Mechanical Approval by the Sanctioning Authority under Section 151

ISSUE FOR CONSIDERATION

The Assessing Officer is permitted to issue a notice under Section 148 only after obtaining an approval of the higher authorities in accordance with the provisions of Section 151. In a recent decision in the case of Union of India vs. Rajeev Bansal [2024] 167 taxmann.com 70, the Supreme Court in dealing with the new scheme of reassessment, held that Section 151 imposes a check upon the power of the Revenue authorities to reopen assessments. The provision imposes a responsibility on the authorities to ensure that it obtains the sanction of the specified authority before issuing a notice under Section 148. The purpose behind this safeguard is to save the assessees from harassment resulting from the mechanical reopening of assessments and to provide for the dual check by the higher authority.

Even the higher authority, entrusted with the duty to check whether the reasons of the AO are tenable in law, itself is found lacking in discharge of its statutory obligation by routinely sanctioning the reopening by the AO. Time and again the Courts have held that, while granting the approval under Section 151, the sanctioning authority should have applied his mind and have verified as to whether the concerned case is a fit case for issuing notice under Section 148 and that it satisfies all other applicable conditions. The notices issue