Facts of the Case

The batch of writ petitions before the Delhi High Court arose out of reassessment proceedings initiated by the Income Tax Department for Assessment Years 2016–17 and 2017–18. The petitioners included various assessees such as companies, individuals, and Hindu Undivided Families (HUFs).

In a representative matter, the assessee filed its return of income for AY 2017–18, which was processed under Section 143(1) of the Income Tax Act, 1961. Subsequently, following the decision of the Supreme Court in Union of India v. Ashish Agarwal, the Revenue issued a notice under Section 148A(b) alleging that certain income had escaped assessment.

The assessee submitted a reply to the notice. Thereafter, the Assessing Officer passed an order under Section 148A(d) concluding that income had escaped assessment and issued a reassessment notice under Section 148.

The assessees challenged the reassessment proceedings before the Delhi High Court contending that the notices and orders were issued without approval of the competent specified authority as mandated under Section 151 of the Income Tax Act.

 Issues Involved


  1. Whether reassessment notices issued under Sections 148A(d) and 148 of the Income Tax Act, 1961 are valid without prior approval of the specified authority under Section 151.
  2. Whether approval granted by an authority other than the specified authority prescribed under Section 151(ii) renders the reassessment proceedings invalid.
  3. Whether reliance placed by the Revenue on Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) and CBDT Instruction No.1/2022 dated 11.05.2022 could cure the defect of absence of proper approval.

Petitioner’s Arguments

  • The impugned notices were issued without obtaining approval from the “specified authority” as required under Section 151(ii).
  • The approval relied upon by the Revenue was from an authority not competent under the statutory scheme.
  • The statutory requirement of approval is a jurisdictional condition precedent, and failure to comply with it vitiates the entire reassessment proceedings.
  • The reliance placed by the Revenue on TOLA and CBDT instructions could not override the statutory provisions of the Income Tax Act.

 Respondent’s Arguments


  • The notices were issued following the Supreme Court judgment in Union of India v. Ashish Agarwal.
  • Approval had been obtained from the competent authority within the department.
  • The actions of the department were also supported by TOLA and CBDT Instruction No.1/2022, which governed the implementation of reassessment provisions after the amendments introduced by the Finance Act, 2021.

 Court Findings


The Delhi High Court examined the provisions of Sections 148, 149, and 151 of the Income Tax Act, 1961, both prior to and after the amendments introduced by the Finance Act, 2021.

  • Under the amended framework, issuance of a notice under Section 148 requires prior approval of the “specified authority”.
  • This approval is not a procedural formality but a mandatory statutory requirement.
  • The reassessment proceedings in the present batch of cases had been triggered without approval from the authority prescribed under Section 151(ii).

The Court also noted that statutory provisions of the Act cannot be overridden by administrative instructions or relaxation laws such as TOLA.

Court Order


The Delhi High Court held that the absence of approval from the specified authority renders the reassessment proceedings invalid in law.

  • Set aside the orders passed under Section 148A(d).
  • Quashed the consequential notices issued under Section 148 of the Income Tax Act.

The writ petitions were therefore allowed in favour of the assessees.

Important Clarification


The Court clarified that approval from the correct “specified authority” under Section 151 is mandatory before issuing reassessment notices.

If such approval is not obtained from the competent authority prescribed under the statute, the entire reassessment process becomes legally unsustainable.

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


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