Reassessment limitation under section 149 barred revival of a time-barred section 148 notice, invalidating the reassessment.

Delay in filing a cross objection may be condoned on sufficient cause, and a purely legal jurisdictional challenge to reassessment can be admitted even if not separately adjudicated earlier. On limitation, a notice under section 148 issued for assessment year 2015-16 after the expiry of the period available under the earlier reassessment regime could not be saved by the amended section 149 framework. The notice was therefore treated as barred by limitation, rendering the reassessment invalid. The ratio stated is that, for assessment years governed by the old limitation regime, a time-barred reassessment notice cannot be revived by later amended time limits.

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Issues: (i) Whether the 3-day delay in filing the cross objection was liable to be condoned; (ii) whether the additional ground challenging the validity of the reassessment notice could be admitted; and (iii) whether the notice issued under section 148 of the Income-tax Act, 1961 for the relevant assessment year was barred by limitation, vitiating the reassessment.

Issue (i): Whether the 3-day delay in filing the cross objection was liable to be condoned.

Analysis: The delay was supported by an affidavit explaining that the office of the Secretary had fallen vacant on retirement and the cross objection was filed after the new incumbent took charge. The explanation was treated as showing sufficient cause and the delay was held to be unintentional.

Conclusion: The delay was condoned in favour of the assessee.

Issue (ii): Whether the additional ground challenging the validity of the reassessment notice could be admitted.

Analysis: The jurisdictional challenge had already been raised before the first appellate authority, but it had not been adjudicated because the appeal was decided on merits. As the question went to the root of the reassessment and was purely legal, it was admitted for consideration.

Conclusion: The additional ground was admitted in favour of the assessee.

Issue (iii): Whether the notice issued under section 148 of the Income-tax Act, 1961 for the relevant assessment year was barred by limitation, vitiating the reassessment.

Analysis: The notice was issued on 04.04.2022 for assessment year 2015-16. Applying the amended reassessment framework and the first proviso to section 149(1), the limitation available under the unamended regime had already expired before the notice was issued. The tribunal followed binding jurisdictional and coordinate-bench precedent that the new limitation regime cannot revive a notice already barred under the old regime for the relevant assessment year.

Conclusion: The notice under section 148 was barred by limitation and the reassessment was invalid, in favour of the assessee.

Final Conclusion: The reassessment failed on the jurisdictional issue of limitation, so the Revenue's appeal did not survive and the assessee obtained relief on the cross objection.

Ratio Decidendi: For assessment years governed by the earlier limitation regime, a reassessment notice issued after expiry of the permissible period cannot be validated by the amended time limits under section 149, and such a barred notice vitiates the reassessment.

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