Validity of reopening notices under section 148/148A(b) and TOLA; appeal allowed due to jurisdictional and approval defects.

ITAT considered validity of reopening notices issued as section 148/148A(b) and whether the TOLA limitation regime applied; it found TOLA inapplicable for the assessment year where escaped income exceeded Rs. 50 lakh, so notices treated as section 148A(b) were invalid, and consequent orders under the re-opening provisions lacked jurisdiction. The tribunal also held that the assessing officer failed to obtain the prescribed prior approval from the competent authority under the post-amendment approval route, rendering the section 148A(b) order and subsequent section 148/147 actions invalid. Appeal was allowed.

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Issues: Whether the notice issued under Section 148 of the Income-tax Act, 1961 on 18.07.2022 for Assessment Year 2013-14 was barred by time limitation in view of Section 149 read with TOLA and the Supreme Court decision in PCIT v. Rajeev Bansal (2024).

Analysis: The judgement applied the principle that the assessing officer's time to issue a notice under section 148 of the new regime runs from the date the assessee's reply to the deemed show-cause (deemed SCN) is received, and must fit within the surviving time available as computed under Section 149 read with TOLA. The analysis relied on the computation method in Rajeev Bansal (supra) and comparable decisions which held that exclusions and the short surviving period permitted only a limited window for issuing reassessment notices; where the actual issuance falls outside that surviving window, the notice is time-barred.

Conclusion: Notice under Section 148 dated 18.07.2022 is barred by limitation and is quashed; appeal allowed in favour of the assessee.

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