Reassessment limitation under substituted section 148 and TOLA: belated notice was jurisdictionally invalid and reassessment failed.

A reassessment notice issued under section 148 for assessment year 2015-16 was treated as time-barred because the substituted reassessment regime applied and TOLA could extend time only where the relevant limitation remained protected. The Tribunal noted that, on the facts, the limitation for the assessment year expired on 31.03.2022, so a notice issued on 31.07.2022 fell beyond the surviving limitation period. Since a valid notice within time was necessary to assume jurisdiction, the reassessment proceedings were held unsustainable and the notice invalid. The reassessment order was quashed and the assessee's appeal succeeded.

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Issues: Whether the reassessment notice issued under section 148 of the Income-tax Act, 1961 on 31.07.2022 for assessment year 2015-16 was barred by limitation in the light of the substituted reassessment regime and the application of TOLA.

Analysis: The assessment year in question fell within the period governed by the substituted provisions relating to reassessment. The decisive question was whether the time available for issuance of notice survived when the notice under section 148 was issued on 31.07.2022. The Tribunal applied the Supreme Court's interpretation that, after 1 April 2021, the reassessment provisions had to be read with the substituted regime and TOLA could extend time only where the relevant limitation period fell within the protected window. On the facts, the limitation for the relevant assessment year expired on 31.03.2022, and the notice issued thereafter was beyond the surviving limitation. As the very assumption of jurisdiction depended on a valid notice within time, the reassessment proceedings could not stand.

Conclusion: The notice under section 148 was time-barred and invalid. The reassessment order was quashed, the assessee's appeal was allowed, and the Revenue's appeal failed.

Ratio Decidendi: A reassessment notice issued beyond the surviving limitation under the substituted reassessment provisions, as read with TOLA where applicable, is jurisdictionally invalid and liable to be set aside.

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