Reassessment beyond three years fails without approval from the correct statutory authority under Section 151(ii), despite TOLA relaxation.

Reassessment beyond three years from the end of the relevant assessment year required prior approval from the specified higher authority under Section 151(ii) of the Income-tax Act. Although the relaxation under TOLA extended the time for obtaining approval in the relevant category of cases up to 30 June 2021, it did not remove the requirement that sanction be granted by the correct statutory authority. Where approval was obtained from the Principal Commissioner instead of the authority mandated by Section 151(ii), the jurisdictional precondition for reopening was not met. The notice under Section 148 and the consequential reassessment proceedings were therefore invalid.

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Issues: Whether reassessment proceedings for an assessment year beyond three years from the end of the relevant assessment year could be validly initiated on the basis of approval granted by the Principal Commissioner instead of the authority specified under Section 151(ii) of the Income-tax Act, 1961, read with the relaxation under Section 3(1) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.

Analysis: The reopening related to Assessment Year 2016-17, for which the three-year period had expired before the impugned order under Section 148A(d) and notice under Section 148 were issued. The governing law required prior approval from the higher specified authority where more than three years had elapsed from the end of the relevant assessment year. The relaxation under TOLA extended the time for grant of approval only up to 30 June 2021 in the relevant class of cases, but it did not dispense with the statutory requirement that the correct specified authority must sanction the action. Since the approval was in fact obtained from the Principal Commissioner instead of the authority mandated by Section 151(ii), the jurisdictional precondition for valid reassessment was not satisfied.

Conclusion: The reassessment notice and the consequential proceedings were invalid for want of approval from the specified authority under Section 151(ii), and the assessee succeeded.

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