Reassessment limitation runs from the assessee's reply when no further time is sought; later opportunity does not extend validity.

Limitation for issuing a reassessment notice under Section 148 is discussed in the context of the post-transition reassessment regime. Where the assessee has replied to a deemed notice under Section 148A(b) and has not requested further time, the surviving limitation period is treated as running from the date of that reply. A later notice granting an additional opportunity does not extend that period. The text also explains that an appellate challenge based on limitation may be raised where the issue can be decided from existing records without fresh factual investigation. A notice issued after expiry of the surviving period is described as invalid, with consequential reassessment proceedings unable to continue.

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Issues: (i) whether the additional ground challenging the reassessment as barred by limitation could be admitted on the existing record; (ii) whether the notice issued under Section 148 of the Income-tax Act, 1961 on 27.08.2022 was beyond the surviving period and consequently invalid.

Issue (i): whether the additional ground challenging the reassessment as barred by limitation could be admitted on the existing record.

Analysis: The challenge to limitation arose from dates and documents already forming part of the record, including the original notice, the deemed notice under the post-Ashish Agarwal regime, the assessee's reply dated 15.06.2022, the later notice dated 21.07.2022, and the reply dated 26.07.2022. Since adjudication of the objection did not require investigation into fresh facts, the procedural objection to validity of reassessment was treated as capable of being raised at the appellate stage.

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

Issue (ii): whether the notice issued under Section 148 of the Income-tax Act, 1961 on 27.08.2022 was beyond the surviving period and consequently invalid.

Analysis: The original notice under Section 148 was issued on 05.05.2021, leaving a surviving limitation period of 56 days up to 30.06.2021. After the transition mandated by the new reassessment regime, the assessee furnished its reply on 15.06.2022 and sought dropping of the proceedings. The later notice dated 21.07.2022 did not arise from any request by the assessee for further time. The subsequent reply dated 26.07.2022 merely reiterated the earlier objection and requested personal hearing. In these circumstances, the relevant date for recommencement of the surviving period was 15.06.2022, not 26.07.2022. On that basis, the 56-day period expired on 10.08.2022, rendering the fresh notice under Section 148 issued on 27.08.2022 beyond limitation. Once the reopening notice was time-barred, the order under Section 147 read with Section 143(3) could not survive.

Conclusion: The notice under Section 148 of the Income-tax Act, 1961 issued on 27.08.2022 was barred by limitation, and the consequential reassessment order was invalid; this issue was decided in favour of the assessee.

Final Conclusion: The reassessment proceedings for Assessment Year 2016-17 were set aside on limitation, the additional ground succeeded, and the remaining grounds were left without surviving effect.

Ratio Decidendi: Where an assessee has already furnished its reply to a deemed notice under Section 148A(b) of the Income-tax Act, 1961 and has not sought further time, the surviving limitation period for issuance of notice under Section 148 runs from the date of that reply; a later notice granting further opportunity does not extend limitation, and a notice issued after expiry of that surviving period is void.

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