Kippy Engineering Pvt. Ltd. Vs ACIT (ITAT Kolkata)
Reopening Quashed – Mechanical Approval u/s 151 Invalid – “Yes, I am Satisfied” Not Proper Sanction – ITAT Kolkata
ITAT Kolkata admitted additional legal ground and quashed reassessment holding that approval granted by PCIT u/s 151 was mechanical and without independent application of mind. Tribunal noted that sanction merely recorded “Yes, I am satisfied, may be reopened” (visible in approval sheet extracted ), which failed to demonstrate objective satisfaction as required under law. Relying on Lakhmani Mewal Das (SC), Jet Airways (Bom HC), Meenakshi Overseas (Del HC) and S. Goyanka Lime (SC), ITAT held that sanction is a jurisdictional safeguard and rubber-stamp approval vitiates reopening. Since approval itself was invalid, notice u/s 148 and reassessment framed u/s 143(3) r.w.s.147 were quashed without examining merits of Sec 68 addition. Appeal allowed in favour of assessee.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 27.08.2025 for the AY 2012-13.
2. At the time of hearing, the assessee raised additional ground which is extracted below:
“(a) That the impugned reassessment order dated 17.12.2019 passed u/s. 143(3) read with section 147 of the act that in the case of the assessee for the reassessment year 2012-13 is without jurisdiction, illegal, invalid and bad in law. The reassessment proceedings were wrongly initiated vide notice dated 14.03.2019 u/s. 148 and that the mandatory approval of the sanctioning authority i.e. the principal commissioner of income tax as required to be obtained u/s. 151 of the act is invalid.
(b) That the sanctioning authority i.e. the principal commissioner of income tax has not applied his mind while granting an approval and therefore the approval accorded by the sanctioning authority is invalid and so the proceedings-initiated u/s. 148 of the act has no legs to stand.”
2.1. After hearing the rival contentions and perusing the material on record, we find that the assessee has raised the above additional ground of appeal challenging the validity of reopening of assessment u/s 147 read with section 148 of the Act without any application of mind and without there being a proper approval of the competent authority. In our opinion the issue raised in the additional ground is a purely a legal issue qua which all the facts are available in the appeal folder and no further verification of facts is required from any quarter whatsoever. In our considered view the assessee is at liberty to raise any legal issue before any appellate authority for the first time even when the same has not been raised before the lower authorities. The case of the assessee is squarely covered by the decisions of the Apex court in the case of i) Jute Corporation of India Ltd. Vs CIT in 187 ITR 688 , ii) National Thermal Power Co. Ltd v. CIT [1998] 229 ITR 383 and also by the decision of Hon’ble Calcutta High Court in PCIT vs. Britannia Industries Ltd. [2017] 396 ITR 677 (Cal). Therefore, we are inclined to admit the same for adjudication.
