Asal, a son of our shaykh, has opened the grave of our Shaykh and put his wifes body in the area of the grave that was allotted to our Shaykh. Now we want to change the place and lay the body in another spot in the same grave. Is this permissible according to our Prophet, sallallaahu ‘alayhi wa sallam? Kindly guide us.

All perfect praise be to Allah, The Lord of the worlds. I testify that there is none worthy of worship except Allah and that Muhammad, sallallahu ‘alayhi wa sallam, is His slave and Messenger.

The question needs clarification. Are you asking about moving the body of the Shaykh, meaning burying it in another place other than the place allotted for it, in which the woman was buried, or digging the woman's grave and moving her body to bury it in another place? In any case, the basic principle is that it is forbidden to dig up a grave in which the buried person has not turned to dust, except for a valid reason, as mentioned by scholars. They gave examples of the cases in which it is allowed to dig up a grave. An-Nawawi said:

"According to the consensus of the scholars of our school of Fiqh, it is impermissible to exhume the grave for a reason that is not acceptable according to the Sharia. It is allowed only due to Sharia-acceptable reasons, as has been underlined earlier. In brief, it is permissible to exhume the grave if the deceased has completely decomposed and become dust. In that case, it is permissible to bury another body in it, and it is permissible to cultivate that land and all other means of benefiting from it... All of this applies if no trace of the body is left, whether bones or otherwise. But if it is necessary to bury another body in the same grave before the first one has decomposed, then it is permissible." [Al-Majmoo‘]

Ibn Qudaamah said, "(Imaam) Ahmad was asked about exhuming the grave and moving the dead body to another grave. He replied, 'It is allowed if there is harm to the dead body (in the first grave); the bodies of Talhah and ‘Aa'ishah were moved from their places...'" [Al-Mughni]

If the son had no valid reason for what he did, then he bears a sin for it and it is incumbent on him to repent to Allah. And if there is no valid reason for changing the place of burial for the body, then it is impermissible for you to do that; rather, you should honor the sanctity of the dead and not take this matter lightly. One of the Sharia-acceptable reasons for exhuming the grave is when a body is buried in the property of another person. The owner of the land has the right to request digging up the grave, although it is better that he does not make such a request. Al-Maawardi said, "If a body is buried in a land owned by a person without his permission, then the area where he is buried is considered  to have been unjustly taken from its legitimate owner. Ash-Shaafi‘i held that it is disliked to move the body because this violates the sanctity of the dead person. But if he moved it, it is permissible for him to do so." [Al-Haawi]

It should be noted that it is impermissible for a living person to dig his grave in a public cemetery (which is endowed to all Muslims). If he does so and another person buries a body in it, it is prohibited to dig up the grave and move this body to another location, as has been underlined by scholars.

Hawaashi Ash-Sharwaani (book) cited the view of some Shaafi‘i scholars, reading:

"It should be known that what people do nowadays of digging and constructing graves in a public cemetery before their death is impermissible, because although others are allowed to bury in it, they should refrain from that out of respect for the construction though the construction itself is impermissible and to avoid potential dissension and dispute among Muslims. However, if someone transgressed and buried a body in that grave (that was prepared by a living person for himself), then it is impermissible to dig it up (to move the body), and the one who buried the body in it is not liable to give the expenses of construction to the former (who constructed it) because the former's action has no legal sanctity (because it is not approved by the Sharia in the first place)."

Lastly, we would like to emphasize two points:

Firstly, we advise you to consult with local scholars, seek their opinion, and ask about the religious rulings of what you intend to do, as they are more aware of the situation in your community. Allah, The Exalted, says (what means): {So, ask the people of the message if you do not know.} [Quran 16:43]

Secondly, it is prohibited to build shrines over graves; this may lead to committing Shirk (associating partners with Allah in worship). Please, refer to fatwas 9943 and 87505.

Allah knows best.