Reassessment jurisdiction and limitation fail where third-party search material triggers the section 148A proviso and threshold conditions are unmet.

Reopening based on information from a search under section 132 in a third party's case falls within the proviso to section 148A, so the section 148A procedure cannot be used to confer jurisdiction or cure the defect in initiation. Where the alleged escapement is below the monetary threshold required for the extended limitation under section 149(1)(b), the extended period is unavailable and a notice issued after expiry of the normal three-year period is time-barred. The reassessment was therefore quashed on both jurisdictional and limitation grounds.

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Issues: (i) Whether reassessment proceedings initiated under section 148A could be sustained when the information relied upon emanated from a search under section 132 in the case of a third party and the case fell within the proviso to section 148A; (ii) Whether the notice under section 148 and the reassessment were barred by limitation under section 149(1)(b) where the alleged escapement was below the prescribed threshold.

Issue (i): Whether reassessment proceedings initiated under section 148A could be sustained when the information relied upon emanated from a search under section 132 in the case of a third party and the case fell within the proviso to section 148A.

Analysis: The reopening was founded on information stated to have arisen from a search conducted in the case of another person. Once the material used by the Assessing Officer was traceable to such a search, the case fell within the exception carved out in the proviso to section 148A. In such a situation, the procedure under section 148A was not applicable, and the issuance of notice under section 148A(b) and the passing of an order under section 148A(d) did not confer jurisdiction or cure the defect in assumption of jurisdiction.

Conclusion: The reassessment initiation under section 148A was without jurisdiction and invalid.

Issue (ii): Whether the notice under section 148 and the reassessment were barred by limitation under section 149(1)(b) where the alleged escapement was below the prescribed threshold.

Analysis: The alleged escapement related only to the deduction of Rs. 2,00,000 under section 80GGC, which was far below the monetary threshold of Rs. 50,00,000 prescribed for invoking the extended limitation period. For the relevant assessment year, the three-year period had already expired when the notice was issued, and the extended period could not be invoked in the absence of the statutory threshold being met.

Conclusion: The notice under section 148 and the reassessment were barred by limitation.

Final Conclusion: The reassessment proceedings were quashed on jurisdictional and limitation grounds, and the appeal succeeded.

Ratio Decidendi: Where reassessment is sought on information falling within the proviso to section 148A, that procedure cannot be invoked to confer jurisdiction, and the extended limitation under section 149(1)(b) is unavailable unless the statutory monetary threshold is satisfied.

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