Mandatory section 148A(d) deadline and section 153C procedure control reassessment based on third-party search material.

Section 148A(d) must be passed within its mandatory statutory deadline, and that limit is not extended by any surviving time for issuing notice under section 148; on the stated facts, the order was time-barred and the consequential notice was void. Where reassessment is based solely on third-party search material, the special procedure under section 153C applies, and sections 147/148 cannot be used to bypass it; in the stated facts, the reassessment lacked jurisdiction. The additions under sections 68 and 69A were also unsustainable because the record included sales invoices, ledger accounts, lorry receipts, confirmations and audited books, while the revenue did not reject the books or make a proper inquiry into the alleged unexplained credits.

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Issues: (i) whether the order under section 148A(d) was barred by limitation and the consequential notice under section 148 was without jurisdiction; (ii) whether, on the facts involving third-party search material, the Assessing Officer was bound to proceed under section 153C rather than sections 147/148; (iii) whether the additions made under sections 68 and 69A were sustainable on merits.

Issue (i): whether the order under section 148A(d) was barred by limitation and the consequential notice under section 148 was without jurisdiction.

Analysis: The limitation issue turned on the interaction between the internal deadline in section 148A(d) and the outer time available under the reassessment regime. The reply to the show-cause notice having been received on 20.06.2022, the statutory period under section 148A(d) expired one month from the end of that month. The later computation of a surviving period for issuance of notice under section 148 did not override the mandatory deadline for passing the section 148A(d) order. The order was passed after expiry of that deadline.

Conclusion: The order under section 148A(d) was time-barred, and the notice under section 148 issued on its basis was void ab initio.

Issue (ii): whether, on the facts involving third-party search material, the Assessing Officer was bound to proceed under section 153C rather than sections 147/148.

Analysis: The reopening rested exclusively on material found in a search on a third party. In the absence of a recorded satisfaction note by the Assessing Officer of the searched person and in the absence of any independent post-search material, the special machinery under section 153C was attracted. The general reassessment route under sections 147/148 could not be used to bypass that special code.

Conclusion: The reassessment proceedings under sections 147/148 were without jurisdiction and were quashed.

Issue (iii): whether the additions made under sections 68 and 69A were sustainable on merits.

Analysis: The assessee produced sales invoices, ledger accounts, lorry receipts, confirmations, and audited books to show that the first set of credits represented genuine trade receipts already recorded as sales. The second addition was made by a broad comparison of gross bank credits with disclosed turnover, without rejecting the books under section 145(3) or identifying specific unexplained credits. The further addition relating to loans also lacked any effective inquiry into the creditors and ignored the documentary record.

Conclusion: The additions under sections 68 and 69A were unsustainable and were deleted.

Final Conclusion: The jurisdictional challenges succeeded and the merits also favoured the assessee, so the reassessment and the connected additions could not survive.

Ratio Decidendi: The statutory deadline in section 148A(d) is mandatory and cannot be enlarged by the surviving-period calculation under the reassessment regime, and where reassessment is founded solely on third-party search material, the special procedure under section 153C must be followed rather than sections 147/148.

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