Invalid sanction for reassessment beyond three years vitiates reopening where approval is taken from the wrong authority.

For reopening an assessment beyond three years from the end of the relevant assessment year, sanction under section 151 had to be obtained from the Principal Chief Commissioner of Income Tax. Approval instead taken from the Principal Commissioner of Income Tax was treated as sanction by the wrong authority, creating a jurisdictional defect that went to the root of the reassessment. The reassessment for Assessment Year 2017-18 was therefore unsustainable and was quashed for want of valid approval from the competent authority.

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Issues: Whether the reassessment proceedings were valid where, for reopening beyond three years from the end of the relevant assessment year, approval under section 151 of the Income-tax Act, 1961 was obtained from the Principal Commissioner of Income Tax instead of the Principal Chief Commissioner of Income Tax.

Analysis: The reassessment related to Assessment Year 2017-18 and was initiated after the expiry of three years from the end of the relevant assessment year. In that situation, the statutorily prescribed sanctioning authority under section 151 of the Income-tax Act, 1961 was the Principal Chief Commissioner of Income Tax. Since the approval was obtained from the Principal Commissioner of Income Tax, the sanction was from a wrong authority and the defect went to the root of the reopening. The reassessment was therefore held to be unsustainable, following the binding jurisdictional precedent relied upon in the order.

Conclusion: The reassessment proceedings were invalid and stood quashed for want of valid sanction by the competent authority.

Final Conclusion: The appeal succeeded and the reassessment was annulled on the jurisdictional defect in sanction under the reopening provisions.

Ratio Decidendi: Where reopening of assessment beyond the prescribed period requires sanction from a specified authority, approval obtained from a different authority is a jurisdictional defect that vitiates the reassessment proceedings.

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