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Issues: Whether the notice issued for reassessment under section 148 of the Income-tax Act, 1961 for assessment year 2016-17 was barred by limitation under section 149 and whether the reassessment order and demand notice, being consequential, were liable to be quashed.
Analysis: The escaped income recorded in the notice under section 148A(b) and in the order under section 148A(d) was Rs. 39,21,450/-. For assessment year 2016-17, the normal period for issuance of notice under section 148 expired on 31.03.2020. The extended period beyond three years up to ten years could be invoked only where the escaped income was Rs. 50,00,000 or more and the other statutory requirements were satisfied. As the alleged escaped income was below that threshold, the notice issued on 21.07.2022 could not be sustained within the extended limitation period. The initiation of reassessment proceedings was therefore treated as wholly without jurisdiction, making the subsequent reassessment order and demand notice consequential and unsustainable.
Conclusion: The reassessment notice was held to be barred by limitation and void, and the consequential reassessment order and demand notice were quashed.
Ratio Decidendi: Where the escaped income disclosed in the reassessment material is below the statutory threshold for extended limitation, a notice under section 148 issued beyond the normal limitation period is without jurisdiction and all consequential reassessment ures fail.
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