Reassessment limitation under the relaxation framework barred notices for assessment year 2015-16 issued after 01.04.2021.

A reassessment notice for assessment year 2015-16 issued on or after 01.04.2021 was held to be beyond the extended limitation period under the relaxation framework. The Tribunal followed the Supreme Court's position that such notices could not survive for that assessment year, and therefore treated the notice under section 148, the order under section 148A(d), and the consequential assessment order as unsustainable. The reassessment was quashed on limitation grounds, and the merits grounds became academic.

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Issues: Whether the reassessment proceedings initiated for assessment year 2015-16 pursuant to notice issued under section 148 of the Income-tax Act, 1961, and the order under section 148A(d) were barred by limitation in view of the Supreme Court ruling on the relaxation period under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.

Analysis: The notice under section 148 was issued on 13.04.2022 for assessment year 2015-16, i.e. after 01.04.2021. The governing Supreme Court decision had considered the effect of the relaxation legislation on reassessment timelines and recorded that, for assessment year 2015-16, notices issued on or after 01.04.2021 were required to be dropped as they would not fall within the extended limitation period. The Tribunal followed that binding position and treated the reassessment notice, the order under section 148A(d), and the consequential assessment order as unsustainable.

Conclusion: The reassessment proceedings were barred by limitation and were quashed.

Final Conclusion: The assessee succeeded on the jurisdictional challenge, and the merits grounds were rendered academic.

Ratio Decidendi: Where a reassessment notice for assessment year 2015-16 is issued after 01.04.2021, it is barred by limitation under the relaxation framework and cannot sustain subsequent reassessment action.

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