Facts of the Case

The petitioners filed their income tax returns for Assessment Years 2016-17 and 2017-18, which were processed under Section 143(1) of the Income Tax Act, 1961.

Subsequently, the Income Tax Department initiated reassessment proceedings and issued show cause notices under Section 148A(b) alleging that income chargeable to tax had escaped assessment.

After considering the replies submitted by the petitioners, the Assessing Officer passed orders under Section 148A(d) and issued reassessment notices under Section 148 of the Income Tax Act.

The petitioners challenged these reassessment proceedings before the Delhi High Court, contending that the notices were issued without obtaining approval from the “specified authority” as required under Section 151(ii) of the Act.

 Issues Involved


  1. Whether reassessment notices issued under Sections 148A(d) and 148 are valid without obtaining prior approval of the specified authority under Section 151(ii) of the Income Tax Act.
  2. Whether approval obtained from an authority specified under Section 151(i) can validate reassessment proceedings where more than three years have elapsed from the end of the relevant assessment year.

Petitioner’s Arguments


  • The reassessment notices were issued beyond three years from the end of the relevant assessment year.
  • Therefore, as per Section 151(ii), approval was required from Principal Chief Commissioner / Principal Director General / Chief Commissioner / Director General.
  • However, the approval was obtained from the Principal Commissioner of Income Tax, which falls under Section 151(i).
  • Since the approval was taken from an incorrect authority, the reassessment proceedings were without jurisdiction and invalid.
  • The petitioners relied on the judgment in Ganesh Dass Khanna vs Income Tax Officer, where similar reassessment proceedings were quashed.

Respondent’s Arguments


  • The Revenue contended that reassessment proceedings were initiated in accordance with law.
  • It was argued that the notices were issued pursuant to the revised reassessment regime introduced by the Finance Act, 2021.
  • The Revenue also relied on the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) to justify the initiation of reassessment proceedings.

Court Findings


  • The first proviso to Section 148 mandates that a notice for reassessment cannot be issued without prior approval of the specified authority.
  • Section 151 specifies the authority whose approval is required depending on the time elapsed from the end of the relevant assessment year.
  • If three years or less have elapsed, approval must be obtained from authorities mentioned in Section 151(i).
  • If more than three years have elapsed, approval must be obtained from authorities specified in Section 151(ii).
  • In the present case, the reassessment notices were issued after the expiry of three years, but approval was obtained from Principal Commissioner, which is not the authority prescribed under Section 151(ii).
  • Therefore, the approval obtained was legally insufficient, rendering the reassessment proceedings invalid.

Court Order / Findings


The Delhi High Court held that the reassessment proceedings were not sustainable in law.

Accordingly, the Court quashed the impugned orders under Section 148A(d) and the reassessment notices issued under Section 148 of the Income Tax Act.

However, the Court granted liberty to the Revenue to initiate reassessment proceedings afresh in accordance with law, if otherwise permissible.

 Important Clarification

  • Approval of the specified authority under Section 151 is mandatory before issuing reassessment notices.
  • The determination of the specified authority depends upon the time limit for reopening assessments.
  • The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act (TOLA) cannot override the statutory requirement under Section 151 regarding approval from the correct authority.


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

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