Reassessment limitation under the new regime: notice issued after the surviving period was held invalid and void ab initio.

A reassessment notice issued under the new regime was held time barred because the surviving limitation period had to be computed by excluding the interval between the deemed notice and supply of information, together with the statutory reply period, in line with the principle applied in Rajeev Bansal and the Supreme Court directions in Ashish Agarwal. On that computation, the permissible period expired before the notice dated 20-07-2022 was issued, so the notice was invalid and the consequential reassessment proceedings could not stand. The reassessment was therefore quashed as void ab initio in favour of the assessee.

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Issues: Whether the notice issued under section 148 of the Income-tax Act, 1961 on 20-07-2022 was barred by limitation and, if so, whether the reassessment proceedings were void ab initio.

Analysis: The assessment year involved was 2013-14. The reassessment notice had earlier been issued under the old regime on 07-06-2021, and the subsequent proceedings were undertaken pursuant to the Supreme Court directions in Ashish Agarwal. Applying the limitation principles explained in Rajeev Bansal, the period between the deemed notice and the supply of information, as well as the statutory reply period, had to be excluded while computing the surviving time for issuance of notice under the new regime. On that computation, the extended date for issuance of notice expired on 25-06-2022. The notice actually issued on 20-07-2022 was therefore beyond the permissible period.

Conclusion: The notice under section 148 was time barred and the reassessment proceedings were liable to be quashed as void ab initio; the legal ground was allowed in favour of the assessee.

Ratio Decidendi: Where a reassessment notice under the new regime is issued after the surviving limitation period computed by excluding the legally mandated intervals, the notice is invalid and the consequential reassessment cannot stand.

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