ITAT Sets Aside Reassessment Notices Issued u/s 148 for Lack of Proper Sanction Post Finance Act, 2021 [Read Order]

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) allowed appeals filed by Sampark Management Consultancy LLP, quashing reassessment notices issued under Section 148 of the Income Tax Act, 1961, for Assessment Years 2016-17 and 2017-18. The Tribunal held that the notices were invalid due to the absence of proper sanction from the competent authority as mandated under Section 151 of the Act, as amended by the Finance Act, 2021.

Coming to the facts of the case, reassessment proceedings were initiated by the Assessing Officer (AO) based on notices issued under Section 148 on 28.07.2022 for AY 2016-17 and 27.07.2022 for AY 2017-18. The assessee challenged the jurisdiction of the AO, arguing that the approval for reassessment was granted by the Principal Commissioner of Income-tax, which was contrary to the amended provisions of Section 151.

The Tribunal noted that since the notices were issued after more than three years from the end of the relevant assessment years, the approval should have been obtained from a higher authority, specifically the Principal Chief Commissioner of Income-tax or the Principal Director General or their equivalents, as per the amended law.

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The bench observed that the approval granted by the principal commissioner was legally unsustainable, rendering the reassessment proceedings void. The Tribunal noted that the jurisdictional flaw vitiated the entire process, and thus, the orders passed by the Commissioner of Income Tax(Appeals) upholding the reassessment were set aside.

The ITAT, comprising Anubhav Sharma (Judicial Member) and Manish Agarwal (Accountant Member), allowed the assessee’s appeal.

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