Invalid approval for reassessment beyond three years vitiates notice and quashes proceedings for lack of jurisdiction.

Where reassessment is initiated more than three years after the end of the relevant assessment year, section 151 of the Income-tax Act requires approval from the Principal Chief Commissioner or Chief Commissioner. Here, the notices under sections 148A(d) and 148 were issued beyond that period, but approval was taken from the Principal Commissioner instead. That defect was treated as a mandatory statutory violation, and the invalid sanction deprived the reassessment notice and ensuing proceedings of jurisdiction. The notice was therefore held invalid and the reassessment proceedings were quashed in favour of the assessee.

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Issues: Whether the reassessment notice and consequent proceedings were invalid for want of approval by the correct specified authority under section 151 of the Income-tax Act, 1961, when the reopening was initiated beyond three years from the end of the relevant assessment year.

Analysis: The reassessment notices under sections 148A(d) and 148 were issued after more than three years from the end of the relevant assessment year. In such a case, section 151 required approval from the Principal Chief Commissioner or Chief Commissioner, but the approval was obtained from the Principal Commissioner. The defect was held to be a mandatory statutory violation. Following the applicable precedent, the invalid approval rendered the notice and the ensuing reassessment proceedings without jurisdiction.

Conclusion: The reassessment notice was invalid and the consequent assessment proceedings were quashed; the issue was decided in favour of the assessee.

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