Reassessment sanction requirement beyond three years was jurisdictional; approval by a lower authority made the notice invalid.

Reassessment initiated beyond three years from the end of the relevant assessment year required sanction from the higher authority prescribed under section 151. Approval granted only by the Principal Commissioner did not satisfy that jurisdictional condition, because the statute required approval from the Principal Chief Commissioner, Principal Director General, Chief Commissioner or Director General, as applicable. The defect went to the root of reassessment jurisdiction and was not a curable irregularity. The notice under section 148 and the consequential reassessment proceedings were therefore invalid and were quashed in favour of the assessee.

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Issues: Whether reassessment proceedings initiated beyond three years from the end of the relevant assessment year were invalid for want of approval from the competent authority under section 151 of the Income-tax Act, 1961, where approval had been granted only by the Principal Commissioner of Income Tax.

Analysis: The notice under section 148 was issued beyond three years from the end of the relevant assessment year, attracting the higher level of sanction prescribed under section 151. The statutory scheme required approval from the Principal Chief Commissioner, Principal Director General, Chief Commissioner or Director General, as applicable. Approval granted by an authority lower in rank did not satisfy the jurisdictional requirement. The defect was not a curable irregularity but went to the root of the reassessment jurisdiction, rendering the initiation invalid ab initio.

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

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