Reassessment sanction must come from the correct authority when section 148 notice is issued after three years.

Reassessment under the Income-tax Act requires prior sanction from the specified authority under section 151 when notice under section 148 is issued after more than three years from the end of the relevant assessment year. For assessment year 2018-19, the notice dated 09.04.2022 needed approval from the Principal Chief Commissioner or Principal Director General, or failing that, the Chief Commissioner or Director General. Approval obtained only from the Principal Commissioner was not valid for that time frame. The defect was jurisdictional and was not cured by the later reassessment procedure under sections 147, 148, 148A, 149 and 144B.

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Issues: Whether the reassessment notice issued under section 148 and the consequent assessment were invalid for want of approval from the correct specified authority under section 151 of the Income-tax Act, 1961.

Analysis: The reassessment was initiated for assessment year 2018-19, and the notice under section 148 was issued on 09.04.2022, i.e. after more than three years from the end of the relevant assessment year. For such cases, section 151(ii) of the Income-tax Act, 1961 required prior approval of the Principal Chief Commissioner or Principal Director General, or where not available, the Chief Commissioner or Director General. The approval in the present case had been obtained only from the Principal Commissioner of Income Tax, who was not the prescribed authority for that time frame. The subsequent procedural framework under sections 147, 148, 148A and 149 did not cure this defect, and the assessment framed under section 147 read with section 144B remained dependent on valid assumption of jurisdiction.

Conclusion: The notice under section 148 and the reassessment order were vitiated for lack of valid sanction under section 151(ii), and the assessment was quashed in favour of the assessee.

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