Limitation on reassessment notices: later notice exceeded preserved period and was quashed under TOLA-related concessions.

Reassessment notices for AY 2015-16 under Section 148 were held barred by limitation because the pre amendment six year limitation expired before the impugned notice; the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act's alterations did not save notices issued after the preserved period. The Tribunal applied the revenue concession recorded in Rajiv Bansal and subsequent judicial authorities to conclude notices issued on or after 1 April 2021 for the relevant year could not be sustained, and consequently quashed the July 2022 notice and reassessment proceedings.

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Issues: Whether the notice issued under Section 148 of the Income-tax Act, 1961 dated 29.07.2022 (and the proceedings based thereon) for Assessment Year 2015-16 is barred by limitation and/or not saved by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA), and consequently whether the notice and reassessment order must be quashed.

Analysis: The issue arises for Assessment Year 2015-16 where notices under Section 148 were issued originally on 29.06.2021 and subsequently on 29.07.2022. The application of TOLA and the altered limitation periods introduced by the Finance Act, 2021 were considered in the context of the concession recorded in the decision in Rajiv Bansal that, for Assessment Year 2015-16, all notices issued on or after 1 April 2021 would have to be dropped as they would not fall for completion during the period prescribed under TOLA. The revenue's recorded concession before the Hon'ble Supreme Court, subsequent appellate and High Court orders applying Rajiv Bansal, and later Supreme Court authority and related orders were relied upon. For AY 2015-16 the six-year limitation under the pre-amendment regime expired on 31 March 2022; a notice issued on 29.07.2022 therefore exceeded that limitation. In light of the revenue concession in Rajiv Bansal and consistent judicial decisions holding notices issued on/after 1 April 2021 for AY 2015-16 to be impermissible or to be dropped, the notice dated 29.07.2022 cannot be sustained. The Tribunal followed these precedents and the concession to determine that the notice was barred by limitation and not saved by TOLA for the relevant assessment year.

Conclusion: The notice under Section 148 dated 29.07.2022 and the reassessment proceedings founded thereon are barred by limitation and are quashed; the appeal is allowed in favour of the assessee.

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