Anil Gupta Pvt. Family Trust Vs ITO (Bombay High Court)
Specified authority for reassessment sanction – TOLA extension – Scope of Section 151 – Jurisdiction under Section 148
The Bombay High Court quashed reassessment proceedings for AY 2016–17 on the ground of lack of valid jurisdiction due to improper sanction under Section 151 of the Income Tax Act, 1961. The Assessing Officer had issued an order under Section 148A(d) and a notice under Section 148 on 30.07.2022 after obtaining approval from the Principal Commissioner of Income Tax. However, since more than three years had elapsed from the end of the relevant assessment year, approval was required from a higher authority under Section 151(ii), namely the Principal Chief Commissioner or equivalent. The Court, relying on the Supreme Court ruling in Union of India v. Rajeev Bansal, held that obtaining sanction from an incorrect authority vitiates jurisdiction. It also clarified that TOLA extended timelines only up to 30.06.2021 and not beyond. Accordingly, the reassessment order, notice, and all consequential proceedings were held invalid and set aside.
Core Issue: The core issue involved whether reassessment proceedings initiated under Section 148 were valid when the mandatory prior approval was not obtained from the correct “specified authority” under Section 151, especially where more than three years had elapsed from the end of the relevant assessment year, and whether such defect is jurisdictional
