2023 (3) TMI 364 - AT - Income Tax

Reopening of assessment u/s 147 - approval order u/s. 151 - HELD THAT:- Requirement of approval u/s. 151 of the Act is not a formal ritual but it is mandatory legislative requirement which has to be done after due application of mind to the material gathered by the AO and reasons recorded by him. The approving authority has to consider entire material before granting approval for initiation reassessment proceedings u/s. 147 and issuance of notice u/s. 148 of the Act.

We unable to agree with the contention of the learned Senior DR that the putting seal as statement of approval is sufficient as the any exercise in the part of the Ld. PCIT for application of mind towards the said material which was gathered by the AO and the reasons recorded by him for the purpose of initiation of reassessment proceedings and issuance of notice u/s. 148 of the Act.

Merely putting a seal as approving statement is not sufficient and make it clear that the approving authority has granted approval in a mechanical manner without application of mind to the relevant material and reasons recorded by the AO. Therefore the initiation of reassessment proceedings also fails on this count. Therefore additional grounds of assessee are allowed and initiation of reassessment proceedings, issuance of notice u/s. 148 of the Act and all consequent proceedings and orders are hereby quashed. Decided in favour of assessee.