Reassessment notice under Sections 147 and 148A(b) for AY 2016-17 held time-barred beyond six years

HC examined the validity of reassessment proceedings initiated under s.147 pursuant to a notice under s.148A(b) for AY 2016-17, issued under the post-2021 amended regime. Applying the law laid down in Manju Somani and the SC decision in Rajeev Bansal (LB), HC held that the maximum permissible period of six years from the end of AY 2016-17 expired on 31.03.2023. As the impugned notice was issued thereafter, it was barred by limitation. With the revenue concurring, HC set aside the reassessment notice.

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The petition challenges a notice dated 31.08.2024 issued under Section 148 of the Income Tax Act, 1961, and the antecedent notice under Section 148A(b) and order under Section 148A(d). Reliance was placed on this Court's decision in Manju Somani v. Income Tax Officer Ward-70(1) & Ors and the Supreme Court's decision in Union of India & Others v. Rajeev Bansal. The Rajeev Bansal passage was cited: "46. The ingredients of the proviso could be broken down for analysis as follows: (i) no notice under Section 148 of the new regime can be issued at any time for an assessment year beginning on or before 1 April 2021; (ii) if it is barred at the time when the notice is sought to be issued because of the 'time limits specified under the provisions of' 149(1)(b) of the old regime. Thus, a notice could be issued under Section 148 of the new regime for assessment year 2021-2022 and before only if the time limit for issuance of such notice continued to exist under Section 149(1)(b) of the old regime." The court applied the proviso to Section 149(1)(b), noting the six-year period for AY 2016-17 expired on 31.03.2023; the impugned notice dated 31.08.2024 was therefore barred by limitation and was set aside.

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