Invalid Sanction Vitiates Reassessment: High Court Quashes Section 148 Notice Issued via Incorrect Authority Approval

The jurisprudence surrounding the reopening of concluded tax assessments places a strict burden on the Revenue department to follow statutory procedures meticulously. A critical component of this procedural mandate is obtaining approval from the correct designated authority before issuing a reassessment notice. In a landmark judicial determination, the Bombay High Court in the case of Chandar Mahadev Naik Vs ITO nullified reassessment proceedings because the tax authorities secured approval from an incompetent authority.

This ruling reinforces the legal principle that procedural lapses regarding statutory sanctions are not mere technical irregularities but fundamental jurisdictional defects that render the entire reassessment void ab initio.

Background of the Dispute

The controversy originated when the Revenue department sought to reopen the assessment of the assessee for the Assessment Year (AY) 2016–17. The Assessing Officer (AO) assumed jurisdiction and subsequently passed an assessment order on 27 May 2023. This order was framed under Section 144 read with Section 147 of the Income Tax Act 1961.