Reassessment approval under section 151 must come from the correct authority when notice is issued beyond three years.

Reassessment notice issued beyond three years from the end of the relevant assessment year required prior approval of the higher specified authority under section 151(ii) of the Income-tax Act, 1961. Approval taken only from the Principal Commissioner was not the prescribed sanction for such reopening, so the defect went to the assumption of jurisdiction under section 148. The reassessment proceedings were therefore unsustainable and the reopening was held invalid.

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

Analysis: The reassessment notice was issued after more than three years from the end of the relevant assessment year, so the statutory scheme required prior approval from the higher specified authority contemplated by section 151(ii) of the Income-tax Act, 1961. The approval in the present case was instead obtained from the Principal Commissioner of Income Tax. On the facts, that authority was not the prescribed sanctioning authority for a reopening beyond three years. The defect went to the assumption of jurisdiction for issuing notice under section 148 and rendered the reassessment proceedings unsustainable.

Conclusion: The reopening was held invalid and the reassessment proceedings were quashed in favour of the assessee.

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