ITAT Delhi Quashes Reassessment in Meerut Property Case Over Invalid Sanction Under Section 151

Background

The Income Tax Appellate Tribunal Delhi Bench has set aside a reassessment order for Assessment Year 2011–12 after holding that the mandatory statutory sanction for reopening the case was improperly obtained, rendering the entire proceedings void in law. The dispute arose from an addition of ₹48.08 lakh made against Asok Kumar in relation to alleged unexplained investment in property. The Assessing Officer had reopened the completed assessment under Section 148 of the Income Tax Act, alleging escapement of income. However, before the Tribunal, the assessee challenged the very jurisdiction of the tax department to reopen the case, arguing that the foundational notice was time-barred and, more crucially, issued without valid approval as required under Section 151.

Outcome

The Single Member Bench noted that the reopening sanction had been granted by both the Additional Commissioner of Income Tax and the Principal Commissioner of Income Tax. Relying on settled judicial principles, the Tribunal held that when the law mandates approval by a specific authority, such power must be exercised strictly in the prescribed manner. Grant of sanction by multiple authorities, when only one was statutorily competent, vitiated the entire process. The Tribunal drew support from earlier High Court and Tribunal rulings which emphasised that jurisdictional conditions in reassessment proceedings are not mere procedural formalities but safeguards against arbitrary reopening of concluded assessments.

Consequently, the reassessment order framed under Sections 147 and 143(3) was quashed as void ab initio. With the reopening itself held invalid, the Tribunal declined to examine the merits of the property-related addition.