Reassessment notice beyond surviving limitation period was time barred and quashed after deemed notice treatment

A reassessment notice issued under the old regime and treated as a deemed notice under the new regime must be followed by completion of section 148A(d) proceedings and a fresh section 148 notice within the surviving time left under the original limitation period. On the facts, only two days of limitation remained up to 30.06.2021, but the section 148 notice was issued on 28.07.2022, well beyond that balance period. The notice was therefore time barred and quashed, and the reassessment proceedings and reassessment order were treated as non est.

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Issues: (i) Whether the notice issued under section 148 on 28.07.2022, after the reassessment process initiated on the basis of the deemed notice regime, was barred by limitation under the surviving time principle.

Analysis: The reassessment notice originally issued under the old regime was treated as a deemed notice under the new regime. The governing principle, as applied, was that the clock for the Revenue begins after the assessee's reply period expires, and the Assessing Officer must then complete the steps under section 148A(d) and issue notice under section 148 within the balance or surviving time available under the old limitation period. On the facts, the surviving time was only two days, computed up to 30.06.2021, and the subsequent notice issued on 28.07.2022 fell well beyond that surviving period.

Conclusion: The notice under section 148 dated 28.07.2022 was held to be time barred and was quashed. The reassessment proceedings and reassessment order were consequently treated as non est, and the decision was in favour of the assessee.

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