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 required for such notices. The issuing authority had obtained approval from a Principal CIT but not from the prescribed Specified Authority, thereby breaching the statutory sanction requirement for issuing reassessment notices. Because the statutory sanction prerequisite was not complied with, the notice and the resultant assessment were quashed and the taxpayers appeal succeeded.

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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.

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