2026 (2) TMI 703 - AT - Income Tax

Time Bar of Reassessment Notices: notice issued after the surviving time limit is invalid, quashing resultant proceedings.

A notice under section 148 issued after the surviving time limit is void where the computation of the extended due date, applying the exclusion of the ... Validity of reopening of assessment - date of issuance of section 148 notices under the old regime - period of limitation u/s 149 - scope of period prescribed under TOLA - extended due date for issuance of notice u/s 148 HELD THAT:- In view of the observation in the case of Rajeev Bansal [2024 (10) TMI 264 - SUPREME COURT (LB)] the extended due date for issuance of notice u/s 148 of the Act expired on 25-06-2022 and since, the notice is u/s 148 of the Act is issued on 20-07-2022 the said notice is to be treated as time barred by limitation and consequentially reassessment proceedings would be liable to be quashed as void ab initio. Respectfully following the decision of the Hon’ble Supreme Court, we hold that the notice issued u/s 148 of the Act on 20-07-2022 is time barred by limitation. Accordingly the legal issue raised by the assessee is allowed. Issues: Whether the notice issued under section 148 of the Income-tax Act, 1961 on 20-07-2022 is time-barred and therefore the reassessment proceedings are void ab initio.Analysis: The notice under section 148 was originally issued within the extended timelines under Notifications dated 31-03-2021 and 27-04-2021 but the Assessing Officer issued a fresh notice under section 148 on 20-07-2022 after compliance steps following directions in Union of India v. Ashish Agarwal. The legal framework requires exclusion of the period from deemed issuance of the old-regime notices until supply of relevant information and material to the assessee, together with the two-week period allowed for reply, and thereafter the assessing officer must complete the mandatory steps under section 149/149A within the surviving time limit. Applying the principle in Rajeev Bansal (Supreme Court) and the computation method illustrated therein, the extended due date for issuing a notice under section 148 expired on 25-06-2022; any notice issued after that date falls outside the surviving time limit.Conclusion: The notice issued under section 148 on 20-07-2022 is time-barred; the reassessment proceedings arising from that notice are quashed and the legal ground is allowed in favour of the assessee.