“specified authority”
The decision most relied on for specified authority is (P.) Ltd. v. ITO (221 ITR 538), cited in 125 judgments on BharatTax.
Leading authorities on specified authority
The sanction of a specified authority under Section 151 is a mandatory procedural check before issuing a notice under Section 148. This procedural safeguard aims to prevent mechanical reopening of assessments and harassment of the assessee.
The amended Section 151 of the Income-tax Act, governing the sanction for reassessment proceedings under Sections 148 and 148A, applies to cases initiated under the new reassessment regime. The specified authority for granting such sanction becomes the Principal Chief Commissioner or Principal Director General if more than three years have elapsed from the end of the relevant assessment year.
The reassessment proceedings are invalid if the required sanction under Section 151 of the Income Tax Act is not obtained from the statutorily designated authority or if the approval is granted mechanically without due satisfaction. Approval by a higher authority cannot substitute the satisfaction of the authority specified in Section 151.
During a search operation, the authorized officer recording a statement under Section 132(4) must fully explain Explanation 5 to Section 271(1)(c) to the assessee, particularly the requirement to specify the manner of earning undisclosed income, for a valid claim of penalty immunity. Income not declared or advance tax not paid proportionately before the search date is treated as undisclosed, thereby disallowing advance tax benefits.
The Supreme Court, when exercising its jurisdiction under Article 142 of the Constitution, is not bound by the procedural requirements of law. This power allows the Court to issue directions that may modify or waive certain procedural mandates, such as those related to reassessment notices.
The authority required to grant prior approval under Section 151 of the Income-tax Act for reassessment proceedings varies based on the applicable time limit for reassessment, as limitation is inextricably intertwined with the rank of the specified approving authority.
The validity of sanction for issuing orders under section 148A(d) and notices under section 148 must be tested with reference to the amended section 151. If sanction is not granted by an authority specified under section 151(ii), such orders and notices are invalid and liable to be quashed.
The signing of a notice or document by the specified authority is a mandatory requirement under section 282A(1) of the Income Tax Act, 1961, and cannot be treated as an empty formality. Approval under section 151 requires the signature, name, and designation of the specified authority.