The court upheld that reassessment notices issued without the appropriate authority's approval under Section 151 are invalid, emphasizing that TOLA does not amend the requirement for such approval.

JUDGMENT

YASHWANT VARMA, J.

1. This batch of writ petitions assails the validity of the reassessment action initiated by the respondents under Section 148 of the Income Tax Act, 1961 , Act and pertaining to Assessment Year, AY 2015- 16. The solitary ground on which those reassessments were assailed before us was a violation of the provisions contained in Section 151 of the Act.

2. It is the case of the writ petitioners that the sanction for initiation of reassessment action rests on an approval granted by the Joint Commissioner of Income Tax, JCIT as opposed to the Principal Chief Commissioner /Chief Commissioner/ Principal Commissioner/ Commissioner as mandated by Section 151(1) of the Act. It is contended that since all the impugned Section 148 notices have come to be issued after the expiry of a period of four years from the concerned AY, they were liable to be mandatorily approved by the Principal Chief Commissioner or the other authorities specified in sub-section (1) of Section 151.

3. According to the writ petitioners, the impugned notices would not sustain even if they were tested on the basis of Section 151 as it came to exist on the statute book after Finance Act 2021. It becomes pertinent to note that after the passing of the Finance Act 2021, Sections 148 and 148A introduced the concept of “specified authority” as the designated officer which would be liable to accord sanction for reassessment and which expression was defined by Section 151. In terms of Section 151(i) after the passing of the Finance Act 2021, if the notices for reassessment were issued where “three years or less than three years” had elapsed from the end of the relevant AY, the action would have to be based on the approval of the Principal Commissioner/Principal Director/Commissioner/Director. In all other cases, and which would relate to those reassessments which were proposed to be commenced “if more than three years” had elapsed from the end of the concerned AY, the authorities empowered to accord approval were specified to be the Principal Chief Commissioner/ Principal Director General/ Chief Commissioner/ Director General. The petitioners would contend that viewed from any angle and irrespective of whether the unamended Section 151 or the provision as it came to form part of the statute post Finance Act 2021, the approval of reassessment by the JCIT would not sustain.

4. The petitioners would assert that the provision for sanction which stands engrafted in Section 151 assumes significance in light of the statute clearly stipulating that a reassessment action would not be 4 commenced unless the authorities mentioned in that provision are satisfied that it is a fit case for issuance of notice under Section 148/148A. It is their case that in the absence of sanction being accorded by the competent authority, the entire action for reassessment is liable to be set at nought on this ground alone.

5. The respondents, on the other hand, bid us to uphold the initiation of action in light of the provisions contained in the Taxation and Other Laws (Relaxation & Amendment of Certain Provisions) Act, 2020, TOLA and which enabled them to initiate action for reassessment notwithstanding the time frames ordinarily applicable having expired. To recall, TOLA had come to be promulgated to overcome the insurmountable difficulties which beset the initiation of action and compliance with statutory timelines on account of the COVID-19 pandemic which had broken out in March 2020 and raged across the country. The provisions of TOLA thus provided an extended lifeline for the issuance of notices, the grant of sanction and other statutory compli