Venky Steels Pvt. Ltd. Vs CIT (Patna High Court)
The Patna High Court dismissed a writ petition filed by Venky Steels Pvt. Ltd., challenging the reopening of its income tax assessment for the year 2013–14 under Section 148 of the Income Tax Act, 1961. The petitioner had contended that the notice, issued in March 2019, lacked proper approval as mandated under Section 151, particularly since the reassessment was initiated beyond four years. The court had earlier directed the Income Tax Department to produce evidence of sanction by the designated authority. In response, the department submitted communications from the Principal Commissioner of Income Tax, Patna, confirming approval for issuing the notice, based on recorded reasons of the Assessing Officer (AO) regarding escaped income.
The petitioner argued that the approval was mechanical and lacked meaningful consideration, citing precedents such as N.C. Cables Ltd., Pioneer Town Planners Pvt. Ltd., and the Supreme Court ruling in Chhugamal Rajpal. These cases had faulted perfunctory approvals where only terms like “Yes” or “Approved” were used. However, the Patna High Court distinguished this case, noting that the AO had recorded detailed reasons and that the Commissioner’s written satisfaction referenced those reasons. It ruled that while elaborate reasoning by the approving authority is not necessary, the expression of satisfaction based on the AO’s rationale is adequate. As the Commissioner’s approval explicitly stated satisfaction on the recorded reasons, the Court held that the requirements of Section 151 were met. The petition was dismissed, allowing the petitioner liberty to appeal the assessment order, with the writ’s pendency period eligible for condonation of delay.
