Facts of the Case

Multiple writ petitions were filed before the Delhi High Court by various assessees including Twylight Infrastructure Pvt. Ltd. challenging reassessment proceedings initiated by the Income Tax Department.

The petitioners had filed their income tax returns for Assessment Years 2016-17 and 2017-18, which were processed by the department under Section 143(1) of the Income Tax Act. Later, the Assessing Officer initiated reassessment proceedings alleging that income chargeable to tax had escaped assessment.

The Assessing Officer issued notices under Section 148 of the Income Tax Act after passing orders under Section 148A(d).

The petitioners challenged the legality of the reassessment notices before the High Court primarily on the ground that the mandatory sanction of the “specified authority” under Section 151 of the Income Tax Act had not been properly obtained before issuing the reassessment notices.

Issues Involved


  1. Whether reassessment notices issued under Section 148 of the Income Tax Act were valid without obtaining the approval of the “specified authority” as required under Section 151 of the Act.
  2. Whether the reassessment proceedings initiated by the Assessing Officer were sustainable in law when mandatory statutory conditions were not fulfilled.
  3. Whether the orders passed under Section 148A(d) and consequential notices under Section 148 were liable to be quashed.

Petitioner’s Arguments

The petitioners contended that the reassessment proceedings were illegal and without jurisdiction because the statutory requirement of obtaining approval from the “specified authority” under Section 151 of the Income Tax Act had not been complied with.

It was argued that the sanction granted for issuing reassessment notices was not by the competent authority as prescribed under the amended provisions of the Act.

Therefore, the notices issued under Section 148 and the orders passed under Section 148A(d) were invalid and liable to be quashed.

Respondent’s Arguments

The Income Tax Department contended that the reassessment proceedings were initiated in accordance with law based on information suggesting that income had escaped assessment.

The respondents argued that the procedural requirements under the Income Tax Act had been substantially complied with and therefore the reassessment notices should not be interfered with in writ jurisdiction. 

Court Findings

The Delhi High Court examined the statutory scheme governing reassessment under the Income Tax Act, particularly the requirement of prior approval under Section 151.

The Court observed that the law mandates sanction by the “specified authority” before issuance of notice under Section 148 in cases where reassessment is initiated after the prescribed period.

The Court found that the approval required under Section 151 had not been properly obtained from the competent authority before issuing the impugned notices.

Since the statutory requirement of approval from the specified authority is mandatory, non-compliance rendered the reassessment proceedings legally unsustainable.

Court Order


The Delhi High Court quashed the reassessment notices issued under Section 148 of the Income Tax Act along with the orders passed under Section 148A(d) in the concerned cases.

The Court held that reassessment proceedings initiated without proper sanction from the specified authority are invalid in law.

 

Important Clarification

The Court clarified that the requirement of obtaining approval from the “specified authority” under Section 151 is a mandatory statutory safeguard.

Failure to obtain such approval before issuing reassessment notices vitiates the entire reassessment proceedings.

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


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