Madras High Court Quashes Reassessment as Time-Barred and Without Jurisdiction:
Tamilselvi v. ITO
Facts:
1. Notices under Sections 148A(b) and 148 were issued in the transitional phase after the 2021 amendment to the reassessment provisions.
2. The petitioner challenged the validity of these notices and consequential orders as:
Time-barred in light of the Supreme Court ruling in Union of India v. Rajeev Bansal (2024 SCC OnLine SC 2693).
Invalidly sanctioned, since approval under Section 151 was given by the Principal Commissioner, whereas under the new regime (post 01.04.2021), sanction beyond three years should come from the Principal Chief Commissioner/Director General, not a Principal Commissioner.
3. In AY 2016–17, the alleged escapement of income was only ₹4,00,000, which did not warrant reopening beyond three years.
Hon Madras HC held as below:
1. After 1 April 2021, all reassessment proceedings must conform to the new procedural requirements, including the sanction hierarchy and limitation structure under Section 149.
2. For A.Y. 2016–17, where the alleged escapement was only ₹4,00,000, reopening beyond three years was statutorily prohibited under Section 149(1)(b).
3. For A.Ys. 2017–18 and 2018–19, even assuming Ashish Agarwal protected old notices, the jurisdictional preconditions (proper approval and limitation) were not met.
4. The approval by the Principal Commissioner was incompetent, as Section 151(1) explicitly mandates that where four years have elapsed, sanction must come from the Principal Chief Commissioner or Director General.
The copy of the order is as under:
