Reassessment sanction by wrong authority invalidated notice and 148A(d) order beyond three years under income-tax law.

A reassessment notice under Section 148 and the order under Section 148A(d) were invalid where the assessment year was beyond three years from the relevant date and sanction under Section 151(ii) had to be accorded by the Principal Chief Commissioner of Income Tax. Sanction was instead granted by the Principal Commissioner of Income Tax, so the statutory approval was by the wrong authority. The proviso inserted in Section 151 from 1 April 2023 did not apply. The reassessment proceedings were therefore invalid and the notice and order were quashed.

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Issues: Whether the reassessment notice under Section 148 of the Income-tax Act, 1961 and the order under Section 148A(d) were vitiated for want of sanction by the competent authority under Section 151(ii), the assessment year being beyond three years from the relevant date.

Analysis: The matter related to Assessment Year 2018-2019 and the impugned notice and order were issued on 7 April 2022, i.e. beyond three years. In such a case, sanction had to be accorded by the Principal Chief Commissioner of Income Tax under Section 151(ii). The record showed that sanction was granted by the Principal Commissioner of Income Tax. The proviso inserted in Section 151 with effect from 1 April 2023 had no application to the case. The defect in sanction therefore rendered the reassessment proceedings invalid.

Conclusion: The sanction was invalid and the impugned notice under Section 148 and the order under Section 148A(d) were quashed and set aside.

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