Deemed reassessment notice and surviving limitation period made later section 148 notice time-barred

Where a reassessment notice issued under the old regime is treated as a deemed notice under section 148A(b), the Revenue must complete the remaining steps within the surviving limitation period computed from that deemed notice. Applying that principle, the balance time available here expired before the new-regime notice under section 148 was issued on 24.07.2022. The notice was therefore beyond jurisdiction and time-barred, and the reassessment proceedings and consequential assessment order were quashed.

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Issues: Whether the notice issued under section 148 of the Income-tax Act, 1961 in the new regime on 24.07.2022, and the consequential reassessment proceedings, were barred by limitation in view of the surviving time limit computed from the deemed notice issued under the old regime.

Analysis: The notice originally issued under the old regime was treated as a deemed notice under section 148A(b). Applying the principle laid down for the interplay between the deemed notice and the relaxation legislation, the balance period available to the Revenue had to be computed from the date of the deemed notice up to 30.06.2021. On the facts, that balance period was 23 days. The assessee's reply was received on 09.06.2022, and the Revenue was required to complete the remaining steps within the surviving time limit. The notice under section 148 of the new regime, issued on 24.07.2022, was issued after the expiry of that surviving period and was therefore beyond jurisdiction.

Conclusion: The notice dated 24.07.2022 under section 148 of the Income-tax Act, 1961 is time-barred and bad in law; the reassessment proceedings and the assessment order passed in consequence are quashed.

Ratio Decidendi: Where a reassessment notice issued under the old regime is deemed to be a notice under section 148A(b), the Revenue can proceed only within the surviving limitation period computed from that deemed notice, and any notice under section 148 of the new regime issued beyond that period is time-barred and void.

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