Reassessment Notice Issued Without Sanction From Specified Authority Under Section 151 Is Invalid and Quashed

Reassessment Notice Issued Without Sanction From Specified Authority Under Section 151 Is Invalid and Quashed

• The matter pertains to Assessment Year 2015-16.
• The Assessing Officer issued a reopening notice under Section 148 against the assessee on March 28, 2021.
• The assessee filed a writ petition challenging the reopening notice and consequential reassessment order on the ground that the notice lacked valid sanction from the specified authority under Section 151.
• Sanction for issuing the notice was obtained from the Commissioner (Exemption).
• Under Section 151(2) of the pre-amended Act (prior to April 1, 2021), where four years had not elapsed from the end of the relevant assessment year, the sanctioning authority was the Joint Commissioner.
• Section 3(1) of TOLA relaxed the time limits for completion from March 20, 2020 to March 31, 2021.
• The Supreme Court clarified that under the old Section 151 regime, if the 4-year time limit fell between March 20, 2020 and March 31, 2021, the specified authority under Section 151(2) had time till March 31, 2021 to grant approval.
• The High Court held that since the notice was issued on March 28, 2021, it required the sanction of the Joint Commissioner, whereas sanction was erroneously obtained from the Commissioner (Exemption), rendering the notice invalid.
• The Revenue filed a Special Leave Petition (SLP) before the Supreme Court challenging the judgment.

• Incompetent Sanctioning Authority: Held that obtaining approval from the Commissioner (Exemption) instead of the Joint Commissioner violated the mandatory requirements of Section 151.
• Invalidity of Notice: Held that a Section 148 notice issued without sanction from the designated authority under the applicable regime is void ab initio.
• Dismissal of SLP: Noted that the Supreme Court had already dismissed the SLP against the relied-upon judgment, and accordingly declined to entertain the instant SLP.
• Final Ruling: The SLP filed by the Revenue was dismissed, confirming the quashing of the Section 148 notice in favor of the assessee [Paras 3 to 5].

• Strict Compliance with Sanctioning Hierarchy: Obtaining sanction from an authority other than the specific authority prescribed under Section 151 invalidates the entire reassessment proceeding.
• Higher Authority Sanction Does Not Cure Defect: Approval granted by a higher-ranking officer (e.g., Commissioner) when the law explicitly mandates approval from a lower specified authority (e.g., Joint Commissioner) cannot validate an illegal notice.
• Jurisdictional Pre-requisite: Statutory sanction under Section 151 is a mandatory condition precedent; failure to adhere strictly to the specified authority deprives the Assessing Officer of jurisdiction.