Facts of the Case

The petitioners challenged reassessment proceedings initiated by the Income Tax Department through notices issued under Section 148 of the Income-tax Act, 1961.

The reassessment notices were issued after the introduction of the new reassessment regime under the Finance Act, 2021, which substituted Sections 147 to 151 of the Income-tax Act.

The Revenue relied upon the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) and contended that the limitation period for issuing reassessment notices stood extended.

The petitioners contended that even if the limitation period was extended, the reassessment notices were issued without obtaining proper statutory sanction from the competent authority under Section 151 of the Income-tax Act, rendering the proceedings invalid.

 Issues Involved


  1. Whether reassessment notices issued under Section 148 of the Income-tax Act are valid when sanction under Section 151 was not obtained from the competent authority.
  2. Whether the extension of limitation under TOLA can override the statutory requirement regarding sanction under the Income-tax Act.
  3. Whether reassessment proceedings initiated under the amended reassessment regime complied with mandatory procedural requirements.

Petitioner’s Arguments

  • The petitioners argued that the reassessment notices were issued without approval from the competent authority as mandated under Section 151 of the Income-tax Act.
  • They submitted that the extension of limitation under TOLA does not alter or dilute the statutory requirement relating to sanctioning authority.
  • Since mandatory statutory approval was not obtained, the reassessment proceedings were without jurisdiction and liable to be quashed.

Respondent’s Arguments


  • The Revenue contended that the reassessment notices were issued within the extended limitation period permitted under TOLA.
  • It was argued that the extension of limitation enabled the department to initiate reassessment proceedings even beyond the original statutory time frame.
  • The Revenue attempted to justify the notices under the transitional framework between the old and amended reassessment provisions of the Income-tax Act.

Court Findings


  • TOLA only extends the limitation period for initiating reassessment proceedings.
  • It does not modify or override statutory provisions relating to sanction under the Income-tax Act.
  • Compliance with procedural safeguards, particularly obtaining sanction under Section 151, is mandatory for valid reassessment proceedings.

Court Order

The Delhi High Court quashed the reassessment proceedings initiated through notices issued under Section 148 of the Income-tax Act where the mandatory sanction under Section 151 was not obtained from the competent authority.

Important Clarification by the Court


  • The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) merely extends limitation periods.
  • It cannot override statutory safeguards prescribed in the Income-tax Act, including approval from the competent authority before issuing reassessment notices.


    Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/RAS05012024CW165242022_114311.pdf

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