Reassessment sanction defect under section 151 rendered the notice invalid and the consequential reassessment unsustainable.

A reassessment notice issued beyond three years required prior sanction from the authority prescribed under section 151 of the Income-tax Act, 1961. Approval by the Principal Commissioner, instead of the statutorily competent higher authority, was treated as a jurisdictional defect going to the root of the notice. The reassessment notice was therefore held invalid in law, and the consequential reassessment could not survive. The merits of the additions were not examined.

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Issues: Whether the reassessment notice and consequential reassessment were valid when prior approval for issue of notice beyond three years was granted by the Principal Commissioner instead of the authority prescribed under section 151 of the Income-tax Act, 1961.

Analysis: The notice under section 148 was issued beyond three years from the end of the relevant assessment year, attracting the higher sanction contemplated by section 151. The record showed that approval was granted by the Principal Commissioner of Income Tax, whereas the statute required approval by the specified higher authority. The defect was treated as one going to the root of jurisdiction and not as a curable irregularity. On that basis, the reassessment notice was held to be bad in law and the consequential reassessment could not survive. The merits of the additions were therefore not examined.

Conclusion: The reassessment was invalid for want of competent approval under section 151, and the assessee succeeded on the jurisdictional challenge.

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