Reassessment safeguards and competent approval requirements under the Income-tax Act determined validity of the reopening proceedings.

Reassessment proceedings must comply with statutory safeguards of due notice and valid approval. For AY 2016-17, the record did not establish proper service of notice or a finding of due notice, so the matter was remanded to the CIT(A) for fresh adjudication after hearing. For AY 2017-18, the reassessment was initiated after three years from the end of the assessment year, triggering section 151 approval by the competent higher authority; approval by the Principal Commissioner was insufficient, creating a jurisdictional defect. The reassessment was therefore quashed.

---

---

Issues: (i) Whether the reassessment proceedings for AY 2016-17 were liable to be set aside for want of proper service of notice and opportunity of hearing; (ii) Whether the reassessment for AY 2017-18 was invalid for want of approval by the competent authority under section 151 of the Income-tax Act, 1961.

Issue (i): Whether the reassessment proceedings for AY 2016-17 were liable to be set aside for want of proper service of notice and opportunity of hearing.

Analysis: The impugned order recorded issuance of notices, but did not show the manner of service or a finding that the assessee had due notice. In the absence of such satisfaction, the assessee was entitled to an opportunity to contest the matter on merits.

Conclusion: The appeal was allowed for statistical purposes and the matter was remanded to the CIT(A) for fresh decision after due notice and hearing.

Issue (ii): Whether the reassessment for AY 2017-18 was invalid for want of approval by the competent authority under section 151 of the Income-tax Act, 1961.

Analysis: The order under section 148A(d) and the notice under section 148 were issued after three years from the end of the assessment year, attracting the approval requirement under section 151 of the new regime. The approval on record was granted by the Principal Commissioner, whereas the competent authority in the circumstances was the Principal Chief Commissioner or Principal Director General, or failing them, the Chief Commissioner or Director General. As such approval was not obtained, the reassessment suffered from a jurisdictional defect.

Conclusion: The appeal was allowed and the reassessment was quashed.

Final Conclusion: The first appeal was restored for fresh adjudication, while the second reassessment was invalidated for lack of valid statutory approval; thus, the assessee obtained relief on both issues, though in different forms.

Ratio Decidendi: Reassessment proceedings must comply with the statutory approval requirement under section 151 of the Income-tax Act, 1961, and absence of due service or valid approval renders the proceedings unsustainable.

---