Delhi ITAT sets aside reassessment for invalid mechanical sanction under Section 151

The Delhi Bench of the Income Tax Appellate Tribunal in Kailash Bansal Vs ITO (ITAT Delhi) has struck down reassessment proceedings initiated under Section 147/Section 148 of the Income Tax Act 1961, on the ground that the mandatory sanction under Section 151 was accorded in a purely mechanical manner. The Tribunal held that such a perfunctory approval, evidenced only by a rubber-stamped “Yes, I am satisfied” and accompanied by an obvious inconsistency in the quantum of alleged escaped income, renders the initiation of reassessment void ab initio.

This order reiterates the settled principle that the sanctioning authority must demonstrate an independent application of mind to the material placed before it, and that a mere formal or ritualistic endorsement will not meet the statutory standard under Section 151.

Background of the appeal

The assessee, Kailash Bansal, had filed an appeal before the ITAT Delhi against the order of the Commissioner of Income-tax (Appeals) / National Faceless Appeal Centre (NFAC), Delhi dated 19.11.2026 for Assessment Year 2009-10.

The assessee’s primary grievance related to the very assumption of jurisdiction under:

  • Section 147 read with Section 148 (reopening of assessment), and
  • the completion of reassessment under Section 147 read with Section 144B.

The assessee contended that the reassessment proceedings were bad in law because:

  1. The notice dated 26.03.2016 issued under Section 148 by the ITO, Ward-2, Hisar, lacked a valid and lawful sanction under Section 151.
  2. Even if some form of approval existed, it did not qualify as a valid approval under Section 151 due to its mechanical nature and failure to reflect a conscious evaluation by the sanctioning authority.

The assessee’s counsel placed on record:

  • The Section 148 notice dated 26.03.2016 (at page 5 of the paper book), and
  • The Section 151 approval dated 09.05.2024 (at page 181 of the paper book).