AO's reassessment notice under Section 148 beyond four years without Commissioner approval renders revision under Section 263 invalid

ITAT Kolkata held that revision u/s 263 was invalid when the underlying reassessment order u/s 147/143(3) was void ab-initio. The AO issued notice u/s 148 beyond four years without mandatory approval from Commissioner-level authorities as required under Section 151(1). Since the statute mandates specific authority satisfaction for such notices, the reassessment order was jurisdictionally invalid and null in law. Following the legal maxim "Sublato Fundamento Credit Opus," all consequential actions including the revision order were deemed void. Decision favored the assessee.

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Issues:
1. Jurisdiction of the Assessing Officer to issue notice u/s 148 of the Income Tax Act.
2. Validity of re-assessment order passed by the Assessing Officer.
3. Legality of the order passed by the Principal Commissioner of Income Tax under section 263 of the Act.

Analysis:
1. The first issue revolves around the jurisdiction of the Assessing Officer (AO) to issue a notice u/s 148 of the Income Tax Act beyond four years from the end of the relevant assessment year. The appellant contended that the AO lacked the authority to reopen the assessment without approval from specific higher authorities as mandated by Section 151 of the Act. The Tribunal observed that the approval granted by the Additional Commissioner of Income Tax Range-3 did not meet the statutory requirement, rendering the reopening of the assessment invalid. Citing relevant case laws, the Tribunal emphasized that when a statute prescribes a specific manner for exercising a power, deviations are impermissible, leading to the nullification of the re-assessment order.

2. The second issue pertains to the validity of the re-assessment order passed by the AO. The Tribunal found that since the notice issued u/s 148 was without jurisdiction due to the lack of proper approval, the subsequent re-assessment order dated 05.12.2016 was deemed null and void in the eyes of the law. Relying on legal principles that mandate adherence to statutory provisions, the Tribunal concluded that the AO's order lacked jurisdiction, rendering it non-existent and legally unsustainable.

3. The final issue concerns the legality of the order passed by the Principal Commissioner of Income Tax under section 263 of the Act. Since the impugned order was based on the nullified re-assessment order, the Tribunal held that all consequential actions stemming from the AO's order were also null in the eyes of the law. Citing legal maxims and precedents, the Tribunal emphasized that once the foundation of proceedings is flawed, all subsequent orders and acts become invalid. Relying on earlier decisions of the Tribunal, the impugned order of the Principal Commissioner was quashed, and the appeal of the assessee was allowed, highlighting the importance of adherence to procedural and jurisdictional requirements in tax assessments.

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