Reassessment Without Approval? ITAT Quashes All 3 Years as Void ab Initio

The assessee was served with reassessment notices for three assessment years, namely 2009-10, 2010-11, and 2011-12. The revenue department reopened the cases under Section 147. The assessee claimed that the notices didn’t mention any date, and there was no indication of any approval being taken under Section 151 before issuing the aforesaid notices.

He filed an RTI to verify whether any approval had been obtained, and the CPIO from ITO replied that they didn’t have any such record or case file in their possession. Based on these circumstances, the assessee contested the legality of the reassessment before CIT (A) as the issue of notice u/s 148 in the absence of any approval of such reassessments is bad in law and void ab initio.  The Commissioner of Income Tax (Appeals), while deciding the appeal, sustained the additions made under Section 69A of the Income Tax Act for AYs 2009-10, 2010-11, and 2011-12. Aggrieved by the said order, the assessee filed the present appeals before the Income Tax Appellate Tribunal.

Main Issue Before the Tribunal: If the notices were undated and the Revenue did not provide any approval obtained under Section 151, were the reassessment proceedings for AYs 2009–10 to 2011–12 still valid?

ITAT Held: The Tribunal examined the records and found that not only were the reasons for reopening undated, but the AO also failed to mention whether prior approval under Section 151 was obtained. This wasn’t a minor procedural lapse, it went straight to the heart of jurisdiction. The Tribunal concluded that without approval under Section 151, the entire reassessment exercise was legally void. Since this legal defect affected the foundation of the reassessments, the Tribunal didn’t even get into the merits of the additions made by the AO. The Tribunal noted that the recorded reasons did not mention any approval and that, in response to an RTI application, the Revenue could not provide a copy of such approval due to missing records.

In view of the absence of prior sanction under Section 151, the Tribunal held that the reassessment proceedings were void ab initio and quashed the reassessment orders for all three years.

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