s.292BC — Approvals deemed administrative and supervisory
A retrospective provision that deems an approval given in assessment, reassessment or recomputation proceedings to be administrative and supervisory, and protects it from attack for insufficient reasons or for defects of authentication or communication.
Inserted by section 33 of the Finance Act, 2026 with retrospective effect from 1 April 2021. It was not in the Finance Bill, 2026 as introduced, and the Memorandum says nothing about approvals. The Tribunal has applied it against assessees in 2026 and cannot rule on its validity; the Bombay High Court, on 5 August 2026, held it inapplicable to an approval of 30 March 2021 and expressed no view on validity. Section 522(3) of the Income-tax Act, 2025, substituted by section 121 of the Finance Act, 2026, is in substantially the same operative words from 1 April 2026.
Income-tax Act, 1961
s.292BC
Income-tax Act, 2025
s.522(3)
In force from 1 April 2026, but s.536(2)(c) preserves the 1961 Act for tax years beginning before that date.
In short
Section 292BC of the Income-tax Act, 1961 provides, "Notwithstanding anything contained in this Act or in any judgment, order or decree of any Court" and "for the removal of doubts", that any approval given by an income-tax authority in relation to any assessment, reassessment or recomputation proceedings "shall be deemed to be administrative and supervisory in nature". Such an approval is not invalid "by reason of any insufficiency of the reasons recorded or by reason of any defect in the form or manner of its authentication or communication including whether digital signature have been appended to such approval or not, where such approval is granted electronically". It was inserted by the Finance Act, 2026 with retrospective effect from 1 April 2021. It is directed at the ground that an approval, such as the approval for a search assessment under section 153D or the sanction for reopening under section 151, was given mechanically. In ACIT, Circle-1(2), Bhubaneswar v. M/s. Serajuddin & Co. (Orissa High Court, 15 March 2023, para 17) the Bench had held: "Where the approval is granted mechanically, it would vitiate the assessment order itself." The deeming in the section tracks the reasoning in Kailash Moudgil v. Deputy Commissioner of Income-tax (Income-tax Appellate Tribunal, Special Bench, Delhi, 2 December 1999) that the approval of a block assessment under section 158BG "is only an administrative approval and not a judicial approval". That order did not decide that an approval given without looking at the record is valid. The counterpart in the Income-tax Act, 2025 is section 522(3). It opens "Irrespective of anything contained in this Act", has no override of judgments and no "for the removal of doubts", and operates from 1 April 2026.
What the provision does
Deems an approval in assessment, reassessment or recomputation proceedings to be administrative and supervisory, and removes two grounds of attack on an approval that was given: insufficiency of the reasons recorded, and defects in the form or manner of its authentication or communication, including the absence of a digital signature. On its own words it does not supply an approval where none was given, does not validate an approval by the wrong authority, and does not reach an approval granted before 1 April 2021. It nowhere uses the words "application of mind". It does not say that an assessment already annulled by an order that has become final is revived. It is confined to approvals: the requirement of a signature on a notice under section 282A(1) is not touched by it.
Threshold questions
- Whether an approval was in fact given, and by the authority the provision requiring it names
- Whether the approval is dated on or after 1 April 2021
- Whether the approval was granted electronically
- Whether the objection is only to the reasons, signature or communication of the approval, or the record shows that the authority did not examine the file
- Whether the step attacked is an approval in relation to assessment, reassessment or recomputation proceedings
- Whether an annulment for a mechanical approval had become final before the Finance Act, 2026 was enacted on 30 March 2026
In practice
The recurring disputes.
Whether the ground of mechanical approval survives the section
The Revenue's case is that the basis of the earlier decisions is removed in terms. Serajuddin (para 22) required "some indication that the approving authority has examined the draft orders", and Capital Broadways Pvt. Ltd. v. Income Tax Officer Ward 5(3) Delhi (Delhi High Court, 3 October 2024, para 14) set aside a notice where the sanction read "Yes I am satisfied". Both turn on what the approval records, and the section says that insufficiency of recorded reasons does not invalidate. The Tribunal has dismissed approval grounds on that footing, and in Clarion Agro Products Private Limited v. ACIT, Central Circle 3(1), Hyderabad (Hyderabad, 8 July 2026, paras 9.1 and 9.2) treated factual errors in the approval and the absence of any reference to the records as defects of form. The assessee's case is that the label does not remove the basis. The Revenue argued that the approval is administrative in Serajuddin and conceded it in The Pr. Commissioner of Income Tax v. Sapna Gupta (Allahabad High Court, 12 December 2022), and lost both times, because the courts required application of mind from an administrative authority. "Insufficiency of the reasons recorded" is not the same thing as a record showing that the authority never saw the file, as in Pr. Commissioner of Income Tax (Central)-2 v. Anuj Bansal (Delhi High Court, 13 July 2023), where only the draft, without the records, went to the approving authority. The firm's view is that the section answers thin or absent reasons on the face of an approval and defects of signature or communication. It does not answer a record which proves that the authority did not examine the file. The point is open.
Whether the section reaches orders already set aside and appeals already pending
The Revenue's case is that a retrospective change of basis binds every matter still in the appellate chain. In Shri Prithvi Cotton Mills Ltd. v. Broach Borough Municipality (Supreme Court, Constitution Bench, 25 April 1969) the validating Act was applied to writ petitions pending when it was passed, and section 292BC carries a non-obstante clause directed at judgments. The Tribunal at Raipur, in Income Tax Officer, Ward-3(1), Raipur v. Manohar Gangwani (single member, 16 October 2026), recalled its own order of 6 April 2026 because the section had been overlooked. The assessee's case is that an order final between the parties cannot be displaced by legislation. S.R. Bhagwat v. State of Mysore (Supreme Court, 12 September 1995) holds that "a binding judicial pronouncement between the parties cannot be made ineffective with the aid of any legislative power by enacting a provision which in substance over-rules such judgment". The section has no clause validating assessments or reviving annulled ones, and its override names "any Court" while most of these annulments are Tribunal orders. The firm's view is that an annulment which had become final before 30 March 2026, with no appeal pending, is not reopened; in a pending appeal and on a fresh file the section applies if it is valid, and only to what its words cover. None of these decisions rules on its validity.
Whether the section is confined to approvals granted electronically, and whether a sanction is an approval
The section ends "where such approval is granted electronically". The assessee's case is that those words govern the whole section, so that an approval given on paper is outside it, and that a "sanction" under section 151 is not an "approval" at all. The assessee adds that "no statute shall be construed to have a retrospective operation unless such a construction appears very clearly in the terms of the Act, or arises by necessary and distinct implication" (Commissioner of Income Tax (Central)-I, New Delhi v. Vatika Township Private Limited, Supreme Court, Constitution Bench, 15 September 2014, para 34), so that doubtful words are not to be given retrospective reach. The Revenue's case is that the closing words attach only to the nearest words, on authentication and communication, and leave the deeming and the protection for insufficient reasons general; and that a sanction under section 151 is an approval in relation to reassessment proceedings. The Karnataka High Court, in The Income Tax Officer v. Joseph Chacko (Division Bench, 16 April 2026, para 6.1), on an unsigned section 151 sanction, held that the impact of the section "necessitates reconsideration upon appropriate pleadings" and remitted the writ petition with all contentions open. Both are questions of construction and neither has been decided.
Whether the absence of an override in section 522(3) leaves the earlier decisions intact under the 2025 Act
The assessee's case is that in one Finance Act Parliament used two forms: for sections 147A and 292BC, an override of judgments with "for the removal of doubts" and a retrospective date; for section 522(3), a plain provision opening "Irrespective of anything contained in this Act". Vatika Township (para 39) treats the choice between such forms as "a conscious decision of the legislature". Section 522(3) is therefore an ordinary substantive provision, and its opening words override other provisions of the Act, not the decisions that require application of mind. The Revenue's case is that no override was needed because no judgment had construed the 2025 Act, and that prospectively Parliament may define the character of an approval and the conditions of its validity; the operative words of the two provisions are substantially the same and were enacted together. The firm's view is that under the 2025 Act the ground that an approval gives no reasons, or says only "approved", is gone. What survives is the requirement that there be an approval, by the right authority, given after the authority has in fact considered the matter. The point is open.