INCOME TAX ACT, 1961

Section 147 Section 151

Reassessment - Validity - Mechanical approval granted by Pr. CIT under section 151 -

AO initiated proceedings under section 147 by issuing notice under section 148 and thus made addition. Assessee's case was that action for initaition of reassessment proceeding was unreasonable since approval granted by Pr.CIT was a mechanical approval.Held: According sanction is not a supervisory role, rather it is a quasi-judicial function to be performed by Pr. CIT/CIT, as the case may be, as required under section 151. In the instant case, apparently, from the approval recorded under section 151 and words used that 'Yes, I am satisfied.', it was proved on record that sanction was accorded in mechanical manner and Pr.CIT had not applied independent mind while according sanction as there was not an iota of material on record as to what documents he had perused and what were the reasons for his being satisfied to accord the sanction to initiate reopening of assessment under sections 147/148. Accordingly, consequent reassessment was quashed as invalid.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2010-11

INCOME TAX ACT, 1961

Section 254(1)

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