Validity of reassessment proceedings under Section 153A: reopening beyond ten-year limit held invalid; writ allowed

Reopening assessments under the search-triggered reassessment provision must respect the ten-year computation from the first assessment year determined by the date of search; where the search occurred on 11.11.2022 and notice issued 31.03.2023, the tenth assessment year ends with 2014-15, so reopening for 2012-13 exceeded the ten-year limit and was invalid. The court held that limitation can be raised at any stage as a pure question of statutory interpretation, that assessing officers are expected to compute the ten-year period correctly, and exercised writ jurisdiction to set aside the reopening; writ petition allowed.

---

---

Issues: Whether the notice under Section 148 and the consequent reassessment order for Assessment Year 2012-13, issued following a search conducted on 11.11.2022, are barred by limitation because the relevant assessment year falls beyond the ten-year period computed under Explanation 1 to Section 153A read with Section 149 of the Income-tax Act, 1961.

Analysis: The statutory scheme distinguishes computation of the six-year block (Section 153A(1)(b)) from the ten-year outer limit (Explanation 1 to Section 153A). Explanation 1 fixes the starting point for the ten-year computation at the end of the assessment year relevant to the previous year in which the search is conducted. For a search on 11.11.2022 (financial year 2023-24), the search-related assessment year and the ten-year block are computed accordingly, producing a terminal assessment year of 2014-15 for the ten-year period; any earlier assessment year falls outside the ten-year limit. The proviso to Section 149(1) bars issuance of a Section 148 notice for assessment years beginning on or before 01.04.2021 if a notice could not have been issued at that time due to expiry of the limits under Section 149(1)(b) or Sections 153A/153C as they stood prior to Finance Act, 2021. Applying these provisions to the facts, Assessment Year 2012-13 lies beyond the ten-year outer limit as computed from the end of the search-related assessment year; reopening under Section 148 in respect of that year therefore exceeds the statutory limitation.

Conclusion: The notice under Section 148 and the consequent reassessment order for Assessment Year 2012-13 are barred by limitation and are quashed and set aside; decision in favour of the assessee.

---