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The High Court examined the validity of reassessment notices issued u/s 148 of the Income Tax Act, considering the sanction requirement u/s 151 and the impact of the Taxation and Other Laws (Relaxation & Amendment of Certain Provisions) Act, 2020 (TOLA). The key points are: TOLA was a remedial measure to enable authorities to take action within extended timelines during the nationwide lockdown, but it did not alter the distribution of powers or hierarchy u/s 151. The authority competent to grant approval for reassessment depends on the time elapsed since the end of the relevant assessment year, as prescribed in Section 151. TOLA merely extended the period for initiating reassessment but did not amend the approval structure u/s 151. If reassessment was proposed after four years from the end of the assessment year, approval should have been granted by the Principal Chief Commissioner/Chief Commissioner, not the Joint Commissioner. The use of "sanction" in TOLA does not impact this analysis as the Income Tax Act does not prescribe a time limit for granting sanction. Consequently, the reassessment notices based on sanction from the Joint Commissioner were quashed as invalid.
The High Court examined the validity of reassessment notices issued u/s 148 of the Income Tax Act, considering the sanction requirement u/s 151 and the impact of the Taxation and Other Laws (Relaxation & Amendment of Certain Provisions) Act, 2020 (TOLA). The key points are: TOLA was a remedial measure to enable authorities to take action within extended timelines during the nationwide lockdown, but it did not alter the distribution of powers or hierarchy u/s 151. The authority competent to grant approval for reassessment depends on the time elapsed since the end of the relevant assessment year, as prescribed in Section 151. TOLA merely extended the period for initiating reassessment but did not amend the approval structure u/s 151. If reassessment was proposed after four years from the end of the assessment year, approval should have been granted by the Principal Chief Commissioner/Chief Commissioner, not the Joint Commissioner. The use of "sanction" in TOLA does not impact this analysis as the Income Tax Act does not prescribe a time limit for granting sanction. Consequently, the reassessment notices based on sanction from the Joint Commissioner were quashed as invalid.
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