Reassessment sanction defect: reopening beyond three years failed where approval came from the wrong authority.

Reassessment notices issued after three years from the end of the relevant assessment years required prior sanction from the Principal Chief Commissioner of Income Tax under section 151(ii); approval by the Principal Commissioner was insufficient. Because the section 148 notices and section 148A(d) orders were issued without the prescribed higher-authority approval, the reopening suffered from a jurisdictional defect. The reassessment initiation was therefore invalid and void ab initio, and the Revenue's challenge failed.

---

---

Issues: Whether reassessment notices issued beyond three years from the end of the relevant assessment years were invalid for want of approval from the Principal Chief Commissioner of Income Tax under section 151(ii) of the Income-tax Act, 1961, and whether the reassessment proceedings were void ab initio.

Analysis: The notices under section 148 and the orders under section 148A(d) were issued after the expiry of three years from the end of the relevant assessment years. In such circumstances, the mandatory sanction contemplated by section 151(ii) had to be obtained from the specified higher authority. Since approval had been granted by the Principal Commissioner of Income Tax instead of the Principal Chief Commissioner of Income Tax, the reassessment initiation suffered from a jurisdictional defect. The jurisdictional High Court decisions relied upon were followed, holding that non-compliance with the prescribed sanction requirement invalidates the reopening.

Conclusion: The reassessment proceedings were invalid and void ab initio, and the Revenue's challenge failed.

---