Facts of the Case

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

Subsequently, after the decision of the Supreme Court in Union of India vs Ashish Agarwal (2023) 1 SCC 617, the Income Tax Department initiated reassessment proceedings and issued notices under Section 148A(b) of the Income Tax Act.

After considering the replies filed by the petitioners, the Assessing Officer passed orders under Section 148A(d) and issued consequential reassessment notices under Section 148 on the ground that income had escaped assessment.

The petitioners challenged the reassessment proceedings before the Delhi High Court contending that the notices and orders were invalid as they were not approved by the “specified authority” as required under Section 151(ii) of the Income Tax Act.

 Issues Involved


  1. Whether reassessment notices issued under Sections 148A(d) and 148 of the Income Tax Act are valid when prior approval of the specified authority under Section 151(ii) has not been obtained.
  2. Whether approval granted by an authority specified under Section 151(i) can validate reassessment proceedings when more than three years have elapsed from the end of the relevant assessment year

 Petitioner’s Arguments


  • The reassessment proceedings were initiated without obtaining approval from the correct specified authority as mandated under Section 151(ii) of the Income Tax Act.
  • Since more than three years had elapsed from the end of the relevant assessment year, the approval was required from Principal Chief Commissioner / Principal Director General / Chief Commissioner / Director General.
  • However, the approval in the present cases was granted by Principal Commissioner, which falls under Section 151(i) and not under Section 151(ii).
  • Therefore, the reassessment proceedings were without jurisdiction and liable to be quashed.
  • Reliance was placed on the Delhi High Court decision in Ganesh Dass Khanna vs Income Tax Officer (2023: DHC: 8187-DB).

 Respondent’s Arguments


  • The Revenue argued that the reassessment proceedings were valid and relied upon the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA).
  • It was further argued that CBDT Instruction No. 1/2022 dated 11.05.2022 permitted issuance of such notices.
  • The Revenue contended that approval obtained from the authority was sufficient for initiating reassessment proceedings.

Court Findings


  • The first proviso to Section 148 clearly mandates that no notice can be issued without prior approval of the specified authority.
  • Under Section 151, the specified authority depends upon the time elapsed since the end of the relevant assessment year.
  • Where more than three years have elapsed, approval must be obtained from authorities specified in Section 151(ii).
  • In the present cases, although more than three years had elapsed, approval was obtained from authorities falling under Section 151(i).
  • Such approval is not legally valid for initiating reassessment proceedings beyond three years.

  Court Order


The Delhi High Court quashed the impugned notices and orders issued under Sections 148A(d) and 148 of the Income Tax Act on the ground that:

  • Approval of the specified authority under Section 151(ii) was not obtained.

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

Important Clarification by the Court

  • Approval of the specified authority is mandatory before issuing reassessment notices under Section 148.
  • The authority granting approval must strictly correspond with the time limits prescribed under Section 151 of the Income Tax Act.
  • Any reassessment initiated without such approval will be invalid in law.


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

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