Jurisdictional approval defect invalidated reassessment where sanction came from the wrong income-tax authority.

Approval for reassessment under the Income-tax Act had to come from the Principal Chief Commissioner of Income Tax where that authority existed and had jurisdiction. Because a Principal Chief Commissioner for Madhya Pradesh and Chhattisgarh was notified, approval obtained instead from the Chief Commissioner was contrary to the statutory hierarchy and without jurisdiction. The reassessment notice and consequent assessment were therefore invalid, and the reassessment proceedings were held bad in law and void ab initio. The assessee succeeded on the additional ground.

---

---

Issues: Whether the reassessment notice and consequent assessment were invalid because approval under section 151(ii) of the Income-tax Act, 1961 was obtained from the Chief Commissioner of Income Tax instead of the Principal Chief Commissioner of Income Tax.

Analysis: The approval for issuance of notice under section 148 was required to be granted by the Principal Chief Commissioner of Income Tax where such authority existed and exercised jurisdiction over the relevant territory. The existence and notified jurisdiction of the Principal Chief Commissioner of Income Tax for Madhya Pradesh and Chhattisgarh, read with section 2(34A) and section 117 of the Income-tax Act, 1961 and the CBDT notification governing the hierarchy of income-tax authorities, meant that the Chief Commissioner could act only in the absence of the Principal Chief Commissioner. The approval granted by the Chief Commissioner was therefore contrary to the statutory scheme.

Conclusion: The approval was invalid, the reassessment proceedings were bad in law and void ab initio, and the assessee succeeded on the additional ground.

Ratio Decidendi: Where the statute requires sanction by a higher designated authority and that authority is available and vested with jurisdiction, approval by a subordinate authority is without jurisdiction and renders the reassessment proceedings invalid.

---