Reopening of income-tax assessment approval must come from Principal Chief Commissioner or Principal Director General; appeal allowed

Reopening of assessment under the new regime requires prior approval from the competent authority: Principal Chief Commissioner or Principal Director General, or where absent, the Chief Commissioner or Director General. The approval recorded by a Principal Commissioner under the earlier regime was held defective, vitiating the approval for issuing the notice under the reopening procedure. Reliance on the Supreme Court precedent was applied. Consequence: the defective approval annulled the reopening step and the appeal was allowed.

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Issues: Whether the reassessment notice issued under Section 148 was valid where the prior approval under Section 151 was accorded by an authority other than the competent authority prescribed by the statute, thereby vitiating the reassessment proceedings for AY 2017-18.

Analysis: The question examined whether prior approval required by Section 151 for issuance of notice under Section 148 and for passing order under Section 148A(d) was obtained from the statutory competent authority. The record shows approval dated 23.07.2022 / 27.07.2022 from a Principal Commissioner (or Principal Commissioner of Income-tax-1) rather than from the Principal Chief Commissioner or Principal Director General or, where those posts are absent, the Chief Commissioner or Director General as required. The appellate decision relied on the legal principle that compliance with Section 148A and the requirement of prior approval under Section 151 cannot be dispensed with when orders under Section 148A(d) are passed or notices under Section 148 are issued beyond the prescribed period; a defective approval by an authority not competent under Section 151 vitiates the subsequent notice and reassessment proceedings.

Conclusion: The defective prior approval under Section 151 rendered the notice under Section 148 and the consequent reassessment proceedings invalid; appeal allowed and impugned assessment quashed in favour of the assessee.

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