Reassessment limitation and income threshold ruling: recorded material must meet the statutory limit for extended notice jurisdiction.

Reassessment jurisdiction beyond the normal limitation period must rest on the income quantified in the recorded reasons, and the extended period under Section 149(1)(b) applies only if that material itself shows escaped income of at least the statutory threshold. Here, the notice under Section 148 for AY 2020-21 was issued after the normal time limit and was therefore barred by limitation under Section 149(1)(a). The recorded quantification did not meet the threshold for Section 149(1)(b), as the amounts noted totalled less than the required limit, so the extended period was unavailable. The notice, the Section 148A(3) order, and consequential proceedings were quashed.

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Issues: (i) Whether the notice issued under Section 148 of the Income-tax Act, 1961 for Assessment Year 2020-21 was barred by limitation under Section 149(1)(a); (ii) Whether the notice could be sustained under the extended period under Section 149(1)(b) on the basis that the escaped income amounted to or was likely to amount to Rs. 50,00,000/- or more.

Issue (i): Whether the notice issued under Section 148 of the Income-tax Act, 1961 for Assessment Year 2020-21 was barred by limitation under Section 149(1)(a).

Analysis: The outer limit for issuance of notice for the relevant assessment year had expired, and the notice was issued after the period permitted by Section 149(1)(a) read with the applicable proviso. The validity of the notice therefore depended entirely on whether the case fell within the extended time-limit regime.

Conclusion: The notice was barred by limitation under Section 149(1)(a).

Issue (ii): Whether the notice could be sustained under the extended period under Section 149(1)(b) on the basis that the escaped income amounted to or was likely to amount to Rs. 50,00,000/- or more.

Analysis: The Assessing Officer quantified the alleged escaped income at Rs. 36,78,000/- and Rs. 6,04,295/-, making a total of Rs. 42,82,295/-. The jurisdictional threshold under Section 149(1)(b) was not met on the basis of the material and quantification recorded in the order under Section 148A(3), and the revenue could not rely on figures beyond the recorded reasons to enlarge jurisdiction.

Conclusion: The extended period under Section 149(1)(b) was unavailable, and the notice could not be sustained.

Final Conclusion: The reassessment notice and the order under Section 148A(3) were set aside, and all consequential proceedings stood quashed.

Ratio Decidendi: Jurisdiction to issue a reassessment notice beyond the normal limitation period must be founded on the income quantified in the recorded reasons, and the extended limitation under Section 149(1)(b) is unavailable unless the recorded material itself shows escaped income meeting the statutory threshold.

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