Reassessment limitation under section 148 depends on actual escaped income; a time-barred notice cannot sustain reassessment.

A reassessment notice under section 148 was found time-barred because it was issued after the applicable limitation period for the relevant assessment year. The Tribunal treated the correct quantum of alleged escaped income as decisive, noting that the same deposit amount had been counted twice and the actual escapement was below the threshold relevant to the extended limitation under section 149(1)(b). Once the notice was held invalid, the reassessment proceedings founded on it could not survive and were quashed in favour of the assessee.

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Issues: Whether the notice issued under section 148 of the Income-tax Act, 1961 for the relevant assessment year was barred by limitation, and whether the reassessment could survive once the notice was found invalid.

Analysis: The notice was issued on 07.04.2022 for Assessment Year 2015-16. The assessment year ended on 31.03.2016, so the notice was beyond the permissible period under the amended limitation scheme. The record also showed that the escaped income considered by the Assessing Officer was below Rs. 50 lakh because the same deposit amount had been counted twice, which brought the case within the three-year limitation period under section 149(1)(b). The Tribunal followed the binding jurisdictional and persuasive authorities cited before it and treated the correct factual quantum of escapement as decisive for limitation. Once the notice was time-barred, the reassessment proceedings founded upon it could not be sustained.

Conclusion: The notice under section 148 was held to be invalid and barred by limitation. The reassessment order also fell with the notice, and the issue was decided in favour of the assessee.

Ratio Decidendi: For reopening under section 148, limitation must be tested on the basis of the correct and actual escapement disclosed by the record, and a notice issued beyond the applicable statutory period cannot be saved by counting non-existent or duplicated transactions.

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