Reassessment notice limitation under the Income-tax Act: notice issued beyond the extended statutory window was held invalid.

A reassessment notice under the Income-tax Act was held barred by limitation where the original notice, treated as a Section 148A(b) notice under the Supreme Court's binding directions, left only five days after statutory exclusions and the time allowed for material and response. That period stood extended to seven days under the applicable Fourth Proviso to Section 149(1), but the impugned notice was issued after the last permissible date. The note states that when the balance time available for issuing a reassessment notice falls below the minimum prescribed window after applying the statutory exclusions and deeming fiction, the notice must be issued within the extended statutory period, failing which it is invalid.

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Issues: Whether the notice issued under Section 148 of the Income-tax Act, 1961 for the assessment year 2014-15 was barred by limitation and liable to be set aside.

Analysis: The original notice issued within the extended time under the relaxation legislation was treated as a notice under Section 148A(b) in terms of the binding directions of the Supreme Court. After excluding the period required to be excluded under the statutory provisos and the time allowed for furnishing material and for the assessee's response, the remaining time for issuance of a notice under Section 148 was only five days, which stood extended to seven days under the Fourth Proviso to Section 149(1) as applicable at the relevant time. The impugned notice was, however, issued on 29.07.2022, beyond the last permissible date.

Conclusion: The notice was time-barred and invalid; the challenge succeeded in favour of the assessee.

Ratio Decidendi: Where the balance period available for issuance of a reassessment notice, after application of the statutory exclusions and deeming fiction under the reassessment regime, falls below the minimum prescribed period, the notice must be issued within the extended statutory window, failing which it is barred by limitation.

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