Reopening Notice Under Sanction of Principal Commissioner Instead of Specified Joint Commissioner Under Section 151(2) Is Void

Reopening Notice Under Sanction of Principal Commissioner Instead of Specified Joint Commissioner Under Section 151(2) Is Void

• Issuance of Notice: A reopening notice under Section 148 for AY 2015-16 was issued to the assessee on March 30, 2021.
• TOLA Applicability: By operation of Section 3 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA), the notice was legally deemed to be issued within the 4-year time limit from the end of the relevant assessment year.
• Sanction Authority Obtained: The Assessing Officer obtained statutory approval/sanction under Section 151 from the Principal Commissioner of Income Tax (PCIT) prior to issuing the notice.
• Statutory Defect Alleged: The assessee challenged the reopening before the High Court, contending that for notices issued within 4 years, Section 151(2) specifically mandates sanction from the Joint Commissioner/Additional Commissioner, making the PCIT’s approval improper and jurisdictional authority lacking.
• High Court Ruling: The High Court held the reassessment notice to be without jurisdiction and quashed it because sanction was obtained from the wrong authority under the statutory scheme.
• SLP Filed: The Revenue filed a Special Leave Petition (SLP) before the Supreme Court challenging the High Court’s judgment.

• Decided in favor of the assessee.
• The Supreme Court found no grounds for interference with the High Court’s ruling and dismissed the Revenue’s SLP.
• Reopening notices issued within four years (including those extended via TOLA) require strict compliance with Section 151(2), meaning approval must come specifically from the Joint Commissioner, not a higher authority like the Principal Commissioner.

• Strict Construction of Statutory Approval: Sanction for issuing a reassessment notice under Section 151 must be obtained strictly from the designated statutory authority specified for that time frame; approval by a higher authority cannot cure the defect.
• Four-Year TOLA Threshold: Under the old reassessment regime, if TOLA deems a notice for AY 2015-16 issued on March 30, 2021, to be within the 4-year window, Section 151(2) governs, making the Joint Commissioner/Additional Commissioner the sole competent sanctioning authority.
• Jurisdictional Fatality: Issuing a Section 148 notice under the approval of an improper sanctioning officer invalidates the notice and renders the entire reassessment proceedings void ab initio.