Reassessment under the new regime fails where limitation under section 149 expires or approval under section 151 is taken from the wrong authority.

Reassessment notices issued under the new regime must satisfy both the applicable limitation under section 149 and the correct prior sanction under section 151. For AY 2015-16, the six-year limit had already expired when notice under section 148 was issued, so the extended ten-year period could not be applied retrospectively; the notice and resulting reassessment were time-barred and invalid. For AY 2016-17, notice issued after three years required approval of the higher specified authority, but approval was taken only from the Principal Commissioner, making the defect jurisdictional and the reassessment liable to be quashed.

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Issues: (i) Whether the notice issued under section 148 for AY 2015-16 was barred by limitation under the first proviso to section 149(1)(b) of the Income-tax Act, 1961. (ii) Whether the notice issued under section 148 for AY 2016-17 was invalid for want of approval from the correct specified authority under section 151 of the Income-tax Act, 1961.

Issue (i): Whether the notice issued under section 148 for AY 2015-16 was barred by limitation under the first proviso to section 149(1)(b) of the Income-tax Act, 1961.

Analysis: For AY 2015-16, the reassessment notice was issued on 29.07.2022 after the Finance Act, 2021 regime had come into force. The governing test was whether the six-year period under the unamended section 149 had already expired when the notice was issued. The Court applied the statutory scheme as explained by the Supreme Court and the coordinate bench, and held that the extended ten-year period could not be applied retrospectively where the six-year limit had already run out.

Conclusion: The notice under section 148 for AY 2015-16 was time-barred and the consequent reassessment was invalid.

Issue (ii): Whether the notice issued under section 148 for AY 2016-17 was invalid for want of approval from the correct specified authority under section 151 of the Income-tax Act, 1961.

Analysis: For AY 2016-17, the notice dated 30.07.2022 was issued beyond three years from the end of the assessment year. In that situation, section 151(ii) required prior approval of the higher specified authority under the new regime. The notice itself recorded approval only from the Principal Commissioner of Income Tax, which was insufficient for a notice issued after the expiry of three years. The Court therefore treated the defect as jurisdictional.

Conclusion: The notice under section 148 for AY 2016-17 was invalid for want of approval from the proper authority and the reassessment was liable to be quashed.

Final Conclusion: The reassessment proceedings for both years were set aside on jurisdictional grounds, and the Revenue's appeals failed while the assessee obtained substantive relief on the legality of the reopening.

Ratio Decidendi: For reassessment notices issued under the new regime, limitation under section 149 and prior sanction under section 151 must be tested with reference to the applicable statutory regime and the date of issuance of the notice; failure to satisfy either requirement renders the reopening invalid.

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