Reassessment sanction defect invalidates notice when approval under section 151(ii) is missing for a notice issued after three years.

A reassessment notice issued beyond three years from the end of the relevant assessment year required approval from the Principal Chief Commissioner of Income Tax or equivalent authority under section 151(ii). Approval obtained only from the Principal Commissioner was insufficient, so the sanction did not meet the statutory threshold. Separate valid sanction was also necessary for issuance of the section 148 notice and the section 148A(d) order, and approval at the earlier section 148A(b) stage could not cure the defect. The jurisdictional lapse vitiated the reassessment process, and the notice and consequential proceedings were held liable to be quashed in favour of the assessee.

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Issues: Whether the reassessment notice issued under section 148 beyond three years from the end of the relevant assessment year was invalid for want of approval from the Principal Chief Commissioner of Income Tax under section 151(ii), and whether the consequential reassessment proceedings were liable to be quashed.

Analysis: The notice under section 148 was issued on 13.04.2022 for Assessment Year 2018-19, which was beyond three years from the end of the relevant assessment year. In that situation, the prescribed sanctioning authority under section 151(ii) was the Principal Chief Commissioner of Income Tax or the equivalent higher authority. Approval having been obtained only from the Principal Commissioner of Income Tax, the sanction did not satisfy the statutory requirement. The reassessment could not be sustained on the basis of approval granted for the earlier stage under section 148A(b), because a separate and valid sanction was required for issuance of notice under section 148 and for the order under section 148A(d). The defect went to jurisdiction and vitiated the entire reassessment process.

Conclusion: The notice under section 148 was invalid and the reassessment proceedings were liable to be quashed, in favour of the assessee.

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