SBC Minerals Pvt Ltd v. ACIT · Delhi High Court on §151: sanction without application of mind voids the §148 notice
Does a mechanical §151 approval invalidate the consequent §148 notice?
Yes. Where the §151 approval records no reasons and refers to no material, the sanction and the §148 notice fall together.
Facts in brief
- The AO issued a notice under §148A(b), passed an order under §148A(d), and followed with a §148 notice.
- The assessee challenged the §151 sanction as granted mechanically, without application of mind.
Issue before the bench
Whether a §151 approval lacking reasons and reference to relevant material is a valid sanction.
Held
Satisfaction under §151 is essential to a valid approval; an approval without reasons or reference to material is no approval in law.
The sanction and the consequent §148 notice were quashed.
Practitioner takeaway
Call for the sanction record under RTI or in objections; a rubber-stamp approval is a complete answer to the reopening.
Plead the sanction defect separately from the information defect; each is an independent ground.
More on this topic: Section 148 & 148A: Reassessment case law · Need this drafted? Reassessment & Section 148 Support for CA Firms