Beyond 3 Years: Only PCCIT Approval Valid – Bombay High Court Quashes Reopening
Ramesh Bachulal Mehta vs. ITO
Writ Petition No. 271 of 2023
Date of Decision: 11 August 2025
Court: Bombay High Court
Issue:
For AY 2016–17, whether reassessment proceedings initiated under the new law were valid when the Assessing Officer (AO) obtained sanction from the PCIT instead of the PCCIT, as required under section 151 of the Income Tax Act.
Facts:
1. Notice u/s 148 issued on 19.05.2021.
2. After SC ruling in UOI vs. Ashish Agarwal, the notice was deemed to be under 148A(b) (letter dated 23.05.2022).
3. AO passed order u/s 148A(d) on 13.07.2022 and issued fresh notice u/s 148 for AY 2016–17.
4. Order mentioned approval of PCIT-27, Mumbai.
5. Assessee argued: since more than 3 years had lapsed from end of AY 2016–17 (i.e., beyond 31.03.2020, extendable to 30.06.2021 due to TOLA 2020), sanction under section 151(ii) (PCCIT/CCIT/PDGIT/DGIT) was mandatory, not PCIT.
Court’s Findings:
1. Relied on SC in UOI vs. Rajeev Bansal [2024] 469 ITR 46 (SC).
2. As per new reassessment law, if:
Escaped income exceeds ₹50 lakh, and
More than 3 years have passed from end of relevant AY,
Then approval of PCCIT/CCIT/PDGIT/DGIT is mandatory u/s 151(ii).
3. For AY 2016–17, the 3-year period ended on 31.03.2020 (extendable to 30.06.2021 via TOLA).
4. Since order u/s 148A(d) was passed on 13.07.2022, it was clearly beyond 3 years.
5. However, AO wrongly obtained sanction from PCIT (u/s 151(i)), instead of PCCIT (u/s 151(ii)).
Decision:
1. Sanction from correct authority is a jurisdictional precondition.
2. Since AO failed to obtain sanction from PCCIT, the reassessment proceedings were vitiated and quashed.
The copy of the order is as under:
