Statutory approval under section 151 is mandatory for reassessment; failure to obtain it vitiates the notice and proceedings.

Compliance with the statutory approval requirement under section 151 is a jurisdictional condition precedent to reassessment under sections 148 and 148A(d). Where more than three years had elapsed from the end of the relevant assessment year, approval had to be obtained from the competent higher specified authority before issuance of notice under section 148. As that approval was not obtained, even though sanction for the section 148A(d) order was taken from the Principal Commissioner, the reassessment notice and all consequent proceedings were invalid and liable to be quashed. The reassessment was therefore annulled on jurisdictional grounds, and the Revenue's merits grounds became infructuous.

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Issues: (i) Whether the notice issued under section 148 and the reassessment proceedings were valid when approval from the specified authority under section 151 was not obtained in accordance with the statutory requirement.

Analysis: The substituted reassessment scheme requires prior approval of the specified authority at the stage of section 148A(d) and before issuance of notice under section 148. Where more than three years have elapsed from the end of the relevant assessment year, the competent authority is the higher authority specified in section 151. On the facts, the approval for the order under section 148A(d) was obtained from the Principal Commissioner, though the extended limitation period had already expired and the statutory approval required by section 151 was not obtained from the competent higher authority. The reassessment notice was therefore issued contrary to the mandatory jurisdictional requirement.

Conclusion: The notice under section 148 and the reassessment proceedings were invalid and liable to be quashed. This issue is decided in favour of the assessee.

Final Conclusion: The reassessment was annulled on jurisdictional grounds, rendering the Revenue's merits grounds infructuous and leaving the assessee's other cross-objection grounds academic.

Ratio Decidendi: Compliance with the statutory approval requirement under section 151 is a jurisdictional condition precedent for valid initiation of reassessment under sections 148 and 148A(d); failure to obtain approval from the competent specified authority vitiates the notice and all consequential proceedings.

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