Dual Section 151 Approval Invalidates Reassessment Proceedings: ITAT Delhi

Dil Raj Kaur Vs ITO (ITAT Delhi)

Approval by Both JCIT and PCIT Invalidates Reassessment: Delhi ITAT Quashes Notice for Defective Section 151 Sanction

Sanction for reopening must follow the authority and procedure prescribed by Section 151. In Dil Raj Kaur v. ITO, ITA No. 7712/Del/2026, the Delhi ITAT held that the reassessment could not stand where the approval form recorded independent satisfaction by both the Joint Commissioner and the Principal Commissioner. Following earlier Tribunal decisions, it quashed the proceedings for invalid assumption of jurisdiction.

The order was pronounced on 29 September 2026 for AY 2012–13. Although the assessee had raised other objections to the reassessment, the Tribunal decided the appeal on Ground No. 12, concerning sanction under Section 151. It left the remaining legal and factual grounds open.

What the Approval Form Showed

The Tribunal examined the proforma used by the Assessing Officer to seek approval for reopening. It found that the JCIT, Range 34, New Delhi, had stated that he was satisfied it was a fit case for reopening. According to the ITAT, this was an expression of the JCIT’s own satisfaction. It was not worded as a mere forwarding of papers to the PCIT.

The PCIT, Delhi 12, then recorded his own approval. The order states that both approvals appeared on the proforma with the date 26 March 2019. The question before the Tribunal was whether obtaining these two approvals, each expressing independent satisfaction, complied with Section 151. The source records the Tribunal’s finding that both authorities independently approved the reopening.

The Tribunal answered that question against the Revenue. It treated the prescribed sanction as a jurisdictional requirement that had to be fulfilled in the statutory manner. Obtaining approval at two levels did not, in its view, cure the defect.

Earlier Decision Followed

The ITAT principally followed the Agra Bench’s decision in Savita Gupta v. ITO, ITA No. 327/Agra/2024, dated 24 March 2026. That decision had considered a similar approval proforma bearing the satisfaction of both the JCIT and PCIT, and had quashed the reassessment.

In Savita Gupta, the Agra Bench relied on the Mumbai Tribunal’s decision in ACIT v. Bharti Axa Life Insurance Co. Ltd. The reasoning reproduced in the present order was that the statutory circumstances requiring approval from a particular authority cannot be made immaterial by seeking approval from both authorities. Reopening confers jurisdiction to reassess; the conditions attached to that power therefore require compliance.

The order also reproduces discussion of Ghanshyam K. Khabrani and Aquatic Remedies (P.) Ltd. of the Bombay High Court, as well as the Delhi High Court’s decision in CIT v. SPL’s Siddhartha Ltd. Those authorities emphasise that where a statute requires the satisfaction of a specified officer, the satisfaction of another officer cannot substitute for it.

There is a distinction worth keeping in view. In some of the High Court decisions discussed in the order, the problem was that the officer designated by the statute had not granted final sanction, while a superior officer did. In Dil Raj Kaur, the Tribunal found that both officers had expressed independent satisfaction. The Delhi Bench reached its conclusion by following the Tribunal decisions that applied the statutory manner principle to dual approvals.

Reassessment Quashed; Merits Left Open

Applying Savita Gupta, the Delhi ITAT allowed the assessee’s sanction ground and quashed the reassessment proceedings. Once it reached that conclusion, it considered examination of the other objections unnecessary. Those issues, including the factual merits of the additions, were not adjudicated. The operative portion expressly records that Ground No. 12 was allowed, the reassessment was quashed for invalid approval under Section 151, and the other factual and legal grounds were left open.

The operative result is therefore clear: the reassessment failed because of the Tribunal’s finding on Section 151 approval, without a ruling on whether income had in fact escaped assessment.

Author’s Comment

This decision underlines the value of obtaining and examining the actual sanction proforma, rather than relying only on a statement in the reassessment order that approval was obtained. The identity of the officer who recorded satisfaction, the words used, and whether a superior officer merely received a forwarded proposal or also gave an independent approval can determine a jurisdictional objection.

At the same time, the proposition should be applied with attention to the version of Section 151 governing the relevant notice and the precise approval record. The ruling follows a particular line of Tribunal decisions on dual sanction. The High Court authorities reproduced in the order establish the importance of sanction by the designated authority, but their facts are not identical to every case in which two officers have signed a proposal.

A date discrepancy in the order also calls for verification before citing it in another proceeding: its opening paragraph describes the assessment order as dated 6 December 2016, while its discussion of the sanction states that both approvals were given on 26 March 2019. The reported dates do not sit together chronologically for the same reopening. That discrepancy does not change what the ITAT directed, but the underlying notice, approval and assessment records should be checked when relying on the case. The two dates appear in the source itself.

Cases Discussed

• Savita Gupta Vs. ITO, ITA No. 327/AGR/2024, order dated 24.03.2026 (ITAT Agra) — Directly followed by the Delhi Bench; the decision treated approval independently recorded by both the JCIT and PCIT as fatal to the reassessment proceedings.
• ACIT vs Bharti Axa Life Insurance Company Ltd., 128 taxmann.com 23 (ITAT Mumbai), order dated 31.03.2021 — Relied upon in Savita Gupta for holding that where the prescribed circumstances required sanction from a particular authority, obtaining satisfaction from an additional authority could not render the statutory demarcation otiose.
• Ghanshyam K. Khabrani v. ACIT, 346 ITR 443 (Bombay High Court) — Held that when the statute mandates satisfaction of a particular functionary, that satisfaction must be of the authority designated by the statute; sanction by another authority cannot substitute it.
• CIT v. Aquatic Remedies (P.) Ltd. (Bombay High Court) — Discussed for the requirement that sanction under Section 151 be granted in the manner prescribed by statute; the order notes that the Revenue’s SLP against the judgment was dismissed.
• CIT v. SPL’s Siddhartha Ltd., 345 ITR 223 (Delhi High Court) — Applied for the principle that powers conferred on a particular authority must be exercised by that authority and statutory satisfaction cannot be substituted by another officer.

FULL TEXT OF THE ORDER OF ITAT DELHI

1. The appeal in ITA No.7712/Del/2026 for AY 2012-13, arises out of the order of the ld National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] dated 26.05.2026 against the order of assessment passed u/s 147 r.w.s. 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 06.12.2016 by the Assessing Officer, ITO, Ward-34(1), Delhi (hereinafter referred to as ‘ld. AO’).

2. The Ground No. 12 raised by the assessee is challenging the validity of assumption of jurisdiction u/s 147 of the Act on account of mechanical approval granted u/s 151 of the Act.

3. I have heard the rival submissions and perused the material available on record. In the instant case, I find from the proforma seeking approval u/s 151 of the Act by the ld AO, both the ld Joint Commissioner of Income Tax (hereinafter referred as ‘JCIT’ in short), Range- 34, New Delhi as well as the ld Pr. Commissioner of Income Tax, Delhi-12, New Delhi had accorded approval u/s 151 of the Act. The language of the ld JCIT is very clear that he had expressed his opinion by stating that he is satisfied that this is a fit case for reopening. The language does not mention that he is merely forwarding the papers to the ld PCIT and instead he has forwarded the letter after recording his approval by way of satisfaction for reopening the assessment. This tantamount to his independent approval. Thereafter, the ld PCIT has also accorded his independent approval. Both the approvals were granted on 26.03.2019 which is clear from the proforma seeking approval. Whether approval granted by both ld JCIT and the ld PCIT would become fatal to the reassessment proceedings is the issue to be decided. This issue has been subject matter of adjudication by the coordinate bench decision of Agra Tribunal in the case of Savita Gupta Vs. ITO in ITA No. 327/AGR/2024 dated 24-03-2026. For the sake of convenience, the said order is reproduced below:-

“3. We have heard the rival submissions and perused the materials available on record. The return of income for the Assessment Year 2013-14 was originally filed by the assessee on 21-12-2013 declaring total income of Rs. 2.15,000/-. The assessment was completed u/s 143(3) of the Act on 14-12-2015 determining total income of the assessee at Rs. 2,74,470/-, The learned AO observed that during the year under consideration, the assessee has sold an immovable property for 75 lakhs, the circle value of the property stood at Rs. 80 lakhs. On perusal of the record, it was found that assessee had made bogus claims towards cost of construction amounting to Rs. 13,42,340/-. During the assessment proceedings, the assessee had provided original copy of agreement dated 15-08-2004 with Shri Raju, contractor. This agreement was made on 15-08-2004 for construction of residential house at Hata Bhannamal, Gandhi Market, Etah, whereas the sold property exists at Vijaynagar colony (Thandi Sarak, Etah). Also the sold property was acquired in March 2005, whereas the agreement for construction of house was made in August 2004. Accordingly, the learned AO concluded that this agreement dated 15-08-2004 was of no relevance. Moreover, the assessee had purchased a house at Hindu Nagar, Etah and had claimed deduction under Section 54 of the Income Tax Act of Rs 58,41,680/-. For this, the assessee had purchased a residential house at Hindu Nagar, Etah on 6-11-2012 for Rs. 40 lakhs and shown rest of the amount of Rs. 18,41,680/-towards construction. For this, the learned AO observed that assessee submitted an agreement dated 10-5-2013 for construction of residential property at Hata Bhannamal, Gandhi Market, Etah. The learned AO noted that since the new property was acquired at Hindu Nagar, Etah and this contract for construction was made at different location and also the property sold at Vijayanagar, Etah is a commercial property, therefore assessee is not entitled for deduction under section 54 of the Act. Thus he observed that that assessee has claimed excess deduction of Rs. 13,42,340/-and Rs. 58,41.680/- against Long Term Capital Gains resulting into escapement of income of Rs. 71,84,020/-

4. Accordingly, notice under Section 148 of the Act was issued to the Assessee on 29-03-2019 after obtaining approval from the Learned Principal Commissioner of Income Tax. Aligarh. The said notice was duly served upon the Assessee. The Learned AR before us placed on record the proforma seeking approval under Section 151 of the Act, which is reproduced hereunder:-

“Form for the recording the reasons for initiating proceedings u/s 147 and for obtaining approval of the Principal Commissioner of Income Tax

From the above proforma, it could be seen that approval under Section 151 of the Act has been given both by the Learned Joint Commissioner of Income Tax, Range, Etah and also by the Learned Principal Commissioner of Income Tax, Aligarh. The Learned JCIT has accorded the approval on 19-032019 and the Learned PCIT has accorded the approval on 20-03-2019. Now, the short question that arises for our consideration is as to whether when approval has been obtained from both Learned JCIT as well as Learned PCIT in a superfluous manner, whether the same would become fatal to the entire reassessment proceedings. This issue is no longer res integra in view of the coordinate bench decision of Mumbai Tribunal in the case of ACIT vs Bharti Axa Life Insurance Company Ltd reported in 128 taxmann.com 23 (Mumbai Trib) dated 31-3-2021 wherein it was held that where reopening of assessment had been done beyond 4 years from end of relevant assessment year, approval and sanction under section 151 to issue notice for reopening assessment ought to have been granted only by Commissioner alone, hence, where satisfaction of Additional Commissioner was also obtained in addition to approval of Commissioner, said approval became invalid in terms of section 151 of the Act. The relevant operative portion of the said order is reproduced below:-

“4.9.2. We further find that the sanction obtained in terms of section 151 of the Act was not provided to the assessee along with the reasons recorded despite assessee asking for the same in writing before the ld AO. This, in our considered opinion, is against the settled principles of natural justice as reopening of an assessment is an extraordinary power available to the ld AO and it should not be done in a cavalier manner. That is why the legislature in its wisdom had put lot of restrictions by imposing conditions for seeking approval and sanction from a superior officer in terms of section 151 of the Act. Hence the said approval obtained from competent authority ought to have been furnished by the ld AO along with the reasons recorded for reopening the assessment to the assessee. Moreover, in the instant case, the approval of both Additional CIT as well as Id PCIT had been obtained by the ld AO in terms of section 151 of the Act as is evident in the statutory proforma enclosed by the ld DR before us. Since the reopening in the instant case had been done beyond 4 years from the end of the relevant assessment year, approval and sanction ought to have been granted only by ld PCIT alone. Hence this is a case where satisfaction of ld Additional CIT is also obtained in addition to the approval of ld PCIT, the said approval becomes invalid in terms of section 151 of the Act. It is trite law that if the law requires an act to be done in a particular manner, more particularly acts conferring jurisdiction like the present one, then, such act has to be done in that manner alone and the same cannot be compromised in any manner whatsoever. On perusal of the standard proforma for seeking approval in terms of section 151 of the Act, the legislature in its wisdom had prescribed such proforma, clearly demarcating and defining the circumstances under which the approval had to be granted by ld Additional CIT and circumstances under which the approval had to be granted by the ld PCIT. The said defined circumstances cannot be rendered otiose by obtaining approval from both Additional CIT as well as ld PCIT by the ld AO, as was done in the present case before us.

4.9.2.1Reliance in this regard was rightly placed by the ld AR on the decision of Hon’ble Jurisdictional High Court in the case of Ghanshyam K Khabrani reported in 346ITR 443 (Bom) wherein it was held that:—

6. The second ground upon which the reopening is sought to be challenged is that the mandatory requirement of election 151(2) has not been fulfilled. Section 151 requires a sanction to be taken for the issuance of a notice under section 148 in certain cases. In the present case, an assessment had not been made under section 143(3) or section 147for A.Y. 2004-05. Hence, under sub-section 2 of section 151, no notice can be issued under section 148 by an Assessing officer who is below the rank of Joint Commissioner after the expiry of 4 years from the end of the relevant Assessment Year 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. The expression “Joint Commissioner” is defined in Section 2(28C) to mean a person appointed to be a Joint Commissioner of Income-tax or an Additional Commissioner of Income-tax under section 117(1). In the present case, the record before the Court indicate that the Assessing Officer submitted a proposal on 28 March 2011 to the CIT(1) Thane through the Additional Commissioner of Income- Tax Range (1) Thane. On 28 March 2011, the Additional CIT forwarded the proposal to the CIT and after recording a gist of the communication of the Assessing Officer stated that:

“As requested by the A.O. Necessary approval for issue of notice u/s. 148 may kindly be granted in case, if approved.”

On this a communication was issued on 29 March 2011 from the office of the CIT(1) conveying approval to the proposal submitted by the Assessing officer. There is merit in the contention raised on behalf of the Assessee that the requirement of Section 151(2) could have only been fulfilled by the satisfaction of the Joint Commissioner that this is a fit case for the issuance of a notice under section 148. Section 151(2) mandates that the satisfaction has to be of the Joint Commissioner. That expression has a distinct meaning by virtue of the definition infection 2(28C). The Commissioner-of Income-tax is not a Joint Commissioner within the meaning of Section 2(28C). In the present case, the Additional Commissioner of Income-tax forwarded the proposal submitted by the Assessing Officer to the Commissioner of Income-tax approval which has been granted is not by the Additional Commissioner of Income-tax but by the Commissioner of Income Tax. ‘There is no statutory provision hereunder which a power to be exercised by an officer can be exercised by a superior officer. When the statute mandates the satisfaction of a particular functionary for the exercise of a power, the satisfaction must be of that authority. Where a statute requires something to be done in a particular manner, it has to be done in that manner. In a similar situation the Delhi High Court in CIT v. SPL’SSiddharthaLtd. [2012] 204 Taxman 115/17 taxmann.com 138 (Delhi) held that powers which are conferred upon a particular authority have to be exercised by that authority and the satisfaction which the statute mandates of a distinct authority cannot be substituted by the satisfaction of another. We are in respectful agreement with the judgment of the Delhi High Court.

7. In view of the findings which we have recorded on submissions (i), (ii) and (iv), it is not necessary for the Court to consider submission (iii) which has been urged on behalf of the Assessee. Once the Court has come to the conclusion that there was no compliance of the mandatory requirements of Section 147 and 151(2), the notice reopening the assessment cannot be sustained in law.

4.9.2.2 Reliance in this regard was rightly placed by the ld AR on the decision of Hon’ble Jurisdictional High Court in the case of Aquatic Remedies (P.) Ltd. (supra) wherein it was held that:—

6. Before considering the rival submissions, it is necessary to reproduce the relevant extracts from ‘FORM FOR RECORDING REASONS FOR INITIATING PROCEEDINGS U/S. 148 OF THE ACT, AND FOR OBTAINING APPROVAL OF THE COMMISSIONER OF INCOME TAX, CENTRAL-V, MUMBAI’ tendered across the Bar. The Form itself indicates that the Assessing Office had submitted the proposal to obtain approval of the Commissioner of Income-tax before issuing the notice dated 25th March, 2011. The remark by Additional Commissioner of Income-tax on the form, is as under:—

“12. Remark of the Addl. CIT: Yes. I am satisfied. It is a fit case to re-open the case u/s. 147 of the Act. The notice u/s. 148 may be issued subject to CIT approval.

Sd/-
(VIRENDRA OJHA)
Addl. Commissioner of Income Tax,
Central Range 10, Mumbai.”

It, thereafter, was examined by the Commissioner of Income-tax who expressed his approval in the following form:

“13. Remark of the CIT

Yes, I am satisfied that in view offacts, … as indicated in the Annexure, it is a fit case for issue of notice u/s. 148 of the I.T. Act.

Sd/-
(H.C. JAIN)
Commissioner of Income Tax,
CentralIV, Mumbai.”

7. Further, the learned Counselfor the parties also produce before us a letter dated 24th March, 2011 addressed by the Additional Commissioner of Income-tax to the Commissioner of Income-tax and letter dated 25th March, 2011 from the office of the Commissioner of Income-tax to the Additional Commissioner of Income Tax. The letter dated 24th March, 2011 records the view of Additional Commissioner of Income-tax that he agrees with the reasons given by the Assessing Officer to issue the re-opening notice and seeks permission of the Commissioner of Income-tax to enable the Assessing Officer to issue the reopening notice for Assessment Year 2004-05. While, letter dated 25th March, 2011 from the office of the Commissioner of Income Tax, addressed to the Additional Commissioner of Income-tax states that he has granted approval to the Assessing Officer to issue a notice under section 148 of the Act. All the three communications, referred to herein above in paragraphs 6 and in this paragraph, are taken on record and marked A, B & C for identification.

8. Mr. Tejveer Singh, learned Counsel appearing for the Revenue submits that the Additional Commissioner of Income-tax is the jurisdictional Officer to grant sanction under section 151 (2) of the Act. This, Officer he, submits has recorded his satisfaction with the reasons recorded by the Assessing Officer to issue the re-opening notice. Thus, the requirement of Section 151 (2) of the Act is satisfied inasmuch as the Additional Commissioner of Income-tax has found it to be a fit case for issuing of notice. It is further submitted that even though, the approval was obtained from the Commissioner of Income-tax for issuance of the notice, it does not take away the fact that the Additional Commissioner of Income-tax was satisfied with reasons recorded by the Assessing Officer. Therefore, it is submitted that the notice dated 25th March, 2011, cannot be said to be without jurisdiction.

9. It is undisputed position before us that in terms of section 151(2) of the Act, the sanctioning/permission to issue notice under section 148 of the Act has to be issued by the Additional Commissioner of Income Tax. We find that the Assessing Officer had not sought the approval of the Designated Officer but of the Commissioner of Income Tax. This is clear from the Form used to obtain the sanction. In any case, the approval/satisfaction recorded in the form submitted for sanction of the Commissioner of Income-tax by the Assessing Officer reproduced herein above, it is clear that the Additional Commissioner of Income-tax had not granted permission to initiate re-opening proceedings against the Respondent-Assessee. The view of the Additional Commissioner of Income-tax was subject to the approval of his superior – the Commissioner of Income Tax. Thus, there was no final sanction granted by the Additional Commissioner of Income-tax for issuing the notice dated 25th March, 2011 to re-open the Assessment. Further, it is the Commissioner of Income-tax who directed the issuance of the notice under section 148 of the Act to the Assessing Officer. Thus, it is very clear that the final sanction/approval was that of the Commissioner of Income-tax as indicated in the Form and also in the two letters dated 24th March, 2011 and 25th March, 2011.

10. This Court in Ghanshyam K Khabrani (supra) while dealing with almost similar/identical situation has observed as under:—

” The approval which has been granted is not by the Additional Commissioner of Income-tax but by the Commissioner of Income Tax. There is no statutory provision here under which a power to be exercised by an officer can be exercised by a superior officer. When the statute mandates the satisfaction of a particular manner, it has to be done in that manner. In a similar situation, the Delhi High Court in CIT v. SPL’s Siddhartha Ltd. (ITA No. 836 of 2011 decided on September 14, 2011) – since reported in [2012] 345ITR 223 (Delhi) held that powers which are conferred upon a particular authority have to be exercised by that authority and the satisfaction which the statute mandates of a distinct authority cannot be substituted by the satisfaction of another. We are in respectful agreement with the judgment of the Delhi High Court.”

(emphasis supplied)

11. In the aforesaid facts, the view taken by the Tribunal, cannot be found fault with as it merely follows the decision of this Court in Ghanshyam K Khabrani (supra). Therefore, the question as framed does not give rise to any substantial question of law. Thus, not entertained.

12. Accordingly, Appeal dismissed. No order as to costs.

The Special Leave Petition preferred by the revenue before the Hon’ble Apex Court against this judgment was dismissed in Aquatic Remedies (P.) Ltd. (supra). ”

6. Respectfully following the aforesaid decision of Mumbai Tribunal , which in turn relied upon the decision of Hon’ble Bombay High Court and Hon’ble Delhi High Court supra, we hold that the reopening has been made in the instant case by taking approval u/s 151 of the Act from both the Additional CIT as well as Principal CIT which would not be in consonance with the provisions of section 151 of the Act and hence would become fatal to the entire assumption of jurisdiction and consequential framing of reassessment proceedings by the learned AO. Accordingly, the entire reassessment proceedings are hereby quashed. Hence, one of the facets of Ground No.4 challenging the validity of assumption of jurisdiction u/s 147 of the Act is allowed in the above mentioned terms. Since the reassessment is quashed on this technical issue, the other legal grounds raised by the assessee as well as the grounds raised by the assessee on merits need not be adjudicated and they are left open.

7. In the result, the appeal of the assessee is allowed.”

4. Respectfully following the same, the Ground No. 12 raised by the assessee is hereby allowed and accordingly, we quash the reassessment proceedings for invalid assumption of jurisdiction due to invalid approval given by the Competent Authority u/s 151 of the Act. Since, the reassessment is quashed on the aforesaid legal aspect, the adjudication of other factual and legal grounds become academic in nature and they are left open.

5. In the result, the appeal of the assessee is partly allowed.

Order pronounced in the open court on 29-Sep-2026.