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 pre-amendment regime; it applies the test whether that six-year period subsisted when the notice issued and notes the concession in higher authority proceedings that notices issued after the pre-amendment six-year expiry could not be saved by the amended ten-year limit. Applying the saving/extension scheme, the notice postdating the six-year expiry is time-barred, the reassessment lacks jurisdiction and is quashed, rendering other merits academic.

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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.

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