Reassessment notice invalid where sanction came from the wrong authority after the three-year limitation period, rendering reopening void.

A reassessment notice issued under section 148 after more than three years from the end of the relevant assessment year required sanction from the competent authority under the extended limitation regime. The recorded approval was granted by the Principal Commissioner of Income Tax, who was not the competent authority for that purpose. Because the sanction was defective at the root of the reopening, the notice and all consequential reassessment were treated as invalid and void ab initio, in favour of the assessee.

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Issues: Whether notice issued under section 148 was invalid for want of approval from the competent authority, where the reassessment was initiated after more than three years from the end of the relevant assessment year.

Analysis: The notice under section 148 was issued for assessment year 2017-18 after the expiry of three years from the end of the relevant assessment year. In such a case, approval had to be obtained from the authority specified for the extended limitation regime. The recorded approval was from the Principal Commissioner of Income Tax, who was not the competent authority for such sanction. The defect went to the root of the reopening and rendered the reassessment notice and all consequential invalid.

Conclusion: The notice under section 148 was held invalid and the reassessment action was void ab initio, in favour of the assessee.

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