Mandeep Kaur Vs ITO (ITAT Chandigarh)
Introduction
The Income Tax Appellate Tribunal (ITAT), in the case of Ms. Mandeep Kaur vs. ITO, has delivered a significant ruling reinforcing the principle that jurisdictional conditions under reassessment provisions are mandatory and cannot be diluted by administrative instructions. The Tribunal quashed reassessment proceedings initiated under Section 148 due to lack of approval from the statutorily prescribed authority, thereby providing important clarity on post-Finance Act 2021 reassessment procedures.
This ruling assumes critical importance, particularly in reassessment cases initiated beyond three years from the end of the relevant assessment year, where statutory safeguards become more stringent.
Brief Facts of the Case
- Assessment Year: 2016–17
- Original Assessment: Completed and accepted in 2018
- Reopening Notice Issued: July 2022
- Time Gap: More than three years from the end of the relevant AY
The Assessing Officer (AO) issued a notice under Section 148 seeking to reopen the assessment. Since the reopening was beyond three years, Section 151(ii) mandated prior approval from the Principal Chief Commissioner of Income Tax (Pr. CCIT).
However, instead of obtaining sanction from the Pr. CCIT, the AO secured approval from the Principal Commissioner of Income Tax (Pr. CIT), Rohtak.
The assessee challenged the very jurisdiction of the AO, arguing that the reassessment notice was invalid due to lack of approval from the correct statutory authority.
Core Legal Issue
Whether a reassessment notice issued beyond three years is valid if approval is obtained from the Pr. CIT instead of the Pr. CCIT, as required under Section 151(ii)?
Tribunal’s Analysis and Findings
1. Statutory Compliance Is Mandatory
The Tribunal emphasized that sanction from the specified authority is not a procedural formality but a jurisdictional precondition. Failure to comply strictly with Section 151 renders the reassessment proceedings void ab initio.
2. Statute Overrides CBDT Instructions
The Revenue relied on CBDT instructions to justify the approval obtained from the Pr. CIT. The Tribunal categorically rejected this argument, holding that:
Administrative instructions cannot override express statutory provisions.
Where the statute mandates approval by a particular authority, deviation from such requirement is fatal to jurisdiction.
3. Reliance on Supreme Court Precedent
The Tribunal relied on the Supreme Court judgment in Union of India vs. Rajeev Bansal, wherein it was clearly held that:
For reassessment notices issued beyond three years, the Pr. CCIT alone is the specified authority under Section 151(ii).
Thus, sanction by any lower authority is legally unsustainable.
Final Decision
Since the approval for issuing notice under Section 148 was obtained from the wrong authority, the Tribunal held that:
