2026 (1) TMI 1185 - AT - Income Tax

Validity of reassessment proceedings challenged where notice lacked sanction from the statutory specified authority, resulting in quashing of assessment.

Reassessment proceedings were contested on the ground that the notice for reopening was issued without sanction from the statutory specified authority ... Validity of reassessment proceedings - issuing of notice u/s 148 not being sanctioned by the Specified Authority, as enshrined in section 151 - approval from the Pr. CIT-17, Mumbai but not from the Pr. CCIT - HELD THAT:- We observe that in this case, admittedly, the case of the Assessee was reopened u/s 147 of the Act, after elapsing of three years from the end of the relevant assessment year and by issuing notice dated 31.07.2022 taking approval from the Pr. CIT-17, Mumbai but not from the Pr. CCIT as mandated in section 151 and thus violated the statutory provisions enshrined in section 151 which prescribes Specified authority for granting sanction for reopening of assessment proceedings and/ or issuing notice u/s 148 of the Act. Thus, notice dated 31.07.2022 and the assessment order dated 18.05.2023 u/s 147 r.w.s. 144B of the Act passed in pursuance to the aforesaid notice, are liable to be quashed. Appeal filed by the Assessee is allowed. Issues: Whether notice issued under section 148 of the Income-tax Act, 1961, without sanction by the Specified Authority as required by section 151 of the Income-tax Act, 1961, is valid, and whether the consequential assessment order passed under section 147 read with section 144B is maintainable.Analysis: The notice for reopening was issued after the three-year period and approval was recorded from the Principal Commissioner of Income Tax (Pr. CIT-17, Mumbai) but not from the Principal Chief Commissioner of Income Tax (Pr. CCIT), who is the Specified Authority mandated by section 151 of the Income-tax Act, 1961, for sanction in the circumstances of this case. The question as to validity of the notice under section 148 arises from the orders passed by the authorities below and goes to the root of the matter; the Tribunal has jurisdiction to examine such a question of law arising from the facts found below. The statutory requirement in section 151 for sanction by the Specified Authority was not complied with in the issuance of the notice dated 31.07.2022, and the subsequent assessment order dated 18.05.2023 under section 147 r/w section 144B proceeded on that invalid notice.Conclusion: The notice issued under section 148 without sanction under section 151 is invalid; the assessment order dated 18.05.2023 passed under section 147 read with section 144B is quashed, and the appeal is allowed in favour of the Assessee.