Validity of reassessment notices under Section 148/149 new regime: retrospective ten-year limit restrained; notice quashed for AY 2017-18

Validity of reassessment notices under the new reassessment regime turns on whether the pre-existing time limit continued to exist for the relevant assessment year; the first proviso requires determination of continuity of the earlier six-year time bar before a notice under the new regime can be issued, thereby preventing retrospective application of the extended ten-year limit to years where the six-year period had already expired. This interpretation limits reopening powers and protects assessee interests. Applying this test, the notice issued for the specified assessment year was invalidated and the impugned proceedings were set aside.

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The High Court allowed the petition, setting aside the impugned order and notice issued under Section 148 for the assessment year 2017-18 due to being beyond the period of limitation as per the first proviso to Section 149(1) of the Income Tax Act, 1961. The decision was influenced by the Supreme Court's interpretation of the proviso in a recent case.

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