Reassessment limitation under section 148: a time-barred notice could not be revived by the new reassessment regime.

A section 148 notice issued for assessment year 2015-16 after the Finance Act, 2021 reassessment regime could not be sustained because the six-year period from the end of the relevant assessment year had already expired on the date of issue. The transition provision did not revive a power to reopen a time-barred assessment, so the notice was barred by limitation and the reassessment proceedings were quashed in favour of the assessee.

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Issues: Whether the notice issued under section 148 of the Income-tax Act, 1961 for assessment year 2015-16 was barred by limitation under section 149(1)(b), and whether the reassessment proceedings were liable to be quashed.

Analysis: The notice under section 148 was issued on 28.07.2022 for assessment year 2015-16 after the reassessment regime introduced by the Finance Act, 2021. The governing test was whether, on the date of issue of the notice, the period of six years from the end of the relevant assessment year had already expired under the old regime saved by the first proviso to section 149(1)(b). On the facts, that period expired on 31.03.2022. The subsequent notice therefore could not be sustained under the new regime, and the reassessment action was hit by limitation.

Conclusion: The notice under section 148 dated 28.07.2022 was invalid and barred by limitation, and the reassessment order was quashed in favour of the assessee.

Ratio Decidendi: For assessment years covered by the reassessment transition, a notice under the new section 148 cannot be issued if the six-year period from the end of the relevant assessment year had already expired on the date of issuance, because the prospective ten-year regime does not revive a time-barred power to reopen.

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