Reassessment approval by the wrong authority vitiates reopening when notice is issued after three years

Reassessment under sections 148 and 148A(d) is jurisdictionally defective if the prior approval under section 151 is granted by an ineligible authority for the relevant time period. Where more than three years have elapsed from the end of the assessment year, approval must come from the higher specified authority under section 151(ii)(b); approval by the Joint Commissioner does not satisfy that requirement. Non-compliance with the prescribed approval mechanism invalidates the reopening, and the notice under section 148 together with the section 148A(d) order cannot stand.

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Issues: Whether the reassessment notice issued under section 148 of the Income-tax Act, 1961 and the consequential order under section 148A(d) were valid where the approval was granted by the Joint Commissioner despite more than three years having elapsed from the end of the relevant assessment year.

Analysis: The reassessment regime under section 151 requires the specified authority to accord prior approval before an order under section 148A(d) is passed and before a notice under section 148 is issued. For notices issued after the expiry of three years from the end of the relevant assessment year, the competent authority is the higher specified authority contemplated by section 151(ii)(b). Since the notice in the present case was sanctioned by the Joint Commissioner, the approval did not satisfy the statutory requirement governing the relevant time period. Non-compliance with the prescribed approval mechanism goes to jurisdiction and vitiates the reopening.

Conclusion: The reassessment notice and the order under section 148A(d) were invalid and were rightly quashed, with the result that the reassessment proceedings could not survive.

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