Reassessment notice issued after three years: whether s.151(ii) approval by Pr. CCIT was required; notice quashed.

Where reassessment notice under s.148 was issued beyond three years, the dominant issue was whether sanction under s.151(ii) was obtained from the correct "specified authority." Relying on SC rulings and consistent ITAT precedent, the Tribunal held that, after expiry of three years, prior approval must be of the Pr. CCIT and approval by the Pr. CIT/PCIT is inadequate in law. Since the notice was issued with sanction of the Pr. CIT, the notice lacked statutory authority and was quashed; consequently, the reassessment order under s.147 r/w s.144B was set aside as non est.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether an additional ground challenging jurisdiction-on the basis that notice under section 148 lacked approval of the correct "specified authority" under section 151(ii)-could be admitted though not raised before the first appellate authority.

(ii) Whether, where notice under section 148 was issued after more than three years from the end of the relevant assessment year, prior approval by a Principal Commissioner (instead of the authority contemplated by section 151(ii)) rendered the notice without authority of law, thereby vitiating the reassessment and consequential order under section 147 read with section 144B.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Admissibility of additional ground raising jurisdictional defect

Legal framework (as discussed): The Court applied the settled principle that a litigant may raise before a superior judicial authority an issue not urged before a lower authority when it is necessary in furtherance of justice.

Interpretation and reasoning: The Tribunal treated the objection as a legal challenge going to the root of jurisdiction (validity of the notice initiating reassessment). It held that the fact the issue was not raised before the first appellate authority could not obstruct adjudication, since deciding such a jurisdictional defect was necessary to dispense justice.

Conclusion: The additional ground was admitted for adjudication.

Issue (ii): Validity of section 148 notice issued beyond three years without approval of the specified authority under section 151(ii), and effect on reassessment order

Legal framework (as discussed): The Tribunal examined the statutory requirement that, where more than three years have elapsed from the end of the relevant assessment year, the "specified authority" for approving issuance of notice under section 148 is the higher authority contemplated by section 151(ii), and not the authority contemplated for cases within three years.

Interpretation and reasoning: On undisputed facts, the notice under section 148 was issued beyond three years. The Tribunal noted that the approval recorded for issuance of notice was by a Principal Commissioner, whereas section 151(ii) required approval by the higher specified authority when more than three years had elapsed. Treating prior approval by the correct specified authority as a jurisdictional precondition, the Tribunal held that approval by an authority not competent under section 151(ii) makes the notice "not supported by authority of law." Since reassessment proceedings rest on a valid notice, an invalid notice was held to be fatal to the consequent reassessment order under section 147 read with section 144B.

Conclusion: The notice under section 148 was quashed for want of approval by the specified authority under section 151(ii). Consequently, the reassessment order under section 147 read with section 144B did not survive and was also quashed. The same conclusion was applied mutatis mutandis for the second assessment year, the facts being identical except for dates. All grounds (including the additional ground) were allowed and the appeals were allowed.

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