2025 (12) TMI 1799 - AT - Income Tax

Limitation in reassessment: notice issued after expiry of the pre-amendment six-year bar held time-barred and jurisdictionally invalid.

The article addresses whether a reassessment notice issued 22.07.2022 for assessment year 2015-16 was barred by the six-year limitation existing under the ... Validity of reassessment proceedings - Reopening barred by limitation - notice u/s 148 beyond six year period - application of Rajiv Bansal on interplay of amended sections 148/149 and TOLA- Validity of notice under section 148 issued on 22.07.2022 for A.Y. 2015-16 - HELD THAT:- The Tribunal held that the question was whether the notice under section 148 dated 22.07.2022 for A.Y. 2015-16 was time barred. Applying the test articulated by the Hon'ble Supreme Court in Union of India v. Rajiv Bansal [2024 (10) TMI 264 - SUPREME COURT (LB)] the amended ten year limitation in section 149(1)(b) operates prospectively and, for earlier assessment years, a notice under the new regime is valid only if the six year period under the old regime remained alive when the notice was issued. It was undisputed that the six year period for A.Y. 2015 16 expired on 31.03.2022. Consequently, the notice issued on 22.07.2022 was beyond that six year period and therefore without jurisdiction. Notice dated 22.07.2022 under section 148 for A.Y. 2015-16 is barred by limitation and the reassessment proceedings initiated thereunder are quashed. Final Conclusion: The appeal is allowed: the reassessment proceedings arising from the section 148 notice dated 22.07.2022 for A.Y. 2015 16 are annulled as time barred under the test in Rajiv Bansal[2024 (10) TMI 264 - SUPREME COURT (LB)] Issues: Whether the notice issued under Section 148 dated 22.07.2022 for Assessment Year 2015-16 was barred by limitation and therefore the reassessment proceedings initiated thereunder are without jurisdiction.Analysis: The interplay between the old and amended regimes of Sections 148 and 149 of the Income-tax Act, 1961, and the saving/extension scheme under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 is determinative. The test applied is whether the six-year limitation under the old regime subsisted at the time of issuance of the notice. For A.Y. 2015-16 the six-year period expired on 31.03.2022. Notices issued on or after 01.04.2021 for A.Y. 2015-16 were conceded by Revenue before the Hon'ble Supreme Court in Union of India v. Rajiv Bansal to have to be dropped as not falling for completion within the TOLA period. Coordinate Tribunal and High Court decisions, and subsequent Supreme Court rulings, apply this concession and hold that the extended ten-year limit in Section 149(1)(b) operates prospectively and cannot validate notices issued after the six-year period had expired for relevant prior years. Applying this framework, the notice dated 22.07.2022 falls after the expiry of the six-year limit and is therefore time-barred; consequently, the reassessment proceedings founded on that notice lack jurisdiction and must be quashed. Other merits issues become academic once reassessment is annulled on jurisdictional grounds.Conclusion: The notice under Section 148 dated 22.07.2022 for A.Y. 2015-16 is time-barred and without jurisdiction; the reassessment proceedings pursuant thereto are quashed and the appeal of the assessee is allowed.