Reassessment approval defect under the amended regime rendered the notice jurisdictionally invalid and the additions were set aside.

Under the amended reassessment regime, a notice issued after 01.04.2021 and beyond three years from the end of the relevant assessment year required prior approval from the higher specified authority under clause (ii) of section 151. Approval obtained only from the Principal Commissioner did not satisfy that statutory requirement. The defect was treated as jurisdictional and went to the root of the reassessment. On that basis, the reassessment proceedings were held invalid and the additions made pursuant to them were set aside in favour of the assessee.

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Issues: Whether the reassessment notice and consequent assessment for A.Y. 2017-18 were vitiated for want of approval from the correct specified authority under the amended reassessment regime.

Analysis: The reassessment was initiated after 01.04.2021 and beyond three years from the end of the relevant assessment year. For such cases, the amended scheme required prior approval of the authority specified in clause (ii) of section 151. The approval actually obtained was from the Principal Commissioner of Income-tax, whereas the statutory mandate for a notice issued after the expiry of three years required approval of the higher authority prescribed by clause (ii). The defect went to the root of the reassessment jurisdiction and, following the binding legal position applied in the order, the reassessment could not be sustained.

Conclusion: The reassessment proceedings were invalid and the additions made pursuant to them were set aside in favour of the assessee.

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