Reassessment approval under Section 151(ii) invalidates notices authorised by an inferior authority after the prescribed three-year period.

Reassessment notices issued more than three years after the relevant assessment year require approval from the authority specified under Section 151(ii); approval by a Principal Commissioner is insufficient, and a later proviso cannot retrospectively alter the approval requirement by excluding the Section 148A(b) response period. The article states that the resulting reassessment was quashed. It further states that condonation of delay in filing a return removes the basis for denying Section 80P deduction, requiring fresh consideration of the claim. Interest earned by a co-operative society from investments with a co-operative bank is stated to qualify under Section 80P(2)(d), as the bank remains a co-operative society for that purpose.

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Issues: (i) Whether a reassessment notice issued after three years from the end of the relevant assessment year on approval of the Principal Commissioner, rather than the authority specified under Section 151(ii), was valid; (ii) Whether deduction under Section 80P, including deduction for interest earned from a co-operative bank, was available after condonation of delay in filing the return.

Issue (i): Whether a reassessment notice issued after three years from the end of the relevant assessment year on approval of the Principal Commissioner, rather than the authority specified under Section 151(ii), was valid.

Analysis: The notice under Section 148 and the order under Section 148A(d) were issued after expiry of three years from the end of the assessment year, with approval of the Principal Commissioner. Section 151(ii) required approval of the Principal Chief Commissioner, Principal Director General, Chief Commissioner, or Director General in such circumstances. The subsequently introduced proviso to Section 151 could not be applied retrospectively to exclude the period allowed for responding to the notice under Section 148A(b).

Conclusion: The reassessment notice and consequential reassessment were invalid and were quashed in favour of the assessee.

Issue (ii): Whether deduction under Section 80P, including deduction for interest earned from a co-operative bank, was available after condonation of delay in filing the return.

Analysis: The delay in filing the return had subsequently been condoned by the competent authority, removing the basis on which the deduction had been denied. Interest derived by a co-operative society from investments with a co-operative bank qualifies for deduction under Section 80P(2)(d), since such bank remains a co-operative society for that purpose.

Conclusion: The claim for deduction under Section 80P, including eligible interest from a co-operative bank, required fresh consideration in light of the condonation order, in favour of the assessee.

Final Conclusion: The reassessment for the earlier assessment year lacked valid jurisdiction, while the deduction claim for the later assessment year must be reconsidered consistently with the condonation of delay and the availability of deduction for eligible co-operative bank interest.

Ratio Decidendi: Where more than three years have elapsed from the end of the relevant assessment year, approval for reassessment must be obtained from the authority specifically designated under Section 151(ii); approval by an inferior authority invalidates the reassessment.

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