Reassessment approval requirement under section 151(2) invalidates notice where sanction came from the wrong authority.

Reassessment notices issued under section 148 beyond three years from the end of the relevant assessment year require prior approval from the Principal Chief Commissioner or Chief Commissioner of Income-tax under section 151(2). Where approval is instead obtained from the Principal Commissioner of Income-tax, the statutory precondition is not met and the notice suffers from a jurisdictional defect. Applying the Supreme Court ruling in Rajiv Bansal to the post-amendment reassessment regime, the text notes that such defective approval renders the notice invalid and the reassessment framed pursuant to it void ab initio.

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Issues: Whether notice issued under section 148 of the Income-tax Act, 1961 for reopening assessment for assessment year 2016-17 was valid when prior approval was obtained from the Principal Commissioner of Income-tax instead of the Principal Chief Commissioner or Chief Commissioner of Income-tax, and whether the reassessment made pursuant to such notice could survive.

Analysis: The challenge went to the jurisdiction of the reassessment proceedings. The notice under section 148 was issued on 25.07.2022 for assessment year 2016-17, i.e. after more than three years from the end of the relevant assessment year. In such a case, section 151(2) required prior approval from the Principal Chief Commissioner or Chief Commissioner of Income-tax. The approval in fact obtained was from the Principal Commissioner of Income-tax, which did not satisfy the statutory precondition. The decision of the Supreme Court in Rajiv Bansal was treated as governing the applicable approval requirement under the new reassessment regime, and the reassessment was therefore held to suffer from a jurisdictional infirmity.

Conclusion: The notice under section 148 was held invalid and the reassessment made pursuant to it was quashed as void ab initio.

Ratio Decidendi: For reassessment notices issued beyond three years from the end of the relevant assessment year, prior approval must be obtained from the authority specified in section 151(2); approval by a lower authority renders the notice and the consequent reassessment without jurisdiction.

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