Validity of reopening of assessment limitation: computation of six- and ten-year periods clarified; reopening beyond ten years barred.

Statutory prescription distinguishes computation for six-year and ten-year limitation periods for reopening assessments under pre-Finance Act, 2021 regime. The ten-year period is reckoned from the end of the assessment year pertaining to the previous year in which the search was conducted, while the six-year window is computed differently; applying this method to a search dated 09.05.2024 places the impugned earlier assessment year beyond the ten-year span and renders reopening barred by limitation, resulting in quashing of the notice issued under the reassessment provision and allowing relief to the assessee.

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Issues: Whether the notice issued under Section 148 of the Income-tax Act, 1961 for Assessment Year 2015-16 is time-barred having regard to a search conducted on 09.05.2024 and the computation of the six-year and ten-year periods under Section 153A/153C and Section 149 (old regime).

Analysis: The Court applied Section 152(3) to hold that, because the search took place on 09.05.2024, the pre- Finance (No.2) Act, 2024 regime of Sections 147151 (and the then wording of Section 149) governs. Section 153A(1)(b) prescribes that the six assessment years are the six years immediately preceding the assessment year relevant to the previous year in which the search is conducted; Explanation 1 to Section 153A prescribes that the ten assessment years are to be computed from the end of the assessment year relevant to the previous year in which the search is conducted. The Court adopted the established construction that the statute uses different starting points for the six-year block and the ten-year block: the six years are counted immediately preceding the search assessment year (excluding the search assessment year), whereas the ten-year period is reckoned backwards from the end of the assessment year relevant to the previous year in which the search was conducted (thus including the search assessment year in the ten-year computation). Applying these rules to a search in Financial Year 2024-25 (search assessment year AY 2025-26), the ten-year block terminates at AY 2016-17 and does not extend to AY 2015-16. The Court therefore found that issuance of a Section 148 notice for AY 2015-16 falls beyond the ten-year outer limit as it stood immediately before the Finance Act, 2021.

Conclusion: The notice dated 31.03.2025 issued under Section 148 for Assessment Year 2015-16 is quashed as time-barred; the writ petitions are allowed (decision in favour of the assessee).

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