Facts of the Case

Multiple petitioners, including Twylight Infrastructure Pvt. Ltd., challenged reassessment proceedings initiated by the Income Tax Department. The impugned notices were issued under Section 148 of the Income-tax Act, 1961, alleging that income chargeable to tax had escaped assessment for the relevant assessment years.

The reassessment notices were issued under the new reassessment regime introduced by the Finance Act, 2021, and were preceded by notices under Section 148A(b) proposing reassessment.

The petitioners contended that the reassessment notices were issued without obtaining proper statutory approval from the specified authority under Section 151 of the Act, which is mandatory before issuing such notices.

It was further argued that in certain cases the reassessment proceedings were initiated beyond three years from the end of the relevant assessment year, and therefore approval from the appropriate authority specified under Section 151(ii) was required.

Aggrieved by the alleged non-compliance with statutory requirements, the petitioners approached the Delhi High Court seeking quashing of the reassessment notices and consequential proceedings.

Issues Involved

  1. Whether reassessment proceedings initiated under Sections 147/148 read with Section 148A were legally valid.
  2. Whether mandatory approval of the specified authority under Section 151 was obtained before issuing reassessment notices.
  3. Whether reassessment notices issued without proper statutory sanction could survive in law.
  4. Whether reassessment proceedings initiated beyond the prescribed limitation period require approval from the correct authority under Section 151(ii).

Petitioner’s Arguments

  • The reassessment notices and consequential proceedings were invalid in law as they were not supported by the approval of the specified authority as required under Section 151 of the Income-tax Act.
  • Obtaining sanction from the competent authority before issuing a notice under Section 148 is a mandatory statutory requirement.
  • The Revenue failed to demonstrate that approval had been granted by the competent authority prior to initiating reassessment proceedings.
  • In cases where reassessment was initiated after three years, approval was obtained from an authority applicable to Section 151(i) rather than the competent authority under Section 151(ii).
  • Therefore, the impugned notices and proceedings were liable to be quashed for non-compliance with statutory requirements.

 Respondent’s Arguments


  • The Revenue contended that the reassessment proceedings were initiated in accordance with the statutory framework introduced by the Finance Act, 2021, and the procedure prescribed under Section 148A.
  • It was submitted that the reassessment notices were issued after considering relevant information suggesting that income had escaped assessment.
  • The Department argued that the notices were issued within the permissible limitation period, including extensions available under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA).
  • According to the Revenue, the reassessment process was lawful and the proceedings should be allowed to continue.

Court Findings


The Delhi High Court examined the statutory scheme governing reassessment proceedings under the Income-tax Act, 1961, particularly the provisions of Sections 148, 149, and 151.

The Court observed that the statutory framework clearly mandates that before issuing a notice under Section 148, the Assessing Officer must obtain sanction from the competent authority specified under Section 151.

The Court emphasized that where reassessment is initiated after the prescribed limitation period, approval must be obtained from the appropriate authority specified under Section 151(ii).

In the present case, the Court noted that approval had been obtained from an authority not competent under the statutory provisions, which rendered the reassessment notices legally defective.

The Court held that procedural safeguards prescribed under the statute are mandatory, and failure to comply with them renders the reassessment proceedings unsustainable in law.

 Court Order


  • The Delhi High Court quashed the reassessment notices and consequential proceedings issued against the petitioners.
  • The Court held that reassessment proceedings initiated without obtaining mandatory approval from the competent authority under Section 151 cannot be sustained in law.
  • However, the Court clarified that the Revenue would be at liberty to initiate fresh reassessment proceedings in accordance with law, provided all statutory requirements are duly complied with.

Important Clarification by the Court


  • Approval of the specified authority under Section 151 is a mandatory statutory requirement before issuing a reassessment notice under Section 148.
  • Approval obtained from an incorrect authority cannot cure the jurisdictional defect.
  • Procedural safeguards in reassessment proceedings must be strictly complied with.

Extension of limitation under TOLA does not override statutory requirements relating to sanction or approval

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/RAS05012024CW165242022_114311.pdf

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