Invalid sanction for reopening assessment renders the notice and all consequential reassessment orders unsustainable.

Where reopening of assessment is sanctioned under the wrong clause of section 151, the sanction is invalid and the reassessment notice founded on it cannot survive. The Bombay HC applied its earlier view that a notice issued on defective sanction is unsustainable, and an assessment order based on that notice must also fall. On that reasoning, the impugned notices, assessment order and consequential assessment-related orders were quashed and set aside in favour of the assessee.

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Issues: Whether the sanction for reopening the assessment was obtained under the correct provision and, if not, whether the impugned notices and consequential assessment orders were liable to be quashed.

Analysis: The petition related to Assessment Year 2017-2018. The challenge to the reopening was based on improper sanction. The Court followed its earlier view that, where sanction is required under the applicable clause of section 151, sanction granted under the wrong clause is invalid and the notice founded on such sanction cannot survive. An assessment order based on an invalid notice likewise falls with it. Applying that approach, the Court treated the impugned notices, assessment order, and consequential orders as unsustainable.

Conclusion: The sanction was invalid and the impugned notices and all consequential assessment-related orders were quashed and set aside in favour of the assessee.

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