Reopening of income tax assessment blocked where sanction was granted by an incorrect authority despite TOLA time extension.

Validity of reopening an income-tax assessment focuses on temporal extension under temporary legislation and strict compliance with statutory sanctioning authority. The commentary explains that time extension provisions apply to the sanctioning requirement, allowing the notice to fall within four years; outcome: temporal limitation stood relaxed. Separately, the sanction requirement must be satisfied by the specifically designated authority, and where sanction was granted by an incompetent officer the notice is invalid; outcome: reopening quashed on that ground. The reasons recorded must allege failure to disclose any material fact and cannot be improved subsequently; outcome: lack of such allegation supports invalidation.

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Issues: (i) Whether the notice under section 148 dated March 31, 2021 is valid where sanction was granted by an authority other than the specified authority under section 151, having regard to the time-extension under TOLA; (ii) Whether the reasons recorded for initiating reassessment disclose failure by the assessee to "disclose fully and truly" material facts so as to permit reopening beyond four years under the proviso to section 147.

Issue (i): Validity of section 148 notice where sanction was granted by a Principal Commissioner instead of the Joint Commissioner, having regard to TOLA-based extension.

Analysis: The period when the notice was issued falls between March 20, 2020 and March 31, 2021 and is therefore governed by the time-extension granted by TOLA for sanction under section 151. Under the applicable (old) regime, the specified authority for sanction within four years from the end of the relevant assessment year is the Joint Commissioner. Where the statute prescribes a particular functionary to be satisfied before exercise of power, that satisfaction must be of the statutory functionary alone. The facts show sanction was recorded as given by a superior authority not identified as the specified authority under section 151(2).

Conclusion: The notice under section 148 is invalid for lack of sanction by the specified authority. Conclusion in favour of the Assessee.

Issue (ii): Sufficiency of reasons recorded to demonstrate failure to disclose fully and truly material facts permitting reopening beyond four years under proviso to section 147.

Analysis: When reopening is sought beyond four years, the reasons recorded must specifically indicate failure to disclose fully and truly all material facts necessary for assessment. The reasons provided do not specify what material facts were withheld or how the assessee failed to disclose them; they are general/allegational and do not identify tangible material relied upon. Reasons must be read as recorded and cannot be supplemented subsequently.

Conclusion: The reasons recorded are insufficient to justify reopening beyond four years. Conclusion in favour of the Assessee.

Final Conclusion: The impugned notice under section 148 dated March 31, 2021, the order disposing objections dated January 31, 2022, and the assessment order dated March 30, 2022 are quashed and set aside.

Ratio Decidendi: Where statutory sanction for issuance of a reassessment notice must be given by a specified authority, sanction by any other authority renders the notice invalid; additionally, reopening beyond four years requires recorded reasons showing failure to disclose fully and truly relevant material facts, and time-extensions under TOLA apply to the sanctioning timelines under section 151.

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