2026 (4) TMI 51 - AT - Income Tax

Jurisdictional defect in reassessment sanction invalidates reopening when approval comes from an incompetent authority.

A jurisdictional objection to reopening can be raised at a later appellate stage even if it was not pressed before the first appellate authority, because ... Validity of reopening of assessment - Jurisdictional defect in reassessment sanction - Validity of reassessment proceedings - lack of sanction of the competent authority in terms of Section 151(ii) Jurisdictional objection to reopening entertained despite the assessee not pressing it before the first appellate authority - HELD THAT: - The Tribunal held that a defect of jurisdiction goes to the root of the matter and cannot be cured by consent, acquiescence or abandonment of a ground at an earlier stage. Where the authority lacks jurisdiction in law, any act done by it is void, and the assessee's earlier decision not to press the objection does not confer such jurisdiction. Since the challenge to the notice under section 148 was a pure jurisdictional issue capable of being decided on the existing record, the objection was entertainable in the cross objection. [Paras 9, 10, 12, 13] The departmental objection to the maintainability of the jurisdictional ground was rejected. Specified authority under section 151 - Reassessment beyond three years - valid sanction accorded for reopening - approval by the Principal Commissioner v/s authority prescribed under section 151(ii) - HELD THAT: - The Tribunal found that for Assessment Year 2016-17, the three-year period from the end of the assessment year had expired long before the order under section 148A(d) and the notice under section 148 were issued on 30.07.2022. Under section 151(ii), once more than three years have elapsed, the competent sanctioning authority is the Principal Chief Commissioner or Chief Commissioner, and not the Principal Commissioner. Following the binding decision of the jurisdictional High Court in Ramesh Bachulal Mehta [2025 (8) TMI 1322 - BOMBAY HIGH COURT] which had applied Union of India v. Rajeev Bansal [2024 (10) TMI 264 - Supreme Court (LB)] Tribunal held that sanction by an authority specified under section 151(i) could not sustain action taken after that stage had passed. The Tribunal further held that, as a subordinate forum, it was bound by the jurisdictional High Court and could not prefer a contrary view of a non-jurisdictional High Court. Consequently, non-compliance with section 151(ii) vitiated the assumption of jurisdiction and rendered the notice under section 148 and all consequential proceedings void. [Paras 13, 14, 15, 16] The assessment was quashed as invalid for want of sanction from the competent authority under section 151(ii). Final Conclusion: The Tribunal allowed the cross objection and quashed the reassessment for want of approval from the competent authority under section 151(ii). In consequence, the revenue's appeal on the deleted additions was dismissed as infructuous, with those issues kept open. Issues: (i) Whether a jurisdictional objection to reopening could be entertained despite the assessee not pressing it before the first appellate authority; (ii) whether the reassessment proceedings were invalid for want of approval from the correct specified authority under section 151(ii) of the Income-tax Act, 1961.Issue (i): Whether a jurisdictional objection to reopening could be entertained despite the assessee not pressing it before the first appellate authority.Analysis: A defect going to jurisdiction strikes at the root of the proceedings and cannot be cured by consent, waiver, acquiescence, or abandonment of a ground before an earlier appellate authority. Where the objection concerns the very authority to initiate reassessment, it remains open to be raised at a later appellate stage on the basis of the existing record.Conclusion: The jurisdictional objection was rightly entertained and was not barred by the earlier non-pressing of the ground.Issue (ii): Whether the reassessment proceedings were invalid for want of approval from the correct specified authority under section 151(ii) of the Income-tax Act, 1961.Analysis: For the relevant assessment year, the order under section 148A(d) and the consequential notice under section 148 were issued after the expiry of three years from the end of the assessment year. In such a case, the statute required approval of the higher specified authority under section 151(ii), and approval by the Principal Commissioner was insufficient. Since valid sanction from the prescribed authority is a condition precedent for assumption of jurisdiction to reopen, non-compliance vitiates the proceedings.Conclusion: The reassessment was invalid and the notice and consequential proceedings were void ab initio.Final Conclusion: The jurisdictional challenge succeeded, the reassessment proceedings were quashed, and the revenue's appeal ceased to survive on merits.Ratio Decidendi: A reopening of assessment is void where the sanction for issuance of notice is obtained from an authority not competent under the applicable clause of section 151, and such a jurisdictional defect may be raised notwithstanding an earlier waiver or non-pressing of the ground.