Validity of Section 148 notice depends on statutory sanction by the competent authority; lack of proper sanction renders the notice invalid.

Issue concerns validity of a post four year notice under section 148 where the statutory sanction under section 151(1) was granted by an officer not authorised to do so. The legal principle applied is that the statutory requirement for sanction by the specified competent authority is jurisdictional; absence of proper sanction defeats the Assessing Officer's assumption of jurisdiction under section 147. The defect is treated as a fundamental jurisdictional error, not a curable procedural irregularity, and consequently a notice issued without the required competent authority sanction is invalid and any consequent assessment is set aside.

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Issues: Whether the notice issued under section 148 of the Income-tax Act, 1961 after expiry of four years from the end of the relevant assessment year is valid when the sanction/approval under section 151(1) of the Income-tax Act, 1961 was granted by an officer (Joint Commissioner of Income Tax) who is not the competent authority specified in section 151(1).

Analysis: The assessment year under dispute is within the ambit of section 151(1) of the Income-tax Act, 1961 which prescribes that after the expiry of four years from the end of the relevant assessment year no notice under section 148 can be issued unless the Principal Chief Commissioner/Chief Commissioner or Principal Commissioner/Commissioner is satisfied with the reasons recorded by the Assessing Officer. The notice dated 30.03.2021 shows that approval was granted by the Joint Commissioner of Income Tax, who is not among the officers empowered by section 151(1) to grant such sanction. Lack of proper sanction therefore undermines the competency to issue the notice and the consequent assumption of jurisdiction under section 147 of the Income-tax Act, 1961. This defect is a fundamental jurisdictional error and not a curable or merely procedural irregularity. The submission that any extension under relief legislation would validate the sanction was not accepted on the facts.

Conclusion: The notice under section 148 of the Income-tax Act, 1961 issued without the proper sanction required by section 151(1) is invalid; the assessment order passed pursuant to that notice is quashed and the appeal is allowed in favour of the assessee.

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