Reassessment under Section 148 survives outside the post-2021 search scheme, while inadequate hearing can still vitiate assessment.

After the 2021 amendments, reassessment under Section 148 remains available where the case is not governed by the post-amendment search assessment scheme under Sections 153A and 153C, which applies only to searches or requisitions initiated up to 31.03.2021. Where the date of the alleged search is not established, a jurisdictional challenge to Section 148 proceedings may fail if the notice is otherwise issued within the amended reassessment framework and limitation under Section 149. Separately, an assessment order passed without effective opportunity because notices were sent to an unused email account and portal upload alone was insufficient was treated as violating natural justice, warranting quashing of the assessment and remand for fresh adjudication.

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Issues: (i) Whether the reassessment proceedings initiated under Section 148 of the Income-tax Act, 1961 were without jurisdiction because the case allegedly arose from a search and therefore ought to have proceeded only under the search assessment provisions; (ii) Whether the assessment order was vitiated for breach of natural justice and liable to be quashed with a remand.

Issue (i): Whether the reassessment proceedings initiated under Section 148 of the Income-tax Act, 1961 were without jurisdiction because the case allegedly arose from a search and therefore ought to have proceeded only under the search assessment provisions.

Analysis: The amended scheme under Sections 153A and 153C of the Income-tax Act, 1961, as substituted by the Finance Act, 2021 with effect from 01.04.2021, applies only where the search or requisition was initiated up to 31.03.2021. For searches initiated on or after 01.04.2021, those provisions do not govern the assessment of the searched person or other persons, and the reassessment machinery under Section 148 remains available, subject to the limitation contained in Section 149. The record did not disclose the date of the alleged search, and the challenge on jurisdiction could not succeed. The notice under Section 148 was issued on 31.03.2022 after the Section 148A procedure, and the proceedings were held to be within limitation and in accordance with the amended reassessment framework.

Conclusion: The jurisdictional challenge to the Section 148 proceedings failed and was decided against the assessee.

Issue (ii): Whether the assessment order was vitiated for breach of natural justice and liable to be quashed with a remand.

Analysis: The petitioner was unable to effectively participate in the reassessment proceedings because the notices were sent to an email account that had ceased to be used and were also uploaded on the portal. The explanation for non-participation was accepted as a reasonable cause. On that factual basis, the assessment order was found to have been passed without adequate opportunity, amounting to a violation of natural justice. The proper course was to set aside only the assessment order and remit the matter for a fresh decision, while preserving the assessee's right to urge all other defences except the jurisdictional objection to the Section 148 notice.

Conclusion: The assessment order was quashed and the matter was remitted for fresh assessment, in favour of the assessee on this issue.

Final Conclusion: The reassessment notice under Section 148 was sustained, but the assessment order was set aside for want of effective opportunity, and the matter was sent back for fresh adjudication on merits.

Ratio Decidendi: After the 2021 amendments, reassessment under Section 148 remains available for cases not governed by the post-amendment search assessment scheme under Sections 153A and 153C, and an assessment order passed without effective opportunity of hearing is liable to be quashed for breach of natural justice.

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