Reassessment quashed invalid approval section 151 cases establish that sanction is not an empty formality and mechanical approval vitiates jurisdiction. Reassessment quashed for invalid approval under section 151 is a settled legal position where sanction is granted mechanically without independent application of mind by the approving authority.
Approval under section 151 is not a mere formality. Courts have consistently held that mechanical or rubber-stamp sanction vitiates the entire reassessment.
If sanction fails, jurisdiction fails.
Legal issue involved
Whether reassessment proceedings are valid when:
- Approval under section 151 is granted mechanically
- The sanctioning authority does not apply independent mind
- The approval merely states “Yes, approved” or similar language
The settled position is that valid sanction is a condition precedent.
Judicial Precedent
United Electrical Co. (P) Ltd. vs. CIT | Delhi High Court | 2002
Facts:
Reassessment was initiated after approval under section 151, which merely recorded a cryptic “Yes, I am satisfied”.
Held:
The Delhi High Court quashed the reassessment, holding that mere rubber-stamp approval does not meet the requirement of law.
Why it matters:
Approval must show application of mind, not mechanical assent.
German Remedies Ltd. vs. DCIT | Bombay High Court | 2006
Facts:
The sanctioning authority granted approval without recording reasons or examining material.
Held:
The Court held that sanction must be meaningful and reasoned, and mechanical approval renders reassessment invalid.
Why it matters:
Approval is not an empty ritual; it is a jurisdictional safeguard.
Pr. CIT vs. N.C. Cables Ltd. | Delhi High Court | 2017
Facts:
The sanctioning authority merely wrote “approved” without recording satisfaction.
Held:
The Court held that such approval is invalid, and reassessment proceedings were quashed.
Why it matters:
This is one of the most cited judgments on invalid sanction.
S. Goyanka Lime & Chemical Ltd. vs. CIT | Supreme Court | 2015
Facts:
Approval under section 151 was granted mechanically without independent examination.
Held:
The Supreme Court affirmed that mechanical approval defeats the purpose of section 151 and renders reassessment invalid.
Why it matters:
This gives Supreme Court backing to the principle that sanction must be real, not illusory.
Anil Kumar Nehru vs. ACIT | Delhi High Court | 2023
Facts:
The approval under section 151 did not reflect consideration of assessee’s reply or material.
Held:
The Court quashed the reassessment, holding that approval must demonstrate conscious application of mind.
Why it matters:
Post-148A regime still requires valid sanction, not mechanical approval.
Common principles emerging
From the above judgments:
- Section 151 sanction is mandatory
- Mechanical or cryptic approval is invalid
- Application of mind must be evident
- Burden lies on the department
- Jurisdiction fails if sanction is defective
How These Judgments Help in Challenging Reassessment Proceedings
These judgments are particularly useful while challenging reassessment notices and orders where approval under section 151 is granted in a routine or mechanical manner. Courts have repeatedly held that sanction is not an empty formality and must reflect due application of mind.
While contesting reassessment, assessees should demand the approval records and examine whether the sanctioning authority independently applied its mind to the reasons recorded. If approval merely records “Yes, approved” or similar expressions, the entire reassessment proceedings are liable to be quashed for lack of jurisdiction.
How to use these judgments
These cases are decisive:
- While replying to 148A(b) notices
- When reasons mention “approval obtained”
- In writ petitions before High Courts
- To challenge reassessment at the jurisdiction stage
If approval is mechanical, no further enquiry is required.
Courts have also emphasised that approval under section 151 must be granted prior to issuance of notice and not as a post-facto exercise. Any defect in sanction goes to the root of jurisdiction and renders the reassessment void ab initio.
Related reading
- Difference Between Section 148, 148A and 151 – Explained Simply
- Reassessment After 3 Years – When Is It Allowed?
- Key Case Laws Where Reassessment Was Quashed as Time-Barred
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