My reopening notice was sanctioned by the Commissioner instead of the Joint Commissioner. Does approval by a more senior officer cure the defect?
No. The Delhi High Court held that where section 151 names the Joint Commissioner as the authority to be satisfied, sanction by the Commissioner is not compliance, even though he is senior. The file here was routed through the Additional Commissioner, but he merely endorsed "CIT may kindly accord sanction" and applied no mind of his own. The Court held this was not an irregularity curable under section 292B. Where a statute requires a thing to be done in a certain manner it must be done in that manner alone, and the satisfaction of one authority cannot be substituted by that of another. The Revenue's appeal was dismissed.
Decided by the High Court (High Court of Delhi - Justice A.K. Sikri and Justice Siddhartha Mridul (oral judgment by A.K. Sikri, J)) on 2011-09-14, reported as ITA No. 836 of 2011 (Delhi High Court). It bears on section 151, section 151(2), section 148, section 147, section 292B, section 2(28C) of the Income Tax Act 1961, in Reassessment & Reopening and Assessment & Scrutiny matters.
This is the short, heavily cited authority on defective sanction for reopening - the harvested page records it as followed in 85 later decisions. It gives practitioners two distinct points. The first is jurisdictional: sub-sections (1) and (2) of section 151 are independent provisions naming different authorities, "Joint Commissioner" is separately defined in section 2(28C) to include an Additional Commissioner, and approval by anyone other than the named officer is no approval at all. Section 292B does not save it. The second point is about the quality of the satisfaction: it must be the named officer's own, independent, and neither borrowed nor dictated. An endorsement forwarding the file upwards shows the opposite. The Court called for and examined the departmental file to see what actually happened, which is what makes the case useful - the argument is won on the noting, not on the assertion.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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For assessment year 2002-03 the company filed its return on 26 September 2002 showing a loss of Rs.27.63 lakh, which was processed under section 143(1) on 26 February 2003. On 12 March 2009, well beyond four years from the end of the relevant assessment year, a notice was issued under section 147 read with section 148. The basis was information from the Investigation Wing that one Mr Dipak Gupta was providing accommodation entries, taking cash and issuing demand drafts or cheques against commission which the recipients then introduced as share capital or loans; three parties were said to have given the company entries totalling Rs.5 lakh. The Assessing Officer's noting of 12 March 2009 recorded his reasons and submitted the record "for kind perusal and approval of the Commissioner of Income tax, Delhi-III". The file passed through the Additional Commissioner, Range 9, who endorsed on it only "CIT may kindly accord sanction", and the Commissioner signed on 12 March 2009. The Tribunal quashed the reassessment for want of the Joint or Additional Commissioner's approval, and rejected the Revenue's plea that this was a mere irregularity curable under section 292B. The Revenue appealed under section 260A.
The appeal was dismissed and no question of law was found to arise. On the file as produced, the Assessing Officer had specifically sought the Commissioner's approval alone, so it could not be said that the Joint or Additional Commissioner had granted it. The Additional Commissioner had neither applied his mind nor given any sanction; he had simply asked the Commissioner to accord it. That is not an irregularity curable under section 292B. Sub-sections (1) and (2) of section 151 are two independent provisions; "Joint Commissioner" is defined in section 2(28C) to mean a person appointed as Joint Commissioner or Additional Commissioner, and "Commissioner" is separately defined in section 2(16). Where the statute designates a particular authority to record satisfaction, only that authority can do so, and the satisfaction must be independent and not borrowed or dictated. The Tribunal had rightly decided the legal question.
The Court began from the structure of the Act. Section 116 lists the income tax authorities as different and distinct authorities, each to exercise its powers as conferred in specified circumstances. If the powers of one are arrogated by another without statutory mandate, it creates chaos in the administration of the law and the hierarchy means nothing. From that follows the proposition that the satisfaction of one authority cannot be substituted by that of another. The Court applied the settled rule that where a statute requires a thing to be done in a certain manner it must be done in that manner alone, citing its own decision in Naveen Khanna and the Supreme Court in J.A.C. Saldanna and Shantilal Mangaldas, and the connected principle that where authority is given expressly by affirmative words on a defined condition, the expression of that condition excludes doing the act in other circumstances. It then took the point one step further, to the quality of the satisfaction. The designated officer must apply his own independent mind; a satisfaction that is borrowed or dictated will not do. It relied on Sheo Narain Jaiswal, where an Assessing Officer acting at the behest of a superior was held to have assumed jurisdiction badly for want of the condition precedent, and on the Supreme Court in Anirudh Sinhji Karan Sinhji Jadeja, that a statutory authority vested with jurisdiction must exercise its own discretion, and that discretion exercised under the direction of a higher authority is a failure to exercise discretion at all.
Satisfaction of one authority cannot be substituted by the satisfaction of the other authority.
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Handle my notice → Ask a CA on WhatsAppNo. The Delhi High Court held that where section 151 names the Joint Commissioner as the authority to be satisfied, sanction by the Commissioner is not compliance, even though he is senior. The file here was routed through the Additional Commissioner, but he merely endorsed "CIT may kindly accord sanction" and applied no mind of his own. The Court held this was not an irregularity curable under section 292B. Where a statute requires a thing to be done in a certain manner it must be done in that manner alone, and the satisfaction of one authority cannot be substituted by that of another. The Revenue's appeal was dismissed. This was decided by the High Court (High Court of Delhi - Justice A.K. Sikri and Justice Siddhartha Mridul (oral judgment by A.K. Sikri, J)) and bears on section 151, section 151(2), section 148, section 147, section 292B, section 2(28C) of the Income Tax Act 1961. It is reported as ITA No. 836 of 2011 (Delhi High Court). This is the short, heavily cited authority on defective sanction for reopening - the harvested page records it as followed in 85 later decisions. It gives practitioners two distinct points. The first is jurisdictional: sub-sections (1) and (2) of section 151 are independent provisions naming different authorities, "Joint Commissioner" is separately defined in section 2(28C) to include an Additional Commissioner, and approval by anyone other than the named officer is no approval at all. Section 292B does not save it. The second point is about the quality of the satisfaction: it must be the named officer's own, independent, and neither borrowed nor dictated. An endorsement forwarding the file upwards shows the opposite. The Court called for and examined the departmental file to see what actually happened, which is what makes the case useful - the argument is won on the noting, not on the assertion. If it applies to you, the first step is this: Ask for the sanction noting itself, not just a statement that approval was obtained; the Court here called for the records and decided the case on what the file showed.
For assessment year 2002-03 the company filed its return on 26 September 2002 showing a loss of Rs.27.63 lakh, which was processed under section 143(1) on 26 February 2003. On 12 March 2009, well beyond four years from the end of the relevant assessment year, a notice was issued under section 147 read with section 148. The basis was information from the Investigation Wing that one Mr Dipak Gupta was providing accommodation entries, taking cash and issuing demand drafts or cheques against commission which the recipients then introduced as share capital or loans; three parties were said to have given the company entries totalling Rs.5 lakh. The Assessing Officer's noting of 12 March 2009 recorded his reasons and submitted the record "for kind perusal and approval of the Commissioner of Income tax, Delhi-III". The file passed through the Additional Commissioner, Range 9, who endorsed on it only "CIT may kindly accord sanction", and the Commissioner signed on 12 March 2009. The Tribunal quashed the reassessment for want of the Joint or Additional Commissioner's approval, and rejected the Revenue's plea that this was a mere irregularity curable under section 292B. The Revenue appealed under section 260A. The matter was decided on 2011-09-14 by the High Court (High Court of Delhi - Justice A.K. Sikri and Justice Siddhartha Mridul (oral judgment by A.K. Sikri, J)). On those facts the High Court held as follows. The appeal was dismissed and no question of law was found to arise. On the file as produced, the Assessing Officer had specifically sought the Commissioner's approval alone, so it could not be said that the Joint or Additional Commissioner had granted it. The Additional Commissioner had neither applied his mind nor given any sanction; he had simply asked the Commissioner to accord it. That is not an irregularity curable under section 292B. Sub-sections (1) and (2) of section 151 are two independent provisions; "Joint Commissioner" is defined in section 2(28C) to mean a person appointed as Joint Commissioner or Additional Commissioner, and "Commissioner" is separately defined in section 2(16). Where the statute designates a particular authority to record satisfaction, only that authority can do so, and the satisfaction must be independent and not borrowed or dictated. The Tribunal had rightly decided the legal question.
The Court began from the structure of the Act. Section 116 lists the income tax authorities as different and distinct authorities, each to exercise its powers as conferred in specified circumstances. If the powers of one are arrogated by another without statutory mandate, it creates chaos in the administration of the law and the hierarchy means nothing. From that follows the proposition that the satisfaction of one authority cannot be substituted by that of another. The Court applied the settled rule that where a statute requires a thing to be done in a certain manner it must be done in that manner alone, citing its own decision in Naveen Khanna and the Supreme Court in J.A.C. Saldanna and Shantilal Mangaldas, and the connected principle that where authority is given expressly by affirmative words on a defined condition, the expression of that condition excludes doing the act in other circumstances. It then took the point one step further, to the quality of the satisfaction. The designated officer must apply his own independent mind; a satisfaction that is borrowed or dictated will not do. It relied on Sheo Narain Jaiswal, where an Assessing Officer acting at the behest of a superior was held to have assumed jurisdiction badly for want of the condition precedent, and on the Supreme Court in Anirudh Sinhji Karan Sinhji Jadeja, that a statutory authority vested with jurisdiction must exercise its own discretion, and that discretion exercised under the direction of a higher authority is a failure to exercise discretion at all. In the words reproduced by the source cited on this page: "Satisfaction of one authority cannot be substituted by the satisfaction of the other authority."
It was decided by the High Court on 2011-09-14 and is reported as ITA No. 836 of 2011 (Delhi High Court). Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 151, section 151(2), section 148, section 147, section 292B, section 2(28C), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The appeal was dismissed and no question of law was found to arise. On the file as produced, the Assessing Officer had specifically sought the Commissioner's approval alone, so it could not be said that the Joint or Additional Commissioner had granted it. The Additional Commissioner had neither applied his mind nor given any sanction; he had simply asked the Commissioner to accord it. That is not an irregularity curable under section 292B. Sub-sections (1) and (2) of section 151 are two independent provisions; "Joint Commissioner" is defined in section 2(28C) to mean a person appointed as Joint Commissioner or Additional Commissioner, and "Commissioner" is separately defined in section 2(16). Where the statute designates a particular authority to record satisfaction, only that authority can do so, and the satisfaction must be independent and not borrowed or dictated. The Tribunal had rightly decided the legal question. It arises in Reassessment & Reopening and Assessment & Scrutiny matters, on section 151, section 151(2), section 148, section 147, section 292B, section 2(28C) of the Income Tax Act 1961, and was decided by High Court of Delhi - Justice A.K. Sikri and Justice Siddhartha Mridul (oral judgment by A.K. Sikri, J). Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Work out which sub-section of section 151 applies on your facts - whether an assessment under section 143(3) or section 147 had been made, and whether four years had expired - because that fixes which officer had to be satisfied. Where the file was merely routed through the named officer, take the point that forwarding is not satisfaction; look for words showing he applied his own mind. Meet the section 292B argument head on: absence of the sanction the statute requires is a want of jurisdiction, not a curable defect in form.
Still good law. I read the whole eight page judgment including the operative dismissal. The harvested page records it as cited in 85 later decisions. I could not check separately whether the Revenue took it to the Supreme Court. Section 151 was recast from 1 April 2021 along with the rest of the reassessment machinery, so the authorities named for later years are different, though the principle about the designated authority's own satisfaction is not tied to the old text. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The batch line dated the case to 2012; it was decided on 14 September 2011 and the date is taken from the judgment. The judgment sets out section 151 in full but describes the approval as required "under Section 151(1)", while the operative reasoning - that only the Joint or Additional Commissioner could sanction - corresponds to section 151(2), which is what applies where no assessment under section 143(3) or section 147 had been made and the return had merely been processed under section 143(1). The Court itself notes that the two sub-sections are independent, so I have listed both. The judgment's paragraph numbering restarts, running 1 to 8 and then 5, 6, 7, which appears to be a slip in the source. Sections 292B and 2(28C) are added from the judgment. The source page carried no reporter citations, so the case number is given instead. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The appeal was dismissed and no question of law was found to arise. On the file as produced, the Assessing Officer had specifically sought the Commissioner's approval alone, so it could not be said that the Joint or Additional Commissioner had granted it. The Additional Commissioner had neither applied his mind nor given any sanction; he had simply asked the Commissioner to accord it. That is not an irregularity curable under section 292B. Sub-sections (1) and (2) of section 151 are two independent provisions; "Joint Commissioner" is defined in section 2(28C) to mean a person appointed as Joint Commissioner or Additional Commissioner, and "Commissioner" is separately defined in section 2(16). Where the statute designates a particular authority to record satisfaction, only that authority can do so, and the satisfaction must be independent and not borrowed or dictated. The Tribunal had rightly decided the legal question.
TaxSphere, “CIT v SPL's Siddhartha Ltd”, https://taxnotice.vittsphere.com/caselaw/case/cit-v-spl-s-siddhartha-ltd/ (validity last checked 2026-08-29)
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