Time bar on reassessment: compute surviving limit after deemed notice and reply exclusion; notice beyond that limit is invalid.

Application of the post 2021 reassessment procedure requires computing a surviving time limit from the deemed initial notice date, subtracting the assessee's allotted reply period, and applying an extension to a minimum seven days where the surviving period is shorter; under that principle a notice issued after the computed surviving time limit is invalid and any resulting reassessment is liable to be quashed. On the facts the deemed notice dated 30.06.2021, expiry of the reply period and exclusions produced a surviving limit ending 19.06.2022, whereas the subsequent notice dated 28.07.2022 fell outside that limit, rendering the reassessment invalid.

---

---

Issues: Whether the notice under section 148 dated 28.07.2022 is time barred and the reassessment initiated thereon is invalid.

Analysis: The Tribunal considered the reassessment sequence under the new regime (issue of notice under section 148A(b), response period, order under section 148A(d), and issuance of notice under section 148) and the effect of the Supreme Court decisions treating certain section 148 notices issued between 01.04.2021 and 30.06.2021 as deemed section 148A notices. Applying the principles in the cited decisions, the period available to the Assessing Officer to issue a notice under section 148 is the surviving time limit computed from the date of the deemed notice to 30.06.2021, plus the exclusion for the period allowed to the assessee to reply under the provisos to section 149. Where the surviving period after exclusions is less than seven days, it is extended to seven days. On the facts the original notice was dated 30.06.2021 (deemed to be under section 148A), the assessee had until 12.06.2022 to reply to the section 148A(b) notice which expired without reply, and the extended surviving period for issuance of a section 148 notice thus ended on 19.06.2022. The AO issued the section 148 notice on 28.07.2022, beyond the computed surviving time limit. The Tribunal held that issuance beyond the surviving time limit renders the notice invalid and the consequent reassessment order liable to be quashed.

Conclusion: The notice under section 148 dated 28.07.2022 is time barred; the reassessment order is quashed and the assessee's appeal is allowed.

---