.

Principal Commissioner of Income-tax v. Subodh Agarwal

149 Taxmann.com 373 · 2023 · High Court

194

citing judgments

Approval of draft assessment orders under Section 153D must be granted with due application of mind, not mechanically. Approving multiple cases, such as 38 in a single day, without proper scrutiny amounts to mechanical approval, rendering the assessment invalid.

Madhya Pradesh in CIT v. S. Goyanka Lime & Chemicals Ltd.

56 Taxmann.com 390 · 2015 · High Court

188

citing judgments

A sanction for issuing a notice under section 148 is invalid if the sanctioning authority grants approval mechanically, merely recording 'Yes, I am satisfied' without proper application of mind to the reasons for reassessment. The authority must demonstrate proper consideration to fulfill the statutory obligation under section 151.

PCIT v. Anuj Bansal

165 Taxmann.com 2 · 2024 · High Court

181

citing judgments

An approval under Section 153D of the Income Tax Act, 1961, is considered mechanical and invalid if granted without application of mind and without perusing relevant assessment records, including seized material. This principle has been affirmed by multiple High Courts and the Supreme Court.

Vijayadevi Naval Kishore Bharatia v. Land Acquisition Officer

5 SCC 83 · 2003 · Supreme Court

167

citing judgments

Statutory approvals required under the Income Tax Act, particularly for assessments, must reflect a genuine application of mind by the approving authority and cannot be mechanical or granted without due consideration.

Judgments citing mechanical approval

Seawood Hospitality & Realty Pvt. Ltd., Mumbai vs. DCIT (CC) 3 (4), Mumbai

The appeals of the assessee are allowed on the legal aspect of quashing of reopening of assessment

ITA 92/MUM/2019[2010-11]Status: DisposedITAT Mumbai28 Oct 2020AY 2010-11

Bench: Shri Justice P P Bhatt & Shri M.Balaganesh, Am M/S. Seawoods Hospitality & Vs. Dcit(Cc)-3(4), Mumbai Realty Pvt. Ltd., Central Circle – 3(4) Room No.1915, 19Th Floor B/306-309, Business Dynasty Park Air India Building Jb Nagar, Opp. Sangam Cinema, Nariman Point Andheri (E) Mumbai – 400 021 Mumbai – 400 059 Pan/Gir No.Aamcs1472M (Appellant) .. (Respondent) & M/S. Sukaniya Properties Pvt. Ltd., Vs. Dcit (Cc)-3(4), B/306-309, Business Dynasty Mumbai Park, J B Nagar, Opp. Sangam Central Circle-3(4) Room No.1915, 19Th Floor Cinema, Andheri (E), Mumbai – 400 059 Air India Building Nariman Point Mumbai-400021 Pan/Gir No. Aadcs9585J (Appellant) .. (Respondent) M/S. Seawood Hospitaly & Realty P. Ltd. & M/S. Sukaniya Properties P. Ltd.

Section 132Section 133ASection 143(1)Section 143(2)Section 143(3)Section 148Section 151(1)Section 68

vehemently argued that the ld. PCIT had not applied his mind at all in the instant case for according approval and granted mechanical approval by simply stating “yes, it is a fit case for issue of notice u/s.148”. The ld. AR argued that the reasons recorded for reopening the assessment ... reopening of assessment. The ld. AR placed reliance on the following decisions in support of its contention that where the ld. PCIT gave the mechanical approval for reopening of assessment without due application of mind in terms of Section 151(1) of the Act, the said re- assessment requires

Vrc Township P Ltd., Delhi vs. ITO, New Delhi

In the result, appeal of the Assessee allowed

ITA 1503/DEL/2017[2007-08]Status: DisposedITAT Delhi14 Oct 2020AY 2007-08

Bench: Shri Bhavnesh Saini & Shri O.P. Kant

For Appellant: Shri Suresh K. Gupta, C.AFor Respondent: Ms. Shalini Verma, Sr. D.R

Section 143(1)Section 147Section 148Section 151Section 68

./2017 VRC Township P. Ltd., Delhi. authority for issuing of reopening notice has to be on due application of mind. It cannot be a mechanical approval without examining the proposal sent by the A.O. It appears from the reasons recorded above that the A.O. as well as Addl. CIT have ... sanction granted by the higher Authority for issuing of a reopening notice has to be on due application of mind. It cannot be an mechanical approval without examining the proposal sent by 12 ITA.No.1503/Del./2017 VRC Township P. Ltd., Delhi. the Assessing Officer. Prima facie, it appears

Chet Ram Verma, Etah vs. ITO Ward-3(1), Etah

ITA 783/AGR/2018[2012-13]Status: DisposedITAT Agra22 Sept 2020AY 2012-13

Bench: Shri Laliet Kumar & Dr. Mitha Lal Meena

Section 142(1)Section 143(2)Section 143(3)Section 147Section 148Section 151Section 50C

without jurisdiction as the approval/sanction as required u/s 151 of the I.T Act has not been obtained. The approval, if any, is a mechanical approval which is bad in law. On this legal ground also the assessment deserves to be quashed. 4. Because the Ld. CIT(A) has wrongly, illegally

M/S. Shree Balkishan Agarwal Glass Industries Ltd., Delhi vs. DCIT, New Delhi

In the result, the appeal filed by the assessee is allowed

ITA 5798/DEL/2016[2005-06]Status: DisposedITAT Delhi18 Sept 2020AY 2005-06

Bench: Shri R.K. Panda & Ms Suchitra Kambleassessment Year: 2005-06 Shree Balkishan Agarwal Glass Vs Dcit, Industries Ltd., Circle-8(1), C/O Sarvam & Associates, New Delhi. 403, Klj Tower North, B-5, Netaji Subhash Place, District Centre, Pitampura, Delhi. Pan: Aabcs2870C (Appellant) (Respondent) Assessee By : Shri Suresh Gupta, Ca Revenue By : Shri Saras Kumar, Sr. Dr Date Of Hearing : 26.08.2020 Date Of Pronouncement : 21.09.2020 Order Per R.K. Panda, Am:

For Appellant: Shri Suresh Gupta, CAFor Respondent: Shri Saras Kumar, Sr. DR

Section 139Section 142(1)Section 143(1)Section 147Section 148

approval in a mechanical manner under section 151 of the Act makes the reassessment proceedings invalid. Referring to various decisions he submitted that such mechanical approval given by the superior authority is not valid in law. 17. The ld. counsel for the assessee further submitted that the assessment order ... sanction granted by higher authority for issuing of reopening notice had to be on due application of mind and it could not be 25 mechanical approval without examining proposal sent by AO. The Hon’ble Delhi High Court in the case of Yum Restaurants Ltd. vs Dy. Director of Income

The Khushian Co-Op Group Housing Society Ltd., Panchkula vs. ITO, W-5, Panchkula

ITA 1149/CHANDI/2019[2010-11]Status: DisposedITAT Chandigarh07 Sept 2020AY 2010-11

For Appellant: Shri Tej Mohan Singh, AdvocateFor Respondent: Shri Daya Inder Singh Sidhu, Addl. CIT

Section 142(1)Section 144Section 147Section 148

unjustified. 4. That the Ld. Commissioner of Income Tax(Appeals) has erred in upholding of the assessment framed u/s 148 on the basis of mechanical approval given by the Pr.CIT, Panchkula which is not permissible and as such the order passed is illegal, arbitrary and unjustified. 5. Without prejudice

Kothakota Rama Rao, Rayagada vs. ACIT, Central Circle-1, Bhubaneswar

In the result, appeals of the assessee i

ITA 20/CTK/2019[2015-16]Status: DisposedITAT Cuttack28 Aug 2020AY 2015-16

Bench: Shri C.M. Garg, Jm & Shri L.P. Sahu, Am आयकर अऩीऱ (तऱाशियाां और अशिग्रहण)सं./Ita No.132/Ctk/2018 (नििाारण वषा / Assessment Year :2013-2014) Kothakota Rama Rao, Vs. Acit, Central Circle-1, Kothapeta, Rayagada, Bhubaneswar District-Rayagada Pan No. : Aeppk 1600 P & आयकर अऩीऱ सं./Ita Nos.19&20/Ctk/2019 & Ita No.386/Ctk/2018 (नििाारण वषा / Assessment Year :2014-15, 2015-16 & 2016-17) Kothakota Rama Rao, Vs. Acit, Central Circle-1, Kothapeta, Rayagada, Bhubaneswar District-Rayagada Pan No. : Aeppk 1600 P (अऩीऱाथी /Appellant) (प्रत्यथी / Respondent) .. ननधााररती की ओर से /Assessee By : Shri P.K.Mishra, Advocate राजस्व की ओर से /Revenue By : Shri M.K.Gautam, Citdr सुनवाई की तारीख / Date Of Hearing : 15/07/2020 घोषणा की तारीख/Date Of Pronouncement : 31/08/2020 आदेश / O R D E R Per L.P.Sahu, Am: These Are The Appeals Filed By The Assessee Against The Separate Orders Of Cit(A)-2, Bhubaneswar, Dated 11.09.2018 & 29.08.2018 For Assessment Years 2013-2014, 2014-2015, 2015-2016 & 2016-2017. 2. Since, Similar Issues Have Been Raised In All The Appeals, Therefore, For The Sake Of Convenience & Brevity, We Shall Decide The Appeal Of The Assessee For A.Y.2013-2014 In It(Ss)A No.132/Ctk/2018 After Taking Into Consideration The Grounds & Facts Mentioned

For Appellant: Shri P.K.Mishra, AdvocateFor Respondent: Shri M.K.Gautam, CITDR

Section 143(3)Section 153ASection 153DSection 234

Therefore in said context, it was held by the Hon'ble Cuttack ITAT that the Addl. CIT had not applied his mind while granting mechanical approval u/s. 153D (para-25 on page-24). However in the present case, no such comments have been mentioned by the Joint CIT, Central Range

Kothakota Rama Rao, Rayagada vs. ACIT, Central Circle-1, Bhubaneswar

In the result, appeals of the assessee i

ITA 19/CTK/2019[2014-15]Status: DisposedITAT Cuttack28 Aug 2020AY 2014-15

For Appellant: Shri P.K.Mishra, AdvocateFor Respondent: Shri M.K.Gautam, CITDR

Section 143(3)Section 153ASection 153DSection 234

Kothakota Rama Rao, Rayagada vs. ACIT, Central Circle-1, Bhubaneswar

In the result, appeals of the assessee i

ITA 386/CTK/2018[2016-17]Status: DisposedITAT Cuttack28 Aug 2020AY 2016-17

For Appellant: Shri P.K.Mishra, AdvocateFor Respondent: Shri M.K.Gautam, CITDR

Section 143(3)Section 153ASection 153DSection 234

Deputy Commissioner of Income Tax, Circle - Agartala, Agartala vs. Shri Subhajit Paul, Agartala

In the result, cross-objection nos

ITA 116/GTY/2018[2014-15]Status: DisposedITAT Guwahati31 Jul 2020AY 2014-15

Bench: Shri A. T. Varkey, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.116/Gau/2018 ("नधा"रणवष" / Assessment Year:2014-15)

For Appellant: Shri Rockein Saikia, JCIT, Sr. DRFor Respondent: Shri Sanjay Modi, FCA

Section 143(2)Section 143(3)Section 153D

light of earlier provision sec. 158BG vis-a-vis sec. 153D (supra) to conclude that the JCIT is not to accord a mere mechanical approval but he has to apply his mind in order to ensure that the assessing authority conducts appropriate enquiry and investigation. And also that there

Rmp Holding (P) Ltd., New Delhi vs. ITO, Ward- 20(3), New Delhi

In the result, the appeal filed by the assessee is allowed

ITA 7243/DEL/2019[2011-12]Status: DisposedITAT Delhi31 Jul 2020AY 2011-12

Bench: Shri R.K. Panda & Ms Suchitra Kambleassessment Year: 2011-12 Rmp Holding (P) Ltd., Vs Ito, Shop No.9, Plot No.51, Block-C, Ward-20(3), Mahendru Enclave, Near Hans Cinema, New Delhi. New Delhi. Pan: Aaacr5533N (Appellant) (Respondent) Assessee By : Shri Suresh Gupta, Ca Revenue By : Shri M. Barnwal, Sr. Dr Date Of Hearing : 16.07.2020 Date Of Pronouncement : 31.07.2020 Order Per R.K. Panda, Am: This Appeal Filed By The Assessee Is Directed Against The Order Dated 5Th August, 2019 Of The Cit(A)-7, New Delhi, Relating To Assessment Year 2011-12. 2. Facts Of The Case, In Brief, Are That The Assessee Is A Company & Filed Its Return Of Income On 17Th August, 2011, Declaring A Loss Of Rs.20,53,019/-. The Case Was Scrutinized U/S 143(3) On 10Th March, 2014, Determining The Income At Rs.20,06,714/-. Thereafter, On The Basis Of Information Received During The Course Of Search & Seizure Operation In The Case Of Entry Provider Shri Anand Kumar Jain & Shri Naresh Kumar Jain & Subsequent Investigation That The Assessee Is A Beneficiary Of Rs.39,00,055/-, The Case Of The Assessee Was Reopened By Recording Reasons U/S 147. Subsequently, Notice U/S 148 Was Issued On 26Th March, 2018 After Obtaining Prior Approval Of The Pcit-7, New Delhi. In Response To The Same, The Assessee Filed A Letter Stating That The Return Already Filed U/S 139 May Be Treated As The Return Filed In Response To The Notice U/S 148 Of The Act. However, Another Letter Dated 7Th August, 2018 Was Issued To The Assessee Requesting Him To File The Return In Response To Notice U/S 148 Of The Act. The Assessee Ultimately Filed Its Return On 13Th August, 2018 Declaring A Loss Of Rs.4,053/-. Subsequently, The Ao Issued Notice U/S 143(2) & 142(1) Of The It Act & Copies Of The Reasons Recorded Were Also Handed Over To The Assessee.

For Appellant: Shri Suresh Gupta, CAFor Respondent: Shri M. Barnwal, Sr. DR

Section 131Section 139Section 143(2)Section 143(3)Section 147Section 148Section 153CSection 68

rightly upheld the same. 28. So far as the argument of the ld. Counsel for the assesseee that there was mechanical approval given by the superior authorities are concerned, the ld. DR, referring to the decision of the Hon’ble Delhi High Court in the case of Sonia Gandhi ... view of the glaring incorrect facts recorded in the reasons. So far as the argument of the ld. DR that there is no mechanical approval u/s 151 and for which he relied on the decision of the Hon’ble Delhi High Court in the case of Sonia Gandhi (supra

Suresh Kumar Aggarwal, New Delhi vs. ACIT, Central Circle-25, New Delhi

In the result, appeal of the assessee is partly allowed

ITA 8703/DEL/2019[2011-12]Status: DisposedITAT Delhi29 Jun 2020AY 2011-12

Bench: Shri Sudhanshu Srivastava & Shri Prashant Maharishia Y 2011-12 Appellant Respondent Shri Suresh Kumar Agarwal The Assistant Commissioner Of 154, Deepali Enclave Vs. Income Tax Pitampura Central Circle -25 New Delhi New Delhi Pan :- Abvpk1318H ( Appellant ) ( Respondent ) Date Of Hearing 17-06-2020 Date Of Order 29.06.2020 Present For Assessee Shri Gautam Jain , Advocate Present For Income Tax Department :- Shri Saras Kumar Senior Departmental Representative O R D E R

Section 143Section 148Section 68

proceedings under section 147 of the income tax act. xiii. Approval obtained by the learned assessing officer from the higher authority is merely a mechanical approval. xiv. He dealt with several judicial precedents of various honourable High Court and the coordinate benches to support his case that reopening ... argument of the learned authorised representative it is submitted that in the instant case the approval obtained by the assessing officer is a mechanical approval and hence initiation of proceedings of the 6147 of the act on this ground itself is valid trust of he has also referred

M/S Om Kirti Construction Pvt. Ltd., Rajkot-Gujarat vs. The Assistant Commissioner of Income Tax, Cen. Circle-1, Rajkot-Gujarat

In the result the appeal of the assessee is partly allowed

ITA 96/RJT/2015[2011-12]Status: DisposedITAT Rajkot01 Jun 2020AY 2011-12

Bench: Shri Waseem Ahmed & Shri Madhumita Roy)

For Appellant: Shri P.C. Yadav, AdvocateFor Respondent: Shri M.N Maury, CIT/ D.R

Section 132Section 132ASection 143(3)Section 153Section 153ASection 153BSection 153D

passed by the AO on 04.03.2013, for the impugned year, is void ab initio as the approval granted u/s 153D of the Act is mechanical approval. b) On the facts and circumstances of the case the Assessment Order passed under section 153A/143 ... prior approval as the same has been received by the Jurisdictional AO after the passing of assessment order.2) the approval received is a mechanical approval. 3. Certain dates which goes to the root of the matter are as under- Date Event Reference 25.02.2011 Search taken place in Admitted fact mentioned

Quantum Hitech Merchandising P.Ltd, New Delhi vs. ITO, Ward-20(3), New Delhi

In the result, the Appeal filed by the Assessee stands partly allowed

ITA 7307/DEL/2018[2010-11]Status: DisposedITAT Delhi19 Mar 2020AY 2010-11

Bench: Shri H.S. Sidhuassessment Year : 2010-11

For Appellant: Sh. Nippun Mittal, CAFor Respondent: Sh. C.P. Singh, Sr. DR

Section 147Section 148Section 151

stated that the AO has erred in assumption of jurisdiction u/s. 147/148 of the Act on the basis of invalid and mechanical approval granted by the Ld. Pr. CIT-7, New Delhi wherein it was mentioned “Yes, I am satisfied”, which shows that Ld. Pr. CIT-7, New Delhi

Asit Kumar Patra, Serampur vs. I.T.O., Ward-23(3), Hooghly

In the result, the appeal of the assessee is allowed

ITA 2206/KOL/2019[2011-12]Status: DisposedITAT Kolkata21 Feb 2020AY 2011-12

Section 143(1)Section 143(3)Section 148Section 151

This takes me to a conclusion that the approval given in form for recording reasons in ITNS-10 at Column 14 was a mechanical approval. No proper satisfaction is recorded by the Pr. CIT-8, Kolkata. The Hon’ble Delhi High Court in the case of PCIT vs. N.C. Cables

Shri Brij Raj Yadav, Jaipur vs. ITO, Ward-6(1), Jaipur

In the result, the ground of appeal is allowed

ITA 1174/JPR/2019[2009-10]Status: DisposedITAT Jaipur14 Feb 2020AY 2009-10

For Appellant: Shafi Mohammad (Adv.)For Respondent: Miss Chanchal Meena (JCIT)

Section 144Section 147Section 148Section 68

well as by the Pr. CIT for issuance of notice U/s 148 is not proper and it is purely a mechanical approval which cannot be sustained in the eye of law as held in case of CIT, Jabalpur vs. S Goyanka Lime & Chemical Ltd. 64 Taxman.com 313 wherein

Satya Kumar Sakhuja, New Delhi vs. ITO Ward -45(3), New Delhi

In the result, the Appeal filed by the Assessee stands allowed

ITA 2188/DEL/2019[2008-09]Status: DisposedITAT Delhi13 Feb 2020AY 2008-09

Bench: Shri H.S. Sidhuassessment Year : 2008-09

For Appellant: Sh. Ved Jain, Advocate & Ms. SurbhiFor Respondent: Ms. Parul Singh, Sr. DR

Section 147Section 148Section 151

case for issue of notice u/s. 148 of the I. Tax Act, 1961”. However, as per settled law that this type of mechanical approval is not sustainable in the eyes of law and re-assessment on this account is liable to be quashed, hence, I quash the reassessment order

Asit Kumar Patra, Serampur vs. I.T.O., Ward-23(3), Hooghly

In the result, the appeal of the assessee is allowed

ITA 1053/KOL/2019[2010-11]Status: DisposedITAT Kolkata08 Jan 2020AY 2010-11

Bench: Shri J. Sudhakar Reddy]

Section 147Section 148Section 151Section 156(3)Section 250

This takes me to a conclusion that the approval given in form for recording reasons in ITNS- 10 at Column 14 was a mechanical approval. No proper satisfaction is recorded by the Pr. CIT-8, Kolkata. The Hon’ble Delhi High Court in the case of PCIT vs. N.C. Cables

Jai Pal, Panipat vs. ITO Ward 2, Panipat

In the result, the Appeal filed by the Assessee stands partly allowed

ITA 2750/DEL/2019[2010-11]Status: DisposedITAT Delhi06 Jan 2020AY 2010-11

Bench: Shri H.S. Sidhuassessment Year : 2010-11

For Appellant: Ms. Rano Jain, Adv. & Ms. Mansi Jain, CAFor Respondent: Sh. Pradeep Singh Gautam, Sr. DR

Section 143(3)Section 147Section 148Section 151

stated that that the AO has erred in assumption of jurisdiction u/s. 147/148 of the Act on the basis of invalid and mechanical approval granted u/s. 151 of the Act by the Pr. Commissioner of Income Tax, Karnal wherein it was mentioned “Yes, it is a fit case for issue

Apc Air Systems P.Ltd, New Delhi vs. ITO, Ward-3(1), New Delhi

In the result, the Appeal filed by the Assessee stands partly allowed

ITA 4715/DEL/2018[2008-09]Status: DisposedITAT Delhi01 Jan 2020AY 2008-09

Bench: Shri H.S. Sidhuassessment Year : 2008-09

For Appellant: Mrs. Sonia Rani, CAFor Respondent: Sh. Pradeep Singh Gautam, Sr. DR

Section 144Section 147Section 148Section 151

stated that the AO has erred in assumption of jurisdiction u/s. 147/148 of the Act on the basis of invalid and mechanical approval granted by the Addl. CIT, Range-3, New Delhi wherein it was mentioned “Yes, I am satisfied on the reasons recorded by the AO that

ACIT, Circle - 25, Kolkata vs. M/S. Mala Roy & Others, Kolkata

In the result, this appeal of the In the result, this appeal of the revenue is dismissed

ITA 407/KOL/2018[2012-13]Status: DisposedITAT Kolkata31 Dec 2019AY 2012-13

Bench: Sri J. Sudhakar Reddy & Sri Aby T. Varkey) Assessment Year: 2008-09 & Assessment Year: 2012-13

Section 139(1)Section 143(3)Section 148

approval under section 151 is to be made after application of e after application of mind. It is not so in this case as mechanical approval is given by an officer who is not mind. It is not so in this case as mechanical approval is given by an officer ... mind. It is not so in this case as mechanical approval is given by an officer who is not authorised to do so in law. authorised to do so in law. 6.2. Thus on this count also we hold that the reopening is bad in law. 6.2. Thus on this