Section 151 of ITA, 1961 : Section 151: Sanction For Issue Of Notice

Explanation using Example

Imagine a scenario where Mr. Sharma filed his income tax return for the assessment year 2015-16. It's now 2021, and the Income Tax Department discovers some discrepancies suggesting that Mr. Sharma may have underreported his income for that year. Since more than four years have passed since the end of the assessment year 2015-16, under Section 151(1) of the Income Tax Act, the Assessing Officer cannot issue a notice under section 148 to reassess Mr. Sharma's income for that year without obtaining the satisfaction of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner on the reasons recorded for such reassessment.

If the Assessing Officer is of the rank of Assistant Commissioner or below and wants to issue a notice under section 148 within four years of the end of the assessment year but for a complex case, as per Section 151(2), he needs to get the Joint Commissioner's satisfaction on the reasons recorded before issuing such notice to ensure it is a fit case for reassessment.

Furthermore, Section 151(3) clarifies that once the higher authorities are satisfied with the reasons recorded by the Assessing Officer, they do not need to issue the notice themselves; the Assessing Officer can proceed with issuing the notice under section 148.