TMI Blog2024 (3) TMI 828X X X X Extracts X X X X X X X X Extracts X X X X ..... a valid approval. In fact, the approval in the instant case is apparently akin to the rubber stamping of Yes in the case of Central India Electric Supply. ITAT correctly held that the prescribed authority has granted approval under Section 151 in a mechanical manner. Decided against revenue. - HON'BLE MR. JUSTICE YASHWANT VARMA AND HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV For the Appellant Through: Mr. Sanjay Kumar, Sr. SC. For the Respondent Through: Mr. Sumit Lalchandani and Mr. Salil Kapoor, Advs. ORDER PER: PURUSHAINDRA KUMAR KAURAV J. 1. The instant appeal at the instance of the Revenue impugns the order dated 06.08.2018 passed by the Income Tax Appellate Tribunal [ ITAT ] for Assessment Year [ AY ] 2009-10, whereby, the ITAT, while ruling in favour of the respondent-assessee, has held that the prescribed authority has granted approval under Section 151 of the Income Tax Act, 1961 [ Act ] in a mechanical manner. 2. The facts of the present case manifest that on 30.09.2010, the respondent-assessee filed its income tax return [ ITR ] which was processed in accordance with Section 143(1) of the Act. Subsequently, a search operation was carried out in the premises o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is only in case where the prescribed authority differs with the reasoning assigned by the AO, is it required to record its reasons for disagreement. 7. Learned counsel additionally submits that the ITAT has erroneously taken the view that the AO had acted upon borrowed satisfaction from the Investigation Wing, without any independent application of mind. He contends that the tangible information for the purpose of reassessment contemplated under Section 147 of the Act would include borrowed information and the same ought not to be mistaken with borrowed satisfaction as there exists a striking distinction between the two concepts. He further submits that the conclusion arrived at by the AO is based upon its own satisfaction drawn from the information received from the Investigation Wing and the same cannot be said to be borrowed satisfaction. 8. He has placed reliance on the decisions of this Court in the case of Experion Developers (P.) Ltd. v. ACIT [2020 SCC OnLine Del 2588] and PCIT v. Meenakshi Overseas Pvt. Ltd. [ITA 651/2015] to substantiate his arguments. 9. Per contra, learned counsel appearing on behalf of the assessee vehemently opposed the submissions advanced by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice. (2) In a case other than a case falling under sub-section (1), no notice shall be issued under Section 148 by an Assessing Officer, who is below the rank of Joint Commissioner, unless the Joint Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice. (3) For the purposes of sub-section (1) and sub-section (2), the Principal Chief Commissioner or the Chief Commissioner or the Principal Commissioner or the Commissioner or the Joint Commissioner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice under Section 148, need not issue such notice himself. 15. A plain reading of the aforesaid provision would indicate that Section 151 of the Act stipulates that the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner must be satisfied , on the reasons recorded by the AO, that it is a fit case for the issuance of such notice. Thus, the satisfaction of the prescribed au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were, in fact, given. However, in the instant case, the manner in which the proforma was stamped amounting to approval by the Board leaves much to be desired. It is a case where literally a mere stamp is affixed. It is signed by an Under Secretary underneath a stamped Yes against the column which queried as to whether the approval of the Board had been taken. Rubber stamping of underlying material is hardly a process which can get the imprimatur of this court as it suggests that the decision has been taken in a mechanical manner. Even if the reasoning set out by the Income-tax Officer was to be agreed upon, the least which is expected is that an appropriate endorsement is made in this behalf setting out brief reasons . Reasons are the link between the material placed on record and the conclusion reached by an authority in respect of an issue, since they help in discerning the manner in which conclusion is reached by the concerned authority. Our opinion is fortified by the decision of the apex court in Union of India v. M. L. Capoor, AIR 1974 SC 87, 97 wherein it was observed as under: 27.. .. We find considerable force in the submission made on behalf of the respondents that the &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue of notice under section 148 of the Income- tax Act, 1961. Approved , had held that the said approval would only amount to endorsement of language used in Section 151 of the Act and would not reflect any independent application of mind. Thus, the same was considered to be flawed in law. 21. The salient aspect which emerges out of the foregoing discussion is that the satisfaction arrived at by the prescribed authority under Section 151 of the Act must be clearly discernible from the expression used at the time of affixing its signature while according approval for reassessment under Section 148 of the Act. The said approval cannot be granted in a mechanical manner as it acts as a linkage between the facts considered and conclusion reached. In the instant case, merely appending the phrase Yes does not appropriately align with the mandate of Section 151 of the Act as it fails to set out any degree of satisfaction, much less an unassailable satisfaction, for the said purpose. 22. So far as the decision relied upon the Revenue in the case of Meenakshi Overseas Pvt. Ltd. is concerned, the same was a case where the satisfaction was specifically appended in the proforma in terms of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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