Reassessment limitation and sanction defects invalidate reopening when time limits expire or approval comes from the wrong authority.

Reassessment notices were analysed under the substituted reassessment regime and TOLA. For assessment year 2015-16, the notice issued on 31 July 2022 was beyond the six-year outer limit that had expired on 31 March 2022, and TOLA did not extend limitation further; the reopening was therefore barred by limitation. For assessment year 2017-18, the notice was issued beyond three years from the end of the year, so prior approval of the higher specified authority was required, but approval from the Principal Commissioner was not competent; the reopening was therefore jurisdictionally defective.

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Issues: (i) Whether the reassessment notice for assessment year 2015-16 was barred by limitation under the reassessment regime read with TOLA. (ii) Whether the reassessment notice for assessment year 2017-18 was invalid for want of approval from the competent specified authority under the reassessment provisions.

Issue (i): Whether the reassessment notice for assessment year 2015-16 was barred by limitation under the reassessment regime read with TOLA.

Analysis: The notice under section 148 was issued on 31.07.2022 after the substituted reassessment regime had come into force. For assessment year 2015-16, the six-year outer limit under the applicable limitation framework had expired on 31.03.2022. The extended time protection under TOLA did not carry the matter beyond that point for this assessment year. The reassessment was therefore hit by limitation.

Conclusion: The reopening for assessment year 2015-16 was invalid and the assessee succeeded on this issue.

Issue (ii): Whether the reassessment notice for assessment year 2017-18 was invalid for want of approval from the competent specified authority under the reassessment provisions.

Analysis: For assessment year 2017-18, the notice under section 148 was issued beyond three years from the end of the relevant assessment year, so the approval requirement under the amended sanction provision applied. In such a case, prior approval had to be obtained from the higher specified authority named for the longer-lapsed period. Approval was instead obtained from the Principal Commissioner of Income Tax, which was not the competent authority for that category of reassessment.

Conclusion: The reopening for assessment year 2017-18 suffered from a jurisdictional defect and the assessee succeeded on this issue.

Final Conclusion: In both appeals, the reassessment proceedings were quashed, the additions did not survive for adjudication, and the assessee obtained complete relief in respect of the impugned reassessments.

Ratio Decidendi: A reassessment notice is void if issued beyond the surviving limitation period, and where the statute assigns sanction to a higher specified authority for delayed reopening, approval by a lower authority does not confer jurisdiction.

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