Reassessment sanction requirement under Section 151(ii) made prior approval by the competent authority mandatory for notices beyond three years.

A reassessment initiated beyond three years from the relevant assessment year required prior sanction from the Principal Chief Commissioner of Income Tax under Section 151(ii) of the Income-tax Act, 1961. Sanction recorded by the Principal Commissioner was invalid, and the proviso to Section 151 inserted with effect from 1 April 2023 did not apply to a notice and order issued on 21 April 2022. As the statutory approval was not obtained from the competent authority, the notice under Section 148A(b), the order under Section 148A(d), and the notice under Section 148 were quashed and set aside.

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Issues: Whether the reassessment notice and the order under the Income-tax Act, 1961 were vitiated for want of sanction by the competent authority under Section 151(ii), in a case relating to Assessment Year 2018-19.

Analysis: The impugned order and notice were issued on 21 April 2022, beyond three years from the relevant assessment year, and the sanction recorded was by the Principal Commissioner of Income Tax. For such a case, the competent sanctioning authority was the Principal Chief Commissioner of Income Tax under Section 151(ii) of the Income-tax Act, 1961. The proviso to Section 151, inserted with effect from 1 April 2023, was inapplicable. The sanction was therefore invalid.

Conclusion: The notice issued under Section 148A(b), the order under Section 148A(d), and the notice under Section 148 were quashed and set aside.

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