Statutory approval for delayed reassessment was invalid where granted by an authority not specified under Section 151(ii).

For reassessment notices issued after three years from the end of the relevant assessment year, Section 151(ii), as applicable at the time, required prior approval from the Principal Chief Commissioner, Principal Director General, Chief Commissioner or Director General. Approval by a Principal Commissioner did not meet that statutory requirement. The proviso effective from 1 April 2023, allowing exclusion of time granted under Section 148A(b), did not operate retrospectively. Consequently, the Section 148 notice and resulting reassessment lacked valid jurisdiction and were quashed.

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Issues: Whether reassessment for AY 2018-19 was validly initiated where notice under Section 148 was issued after expiry of three years with approval of the Principal Commissioner instead of the authority specified under Section 151(ii).

Analysis: For a notice issued on 07.04.2022 for AY 2018-19, more than three years had elapsed from the end of the relevant assessment year. Section 151(ii), as then applicable, required prior approval of the Principal Chief Commissioner, Principal Director General, Chief Commissioner or Director General. Approval obtained from the Principal Commissioner was therefore not approval by the specified authority. The proviso introduced to Section 151 with effect from 01.04.2023, concerning exclusion of time allowed under Section 148A(b), could not be applied retrospectively.

Conclusion: The notice under Section 148 and consequential reassessment lacked valid jurisdiction and the reassessment was quashed, in favour of the assessee.

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