Reopening under Section 148 issued before Section 151 sanction communication invalidated, resulting in quashing of reassessment and assessment.

A reopening notice issued under the income tax regime was held invalid because it was issued before the communication of the requisite administrative sanction to the Assessing Officer. The Tribunal reasoned that internal file notings or antecedent approvals do not satisfy the statutory communication requirement; the operative sanction must be formally communicated before issuing a notice to reopen. As a result, the consequent reassessment and assessment framed after the invalid notice were quashed and the appeal was allowed in favour of the taxpayer.

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Issues: Whether the notice issued under Section 148 of the Income-tax Act, 1961 on 26.03.2019, issued prior to communication of the sanction/approval under Section 151 of the Income-tax Act, 1961, is valid and whether consequent reassessment and assessment framed under Section 147 read with Section 143(3) of the Income-tax Act, 1961 are vitiated.

Analysis: The appeal challenges the reopening on the ground that the notice under Section 148 was issued on 26.03.2019, whereas the formal communication of the sanction under Section 151 by the Principal Commissioner of Income-tax (PCIT-4, Kolkata) was conveyed to the Assessing Officer only on 28.03.2019 although the internal approval notation bears an earlier date. The Tribunal examined whether internal notings or an approval recorded in file prior to communication can constitute a valid communicated sanction, having regard to authorities holding that an internal noting or decision attains operative effect only when the final decision-making authority's approval is communicated to the person concerned. The Tribunal applied these principles to the facts and found that the statutory requirement of communication of the sanction to the Assessing Officer before issuance of the Section 148 notice was not complied with.

Conclusion: The notice issued under Section 148 of the Income-tax Act, 1961 on 26.03.2019 is invalid for being issued prior to the communication of the sanction under Section 151; consequently the reopening under Section 147 and the assessment order passed under Section 147 read with Section 143(3) are quashed. The appeal is allowed in favour of the assessee.

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