Reassessment limitation under tax law turned on TOLA exclusions and expired balance time, making the initiation time-barred.

Reassessment initiation for Assessment Year 2013-14 under Sections 148A(d) and 148 was examined against the limitation framework in Section 149(1) of the Income-tax Act, as affected by the Finance Act, 2021 and the relaxation under TOLA. The original period for issuing notice under Section 148 had expired, but the notice dated 31.05.2021 fell within the extended time available under TOLA. After excluding the period from notice issuance to the Ashish Agarwal decision, the Section 148A(b) notice period, and the assessee's response time, only thirty days remained to complete initiation. The impugned order and notice were issued after that balance period expired, so the reassessment was time-barred and invalid.

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Issues: Whether the reassessment initiation under Sections 148A(d) and 148 for Assessment Year 2013-14 was barred by limitation in view of Section 149(1) of the Income-tax Act, 1961 read with Section 3(1) of the Taxation and Other Laws (Relaxation of Certain Provisions) Act, 2020.

Analysis: The reassessment had to be tested on the basis of the limitation regime applicable to the relevant assessment year, as modified by the Finance Act, 2021 and the extension granted under TOLA. The original limitation for issuing notice under Section 148 had expired, but the notice issued on 31.05.2021 was within the extended period available under TOLA. The period after issuance of the notice, the interval up to the decision in Ashish Agarwal, the time taken for issuance of the Section 148A(b) notice, and the response period granted to the assessee were all required to be excluded while computing the balance limitation. After such exclusions, only thirty days remained for the Assessing Officer to complete the reassessment initiation process. The impugned order under Section 148A(d) and the consequential notice under Section 148 were issued after that balance period had expired.

Conclusion: The reassessment proceedings were time-barred and invalid; the challenge succeeded.

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