SC Dismisses Revenue’s SLP; Reassessment Quashed Due to Invalid Sanction from Wrong Authority.

By | November 13, 2025
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SC Dismisses Revenue’s SLP; Reassessment Quashed Due to Invalid Sanction from Wrong Authority.

Issue

Whether a reassessment proceeding for an assessment year beyond three years is legally valid if the sanction for it was obtained from the Commissioner (under Section 151(i)) instead of the “specified authority” (Principal Chief Commissioner), as mandatorily required by Section 151(ii) of the Income-tax Act.

Facts

  • The case pertained to the Assessment Year 2019-20.
  • The Assessing Officer initiated reassessment proceedings, noting that the case fell under Section 149(1)(b) (i.e., beyond three years from the end of the relevant assessment year).
  • The AO proceeded after obtaining approval on April 27, 2023, from the Commissioner of Income Tax, which is the authority specified for cases within three years (Section 151(i)).
  • The law (Section 151(ii)) clearly mandates that for cases opened after three years, approval must be from the “specified authority” (i.e., the Principal Chief Commissioner or Chief Commissioner).
  • The High Court quashed the reassessment order and notice, holding that the Commissioner exercised a jurisdiction he never had. The approval was invalid.
  • The Revenue filed a Special Leave Petition (SLP) in the Supreme Court with a gross delay of 411 days.

 

Decision

  • The Supreme Court dismissed the Revenue’s Special Leave Petition.
  • The dismissal was on two grounds:
    1. The gross and unexplained delay of 411 days in filing the petition.
    2. On the merits of the case, as the court found no good ground to interfere with the High Court’s order.
  • This decision upholds the High Court’s judgment that the entire reassessment proceeding was void due to the lack of a valid sanction.

Key Takeaways

  • Approval Must Be From the Correct Authority: The new reassessment regime has a strict, time-based approval hierarchy. Failure to obtain approval from the correct authority is a fatal jurisdictional defect.
  • Time-Based Hierarchy:
    • Notice Within 3 Years: Approval from PCIT/Commissioner (Sec 151(i)).
    • Notice Beyond 3 Years: Approval only from the “specified authority” (PCCIT/CCIT) (Sec 151(ii)).
  • Wrong Sanction is Invalid: An approval from a Commissioner for a notice issued after three years is legally invalid and amounts to no approval at all.
  • Jurisdictional Defect: An assessment initiated with an invalid sanction is void ab initio (from the beginning) and cannot be sustained.
SUPREME COURT OF INDIA
Assistant Commissioner of Income-tax International Taxation
v.
LinkedIn Singapore Pte. Ltd.*
J.B. PARDIWALA and K.V. Viswanathan, JJ.
SLP (CIVIL) Diary No. 51427 of 2025†
OCTOBER  13, 2025
N Venkatraman, A.S.G., Ms. Madhulika Upadhyay, AOR, Ms. Mamta Rani, Sarthak Karol, Anmol Chandan and V.C. Bharathi, Advs. for the Petitioner.
ORDER
1. There is a gross delay of 411 days in filing the Special Leave Petition which has not been satisfactorily explained by the petitioner.
2. Even otherwise, we see no good ground to interfere with the impugned order passed by the High Court.
3. The Special Leave Petition is, therefore, dismissed on the ground of delay as well as merits.
4. Pending application(s), if any, stand disposed of.
Jeet Kamdar for the Petitioner. Subir Kumar and Abhinav Palsikar for the Respondent.
ORDER
1. The facts in this case are almost identical to the facts in Kartik Sureshchandra Gandhi v. Asstt. CIT (Bombay). In the case at hand also, the approval under Section 151 of the Income Tax Act, 1961 (“the Act”), copy whereof has been annexed to the affidavit-in-reply filed through one Sanjay V. Deshmukh currently holding the post of Commissioner of Income Tax, International Taxation and affirmed on 21st November 2023, in Box-9 for time limit for current proceedings covered under, the answer is, under Section 149(1)(b) of the Act – for more than 3 years, but not more than 10 years.
2. Mr. Kamdar states that in such a case, the approval should be granted by the Principal Chief Commissioner of Income Tax and the approving authority Mr. Vijay Shankar being only the Commissioner of Income Tax (“CIT”), the approval was not valid. Mr. Subir Kumar submitted that it is the system which automatically gives the answer for Box-9, because the assessment year is of 2019-2020 and the approval date is 27th April 2023.
3. Even if for a moment we accept what Mr. Subir Kumar states is correct or is possible, in such a case, the approving authority Mr. Vijay Shankar should have returned the approval for correcting the form or atleast made a remark in his own handwriting. We cannot even make out whether the order-sheet has been signed by the same Mr. Vijay Shankar, CIT, who has given the approval, because the approval form annexed to the petition is unsigned.
4. Mr. Subir Kumar gave to the Court a copy of an order-sheet dated 27th April 2023 signed by the Commissioner of Income Tax (International Taxation-3), Mumbai granting approval to the draft order under Section 148A(d) of the Act. When the approval has been granted only on 27th April 2023, the CIT should have realized that it is more than three years after the expiry of assessment year, which was 2019-2020. If some time has to be excluded as per the fifth proviso to Section 149 of the Act, that should have been mentioned in the order-sheet, otherwise it would only amount to exercising jurisdiction which he never had.
5. In the circumstances, we hereby quash and set aside the impugned order dated 27th April 2023 passed under Section 148A(d) of the Act and the impugned notice also dated 27th April 2023 issued under Section 148 of the Act.
6. Petition disposed.