Toyota Boshoku Corporation Vs ACIT (ITAT Delhi)
Wrong Authority’s Sanction Is Jurisdictional Suicide: PCIT Approval Not Enough Beyond 3 Years: Reassessment Set Aside for AYs 2016-17 & 2017-18
Delhi ITAT ‘D’ Bench in Toyota Boshoku Corporation vs ACIT, Circle-3(1)(1), New Delhi (ITA Nos.2462 & 2463/Del/2024, AYs 2016-17 & 2017-18, order dated 24-12-2025) quashed the entire reassessment proceedings, holding that approval for issuing notice u/s 148/148A(d) was obtained from an incompetent authority, striking at the very root of jurisdiction.
The first notice u/s 148 was issued on 30-06-2021, i.e. beyond three years from the end of the relevant AYs. Under the amended section 151 (post-FA 2021), sanction in such cases must come from the Principal Chief Commissioner / Principal Director General, and not from the PCIT. Admittedly, in the present case, approval was taken only from the PCIT, rendering the initiation invalid.
ITAT admitted the assessee’s additional legal ground and, relying extensively on binding precedents including Communist Party of India (Marxist) (Del HC), Twylight Infrastructure (Del HC), Abhinav Jindal (HUF) (Del HC), Siemens Financial Services (Bom HC) and Ramachandran Shivan (Mad HC), held that TOLA extensions do not alter the hierarchy of approving authorities under section 151. The “specified authority” depends solely on time elapsed, not on extended limitation.
Accordingly, ITAT held that the order u/s 148A(d), notice u/s 148 and the consequential draft/ final assessment orders were void ab initio, and quashed the reassessment for both years. All other grounds were rendered academic and left open.
Sanction u/s 151 is not a technicality. For notices issued after three years, PCIT approval is fatal—only PCCIT/PDG can confer jurisdiction. Wrong sanction = dead reassessment, irrespective of merits or quantum involved
FULL TEXT OF THE ORDER OF ITAT DELHI
