Invalid reassessment sanction under section 151(ii) rendered the section 148 notice void and the consequential assessment unsustainable.

A reassessment notice issued under section 148 after three years from the end of the assessment year required sanction under section 151(ii) from the Principal Chief Commissioner or Chief Commissioner. Approval obtained instead from the Principal Commissioner did not satisfy the statutory precondition, so the initiation of reassessment was without valid jurisdiction. The defective sanction went to the root of the notice, rendered the reassessment invalid, and the assessment framed pursuant to that notice could not be sustained. The notice and consequential assessment were quashed in favour of the assessee.

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Issues: Whether the notice issued under section 148 was valid when the reassessment was initiated after expiry of three years from the end of the assessment year but approval was obtained from the Principal Commissioner of Income Tax instead of the authority contemplated under section 151(ii).

Analysis: The reassessment notice was issued beyond three years from the end of the relevant assessment year, attracting section 151(ii). The authority competent to grant sanction in such a case is the Principal Chief Commissioner or Chief Commissioner, and not the Principal Commissioner. Since the notice was issued on the basis of approval from an incompetent authority, the statutory condition precedent for valid initiation of reassessment was not satisfied. The defect went to the root of jurisdiction and rendered the notice invalid. The assessment framed in consequence of such notice could not survive.

Conclusion: The notice under section 148 was invalid for want of proper sanction under section 151(ii), and the assessment order passed pursuant thereto was quashed in favour of the assessee.

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