High Court quashes reassessment orders and demand notice under Section 148 of the Income Tax Act, 1961 for want of sanction from competent authority.
Meetu Kumari | Sep 13, 2025 |
High Court Quashes Reassessment Proceedings for Lack of Sanction under Section 151
The present petition was brought with the object to challenge reassessment proceedings for the Assessment Year 2017-18. Notice dated 07.04.2021 was issued under Section 148 of the Income Tax Act, 1961. A further notice under Section 148A(b) dated 26.05.2022 was issued, a reply was submitted, and an order under Section 148A(d) was passed on 29.07.2022.
Thereafter, an order under Section 147 read with Section 144B dated 17.02.2025 and a demand notice dated 17.02.2025 were issued. The ground taken was that the reassessment proceedings were without jurisdiction as a sanction had been accorded by the Principal Commissioner, whereas under Section 151 of the substituted provisions, the approval was required from the Principal Chief Commissioner or equivalent authority.
Question before Court: Whether reassessment proceedings initiated under Section 148 after 01.04.2021 could be sustained when a sanction had not been obtained from the competent authority under Section 151.
HC Held: The Court held that a sanction by the competent authority under Section 151 is mandatory and jurisdictional. Since the sanction was withheld only from the Principal Commissioner, but not from the Principal Chief Commissioner or equivalent authority as provided, the condition could not be fulfilled. The Bench reiterated that reassessment proceedings have to conform to the substituted provisions of the Income Tax Act, 1961 and that absence of sanction from the authority specified under Section 151 renders such proceedings unsustainable in law.
The Assessing Officer lacked jurisdiction to serve the notice under Section 148 dated 30.07.2022 or to make the order dated 17.02.2025 under Section 147 read with Section 144B. The whole proceedings were thus considered to be without jurisdiction. The Court granted the writ petition. The order dated 17.02.2025, the notice of demand dated 17.02.2025, the order dated 29.07.2022 under Section 148A(d), and the notice dated 30.07.2022 under Section 148 were quashed.
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