Delhi High Court Upholds 'Yes I Am Convinced' as Valid Reason for Income Tax Reassessment

The Delhi High Court upheld the validity of an Income Tax Commissioner’s sanction for reopening an assessment under Section 151 of the Income Tax Act, 1961, even when expressed as “Yes, I am convinced.”

A Division Bench of Justices V. Kameswar Rao and Vinod Kumar ruled that the Act does not mandate a particular format for approval, provided the Commissioner records satisfaction after due application of mind.

The Court found the sanction in this case to be reasoned and non-mechanical, holding that the reassessment proceedings were lawfully initiated and setting aside the Income Tax Appellate Tribunal’s contrary order.

[Principal Commissioner of Income Tax v. XYZ Company]