Sanction by Wrong Authority Under Section 151 Renders Section 148 Reassessment Void Ab Initio – ITAT Delhi

Case Background

Case: Vishesh Developers Pvt. Ltd. Vs ACIT (ITAT Delhi)
Assessment Year: 2019-20
Forum: Income Tax Appellate Tribunal, Delhi
Order Date: 19th June, 2026

The Delhi Bench of the Income Tax Appellate Tribunal recently delivered a significant ruling in the matter of Vishesh Developers Pvt. Ltd. Vs ACIT, addressing a fundamental jurisdictional question concerning reassessment proceedings initiated under Section 148 of the Income Tax Act, 1961. The core controversy revolved around whether the authority that accorded sanction under Section 151 possessed the requisite statutory competence to do so, given that the notice under Section 148 had been issued well beyond the three-year threshold from the close of the relevant assessment year.

When reassessment proceedings are sought to be initiated after the expiry of three years from the end of the relevant assessment year, Section 151 of the Income Tax Act, 1961 imposes a heightened procedural safeguard — the prior sanction for issuance of notice under Section 148 must be obtained from a specifically designated senior authority. The present case squarely tested whether compliance with this statutory prescription had actually been achieved, or whether the process had been rendered legally infirm by the involvement of a functionary not authorised to grant such sanction under the circumstances.

Assessee's Submissions Before the Tribunal

The assessee, represented by Shri Mani Bhadra Jain, advanced a two-pronged argument before the Tribunal:

Primary Contention: Sanction Granted by Wrong Authority

  • The Assessing Officer issued a notice under Section 148 of the Income Tax Act, 1961 on 12.04.2023 for Assessment Year 2019-20, which was manifestly beyond the three-year period counted from the end of the relevant assessment year.
  • Section 151, as it stood at the relevant point in time, explicitly required that where more than three years had elapsed from the end of the assessment year, prior approval for issuance of a Section 148 notice must be obtained from the Principal Chief Commissioner of Income Tax (PCCIT) or the Chief Commissioner of Income Tax (CCIT).
  • A perusal of the approval document dated 12.04.2023, available at pages 32 and 33 of the paper book, revealed that the sanction under Section 151 had been accorded by the Principal Commissioner of Income Tax (PCIT) — an authority lower in hierarchy than what the statute mandated for cases falling beyond the three-year window.
  • Crucially, in Row No. 9 of the approval, the PCIT had himself recorded that the time limit for the current proceedings was governed by Section 149(1)(b) of the Act — i.e., "more than three years but not more than ten years." This internal acknowledgment within the approval document itself confirmed that the reopening fell in the category requiring sanction from a higher authority.
  • Notwithstanding this express recognition, the PCIT proceeded to grant approval, thereby acting in clear contravention of the statutory mandate under Section 151.