Facts of the Case

The petitioners, including Twylight Infrastructure Pvt. Ltd. and several other assessees, challenged reassessment proceedings initiated by the Income Tax Department.

The Assessing Officer issued notices under Section 148 of the Income-tax Act, 1961, alleging escapement of income for the relevant assessment years. These notices were issued following the new reassessment regime introduced by the Finance Act, 2021.

The petitioners contended that the reassessment notices and subsequent proceedings were invalid because the mandatory sanction from the “specified authority” required under Section 151 of the Income-tax Act had not been properly obtained.

Accordingly, the petitioners approached the Delhi High Court under Article 226 of the Constitution of India, seeking quashing of the reassessment notices and related proceedings.

 Issues Involved


  1. Whether reassessment notices issued under Section 148 of the Income-tax Act, 1961 were valid without obtaining proper sanction from the specified authority under Section 151.
  2. Whether failure to comply with statutory approval requirements vitiates the reassessment proceedings.
  3. Whether the reassessment notices and orders were liable to be quashed for non-compliance with the mandatory provisions of the Income-tax Act.

Petitioner’s Arguments

  • The reassessment proceedings were initiated without obtaining proper approval from the specified authority mandated under Section 151 of the Income-tax Act.
  • The sanction granted by the authority did not satisfy the statutory requirement under the amended reassessment framework.
  • Since the sanction was mandatory, failure to obtain valid approval rendered the entire reassessment process illegal.
  • The notices issued under Section 148 and the consequential orders were therefore liable to be quashed.

 Respondent’s Arguments


  • The reassessment proceedings were initiated based on information suggesting escapement of income.
  • The sanction for issuing notices had been obtained in accordance with the statutory procedure.
  • The petitioners had alternative remedies under the Income-tax Act, and therefore the writ petitions should not be entertained.

 Court Findings


  • The law mandates that prior approval from the specified authority is required before issuing a notice under Section 148 in reassessment cases.
  • The rank of the authority granting sanction is crucial and must strictly comply with Section 151 of the Act.
  • In the present case, the sanction required from the competent authority was not properly obtained before issuing the reassessment notices.

Since the mandatory statutory requirement had not been fulfilled, the reassessment notices and related proceedings were held to be legally unsustainable.

Court Order

  • Quashed the impugned reassessment notices and orders issued under Section 148 of the Income-tax Act.
  • Held that the reassessment proceedings were invalid due to lack of proper approval from the specified authority under Section 151(ii).
  • Granted liberty to the Revenue to initiate reassessment proceedings afresh, provided that they comply with the statutory requirements and due process of law.

Important Clarification

  • Sanction from the specified authority under Section 151 is a mandatory condition for issuing reassessment notices.
  • Non-compliance with this statutory requirement renders reassessment proceedings invalid.
  • However, the Income Tax Department retains the right to initiate fresh proceedings in accordance with the law.


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

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