Invalid reassessment reopening without approval from the correct specified authority beyond three years

Reopening beyond three years from the end of the relevant assessment year required approval from the specified authority under section 151(ii). Approval granted by the Principal Commissioner, instead of the Principal Chief Commissioner or equivalent authority, was held invalid. On that basis, the notice under section 148, the section 148A(d) order, and the consequential reassessment proceedings were quashed, and the reassessment was annulled for want of valid sanction. The Tribunal treated the remaining grounds as academic because the defect in jurisdictional approval was outcome-determinative.

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Issues: Whether the notice issued under section 148, and the consequent reassessment proceedings, were invalid for want of approval by the competent specified authority under section 151 when the reopening was initiated beyond three years from the end of the relevant assessment year.

Analysis: The reopening notice and the order under section 148A(d) were issued after the expiry of three years from the end of the relevant assessment year. In such a case, the approval had to be obtained from the authority contemplated by section 151(ii), namely the Principal Chief Commissioner or the equivalent specified authority. The approval in the present case was granted by the Principal Commissioner, which was not the competent authority for a reopening beyond three years. The Tribunal followed binding jurisdictional precedents holding that such sanction is invalid and the notice and consequent proceedings cannot survive.

Conclusion: The notice under section 148 was held to be invalid and was quashed, and the reassessment proceedings and order passed thereafter were also set aside, in favour of the assessee.

Final Conclusion: The appeal succeeded and the reassessment was annulled on the ground of absence of valid sanction by the specified authority, rendering the remaining grounds academic.

Ratio Decidendi: Where reopening is initiated beyond three years from the end of the relevant assessment year, approval must be granted by the specified authority under section 151(ii), and sanction by a lower authority renders the notice and consequent reassessment invalid.

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