Reassessment notice invalid where sanction under section 151 was obtained from the wrong authority, voiding reopening.

A reassessment notice issued after three years from the end of the relevant assessment year must have prior sanction from the authority prescribed under section 151. Here, the notice under section 148 was approved by the Principal Commissioner of Income Tax instead of the required higher authority, creating a jurisdictional defect. The reopening was therefore treated as invalid and the reassessment proceedings were void ab initio. As the notice failed on this threshold ground, the merits of the addition were not examined.

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Issues: Whether reassessment notice issued under section 148 was valid when approval was obtained from the Principal Commissioner of Income Tax instead of the authority required under section 151 for a notice issued after three years from the end of the relevant assessment year.

Analysis: The appeal concerned reassessment for assessment year 2016-17 through notice dated 24.08.2022. The notice itself showed prior approval of the Principal Commissioner of Income Tax. The applicable approval requirement, as noted in the order, was that prior sanction had to be obtained from the higher authority prescribed under section 151 where more than three years had elapsed from the end of the relevant assessment year. Since the notice was issued with approval of the Principal Commissioner rather than the prescribed authority, the reopening was held to suffer from a jurisdictional defect. Once the reassessment notice failed on this legal ground, the merits of the addition did not survive for adjudication.

Conclusion: The reassessment notice was held invalid and the consequent proceedings were treated as void ab initio, in favour of the assessee.

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