Reassessment beyond three years requires sanction from the prescribed senior authority; approval by an unauthorised officer invalidates subsequent proceedings.

For reassessment notices issued beyond three years but within ten years from the end of the relevant assessment year, sanction under Section 151 must be obtained from the prescribed senior authorities, including the Principal Chief Commissioner or equivalent authority. The text explains that approval by the Principal Commissioner in such a case does not satisfy the statutory requirement. Because the defect concerns the authority's jurisdiction, the approval is treated as invalid, with the related reassessment notice and proceedings consequently lacking jurisdiction and being void ab initio. The analysis therefore supports the assessee's position on the validity of the reassessment process.

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Issues: Whether notice for reassessment issued beyond three years from the end of the relevant assessment year was valid when sanction under Section 151 of the Income-tax Act, 1961 was granted by the Principal Commissioner of Income Tax instead of the authority prescribed for cases falling beyond three years.

Analysis: The reassessment notice under Section 148 of the Income-tax Act, 1961 for Assessment Year 2019-20 was issued on 12.04.2023, which fell beyond three years from the end of the relevant assessment year. The approval record itself stated that the case was covered by Section 149(1)(b) of the Income-tax Act, 1961, namely a case of more than three years but not more than ten years. For such cases, Section 151 of the Income-tax Act, 1961 required sanction from the Principal Chief Commissioner, Principal Director General, Chief Commissioner, or Director General. The sanction, however, was granted by the Principal Commissioner of Income Tax, who was not the prescribed sanctioning authority for that period category. The defect went to jurisdiction, rendering the approval inconsistent with Section 151 and invalid.

Conclusion: The sanction for issuance of notice under Section 148 of the Income-tax Act, 1961 was invalid; consequently, the reassessment notice and all subsequent proceedings, including the assessment framed pursuant thereto, were without jurisdiction and void ab initio. The issue is decided in favour of the assessee.

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