s.151 — Sanction for a reassessment notice
Who has to approve a reassessment notice and the order that precedes it, how the answer changed on 1 September 2024, and what a sanction challenge has to establish.
Two texts, and the rank of the sanctioning officer fell sharply between them. Since 1 September 2024, by Act No. 15 of 2024, the Finance (No. 2) Act 2024, the section is a single sentence naming the Additional Commissioner, Additional Director, Joint Commissioner or Joint Director. What section 152 preserves is the text as it stood IMMEDIATELY BEFORE that date, not as first substituted in 2021: as preserved it split the function by elapsed time, giving it to the Principal Commissioner, Principal Director, Commissioner or Director within three years and to the Principal Chief Commissioner, Principal Director General, Chief Commissioner or Director General beyond that, with a proviso on how the three years are computed. The Department's footnote records that the preserved shape was reached by amendment in 2023, so for a sanction granted earlier the clause then in force has to be read rather than the preserved text, and that earlier text is not set out here. That warning bites hardest on the proviso directing how the three years are to be computed, which is part of the shape the 2023 amendment produced: on a sanction granted in 2021 or 2022 it cannot simply be assumed to have applied. Which limb of the preserved text entered when has not been closed against a primary source for this page. Which text governs is decided by section 152, and is dealt with on that page. Sourcing: the current text was read on the Year 2025 edition and the preserved one on footnote 30 to the "2024 (No. 2)" edition.
Income-tax Act, 1961
s.151
Income-tax Act, 2025
s.284
In force from 1 April 2026, but s.536(2)(c) preserves the 1961 Act for tax years beginning before that date.
In short
Section 151 of the Income-tax Act, 1961 names the specified authority for sections 148 and 148A. As it now stands it is one sentence: the specified authority shall be the Additional Commissioner or the Additional Director or the Joint Commissioner or the Joint Director, as the case may be. There is no split by elapsed time and no proviso. The text section 152 preserves was different in kind. It gave the function to the Principal Commissioner, Principal Director, Commissioner or Director where three years or less had elapsed from the end of the relevant assessment year, and to the Principal Chief Commissioner, Principal Director General, Chief Commissioner or Director General where more than three years had elapsed, with a proviso directing that the three years be computed after taking into account the periods excluded by the third, fourth and fifth provisos, or extended by the sixth proviso, to section 149(1). So under the preserved text an approval by the wrong rank is said to be no approval at all, and the rank turns on a computation the exclusions can move. Under the current text that question disappears, and what remains is whether approval was obtained, by one of the four named officers, and on material. Approval has not ceased to be required: it has moved. It attaches to the section 148A(3) order in the ordinary case, and to the notice itself under the second proviso to section 148(1) where the information came through the section 135A scheme and section 148A therefore does not apply. The counterpart in the Income-tax Act, 2025 is section 284, which names the same four officers, without the closing words "as the case may be".
What the provision does
Names the officer whose approval sections 148 and 148A require, and so supplies the external check on a reassessment before it issues. It does not itself impose the requirement of approval: under the current text that comes from section 148A(3) and from the second proviso to section 148(1), and under the preserved text it came from the first proviso to section 148 and from clauses (a) and (d) of section 148A. It does not require a speaking order, and it says nothing about what the approving officer must see. Since 1 September 2024 it no longer varies the rank with the age of the year, which removed the commonest sanction point on the preserved text.
Threshold questions
- Which text governs, because the rank differs completely: Additional or Joint level under the current text, Commissioner or Chief Commissioner level under the preserved one
- Under the preserved text, how many years had elapsed, computed after the exclusions and extension the proviso directs, because that decides which rank was competent
- Which step carried the approval on these facts, the section 148A(3) order in the ordinary case or the notice itself where the information came through the section 135A scheme
- Was approval in fact obtained before that step was taken, and who granted it, by name and designation
- On what material was it granted, and does the file show anything beyond a signature on a proforma
- Whether the approval record has been asked for in writing, because the point cannot be run on inference and the refusal to produce it is itself worth having on the file
In practice
The recurring disputes.
Approval by the wrong rank under the preserved text
Where more than three years had elapsed the approval had to come from the Principal Chief Commissioner or Chief Commissioner level, and the assessee's case is that an approval by a Principal Commissioner is then a nullity and not a curable irregularity, the approval being the jurisdictional condition the statute imposes. The Revenue answers on two footings. The first is arithmetical: that once the exclusions the proviso directs are taken into account the elapsed period was three years or less, so the lower rank was competent. The second is section 292B, that an approval which exists and is in substance in conformity with the intent and purpose of the Act is not void for a defect in form. The answer to the second is that section 292B cures a defective notice, summons or return, not the absence of the jurisdictional fact the section makes a condition, and an approval by an officer the section does not name is not a defective approval but no approval. The authorities are not set out on this page.
Mechanical approval
The assessee's point is that an approval recorded as "Yes, I am satisfied" on a proforma, granted in bulk on a single day, shows no application of mind and so is not the approval the section requires. The Revenue's answer is that section 151 requires satisfaction and not a speaking order, that the approving officer has the proposal before him, and that a court will not go behind a recorded approval without material suggesting it was not applied. Expect section 292B to be pleaded against the point as well, with the answer that its words reach a mistake, defect or omission in a notice, summons or other proceeding, not the want of the satisfaction this section requires. It is usually won or lost on what the approval record actually shows, so ask for it early.
Who sanctions under the notified scheme
Section 151A permits the scheme to cover the sanction for issue of notice under section 151 as well as the notice itself. Where it does, the assessee's point is that an approval granted by the territorial Additional or Joint Commissioner, rather than by the authority the scheme designates, is not the approval the Act requires once the function has been allocated away. The Revenue's answer is that section 151 names a rank and not an office, that any officer of that rank who had the proposal before him satisfies it, and that the scheme governs the route by which the proposal reaches him rather than his competence to approve. Settle it by asking for the approval record with the designation and the office of the approving officer, because the argument cannot be run on inference.