Reassessment Quashed for Wrong Sanction Under Section 151

Blackstone Overseas Pvt. Ltd. Vs ITO (ITAT Kolkata)

Reassessment Quashed on Technical Lapses: Wrong Sanction u/s 151 & In adequate Time in s.148A(b)/148 Notices Vitiate Entire Proceedings

The Kolkata Bench of the ITAT, in M/s Blackstone Overseas Pvt. Ltd. vs. ITO (ITA Nos. 2026 & 2027/KOL/2025, AYs 2016-17 & 2018-19, order dated 18-Dec-2025), quashed the reassessment proceedings for both assessment years, holding that the mandatory statutory safeguards under sections 151, 148A(b), and 148 were not complied with, rendering the reopening bad in law.

For AY 2018-19, the Tribunal noted that the notice u/s 148 was issued on 07-04-2022, i.e. beyond three years from the end of the relevant AY, and therefore, as per s.151(ii), approval was required from the Principal Chief Commissioner of Income Tax (PCCIT). However, the sanction had been obtained only from the PCIT, which was held to be incompetent authority under the law then in force. Relying on binding precedents of the Bombay High Court in Agnello Oswin Dias and Vodafone Idea Ltd., as well as ITAT decisions in Hareshkumar Dungarmal Jain and Davos International Fund, the Tribunal held that invalid sanction strikes at the root of jurisdiction, making the notice u/s 148 and the consequent assessment a nullity.

For AY 2016-17, the Tribunal found that the procedural timelines were blatantly violated. The assessee was granted less than the minimum statutory period of seven days to respond to the notice u/s 148A(b), and thereafter, the notice u/s 148 dated 03-05-2023 directed filing of return within 30 days, instead of the mandatory three months prescribed under the Act. Following the Karnataka High Court ruling in Panjos Builders (P.) Ltd. and the coordinate bench decision in Piyush Kumar Sarda, the Tribunal held that non-grant of minimum statutory time vitiates the notice itself, and all consequential proceedings must fail.

Accordingly, the ITAT quashed the reassessment notices, orders u/s 148A(d), and the assessments framed, and allowed both appeals of the assessee in full, reiterating that jurisdictional defects and violation of mandatory timelines cannot be cured.

FULL TEXT OF THE ORDER OF ITAT KOLKATA