Limitation on reassessment notices: a time-barred section 148 notice cannot be revived by later exclusion or extension clauses.

A reassessment notice under section 148 was issued after the six-year limit under the unamended section 149(1)(b) had expired. The first proviso to section 149, as introduced by the Finance Act, 2021, barred issuance of a notice where, on the commencement date of the new regime, such notice could not have been issued under the old law. Later exclusion and extension clauses in section 149(1) did not revive a notice already hit by that proviso. Because the foundational notice was invalid and time-barred, the reassessment proceedings and the assessment order based on it could not survive.

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Issues: Whether the notice issued under section 148 of the Income-tax Act, 1961 for the relevant assessment year was barred by limitation under section 149, and whether the reassessment order based on such notice could survive.

Analysis: The notice under section 148 was issued after the expiry of the six-year period available under the unamended section 149(1)(b) for the relevant assessment year. The first proviso to section 149, as introduced by the Finance Act, 2021, prohibited issuance of such notice where, on the date of commencement of the new regime, a notice could not have been issued under the unamended law. The later exclusion and extension clauses in section 149(1) were held not to revive a notice already barred by the first proviso. As the foundational notice itself was invalid, the reassessment proceedings and the assessment order based on it could not stand.

Conclusion: The reassessment notice was time-barred and without jurisdiction, and the assessment order was quashed in favour of the assessee.

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