Limitation under first proviso to section 149(1) renders a section 148 notice time barred and invalidates subsequent assessment.

The article analyses whether a notice issued under section 148 for AY 2015-16 was time barred by the first proviso to section 149(1) after substitution by Finance Act, 2021, and concludes that the first proviso preserves the pre-existing six year limitation which expired before the notice date; therefore the notice was barred by limitation and subsequent proceedings and the assessment under section 147 read with section 144C(13) are invalid. Procedural exclusions for time computation and compliance with section 148A cannot retrospectively validate a notice already beyond the old regime's cut off.

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Issues: (i) Whether the notice issued under section 148 of the Income-tax Act, 1961 dated 08/04/2022 for AY 2015-16 was barred by limitation under the first proviso to section 149(1) of the Income-tax Act, 1961, and whether the consequent proceedings and assessment order under section 147 r.w.s. 144C(13) are invalid.

Analysis: The applicable statutory framework includes Section 149(1) of the Income-tax Act, 1961 as substituted by Finance Act, 2021, and the first proviso thereto which preserves the old regime's time limits for assessment years beginning on or before 01-04-2021. For AY 2015-16 the six-year limitation under the old regime expired on 31-03-2022. The notice under section 148 was issued on 08-04-2022, after that cut-off date. The exclusions for time computation relating to section 148A proceedings cannot operate to validate a notice that was already time-barred under the old regime as per the first proviso to section 149(1). Precedent and comparative authorities interpreting the proviso confirm that the first proviso acts as a threshold restricting retrospective application of extended limitation; procedural compliance with section 148A or reliance on later provisos does not revive a notice that was beyond the old law's limitation at the time of issuance.

Conclusion: The notice issued under section 148 of the Income-tax Act, 1961 dated 08/04/2022 for AY 2015-16 was barred by limitation under the first proviso to section 149(1) of the Income-tax Act, 1961; the subsequent proceedings and the assessment order passed under section 147 r.w.s. 144C(13) are invalid. The appeal is allowed in favour of the assessee.

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