Expression “Yes I am satisfied” in approval u/s 151 not such a vital defect on the basis of which, re-opening could be quashed
In a recent judgment, ITAT Chandigarh has held that expression “Yes I am satisfied” while granted approval under section 151 not such a vital defect on the basis of which, re-opening could be quashed
ABCAUS Case Law Citation:
5008 (2026) (01) abcaus.in ITAT
In the instant case, the assessee had challenged the order passed by the CIT(A) in upholding the reopening of assessment u/s 147 of the Income Tax Act, 1961 (the Act).
The Assessing Officer received information that land of the assessee was compulsorily acquired under Land Acquisition Act, 1894. The Land Acquisition Collector had passed an award.
Dissatisfied with that award, assessee approached Civil Court for determination of fair compensation which was determined by the Court and according to the AO, the assessee received a sum as interest and enhanced compensation u/s 28 of the Land Acquisition Act.
The AO in a view to brought to tax this compensation recorded reasons for re-opening of the assessment. The AO, thereafter determined the taxable income of the assessee vide assessment order passed u/s 143(3) read with Section 147 of the Act assessing 50% of alleged interest income received u/s 28 of the Income Tax Act as per Section 56(viii) and 57(iv) of the Income Tax Act.
Before the Tribunal, the assessee inter alia submitted that approval granted by JCIT, u/s 151 of the Income Tax Act was not in consonance to the provisions of the Income Tax Act.
According to the assessee, the expression used by JCIT as “Satisfied it is fit case” was not an appropriate approval for re-opening of the assessment. It was submitted that when judgement of the Hon’ble Supreme Court holds the field, then the AO ought to have not relied upon judgement of the Hon’ble Punjab & Haryana High Court. The assessee, relied upon several decisions wherein Hon’ble Courts had held that if expression ‘Yes I am satisfied’ is being used, then it is not a proper satisfaction.
The Tribunal observed that the assessee had relied upon the judgement of Hon’ble Madhya Pradesh High Court wherein it had been held that if expression “Yes I am satisfied” is being used, then it is to be construed as no application of mind by the competent authority while granting approval. However, in subsequent decisions, Hon’ble Delhi High Court had considered these aspects and elaborately held that it is not such a vital defect on the basis of which, re-opening could be quashed. It is an aspect wherein competent authority has exhibited its mind in a little bit different manner.
The Tribunal further opined that Revenue made reference to a large number of subsequent decisions which were subsequent to the decision of MP High Court. In view of the above, the ITAT held that there was no force in the submission that the approval given by JCIT was defective. assessee.
Though the Tribunal quashed the re-opening of assessment on the ground that tangible information possessed by the AO exhibiting escapement of income as the interest received u/s 28 of the Land Acquisition Act is not an income but compensation.
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