TaxTMI 
TaxTMI 
2025 (6) TMI 1627
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....ted the first ground which challenges the AO's jurisdiction to issue notice u/s 148 contrary to the mandate of the first proviso below section 149. Ground 2 - The notice u/s. 148 dated 19th April 2022, which was issued after expiry of six years from the end of the relevant assessment year, was contrary to the mandate of the first proviso below section 149 of the IT Act and hence invalid. Your appellant respectfully submits that the said notice u/s. 148 dated 19th April 2022 and consequent order u/s. 147 r.w.s. 144B dated 29th February 2024 are bad in law and should therefore be annulled." 2.1. In this appeal, essentially, the issue to be decided is on legal ground challenging the validity of notice issued u/s. 148 on account of being barred by limitation and consequent assessment order u/s. 147 r.w.s. 144B being bad in law. 3. We have heard both the parties who have made their extensive submissions on the issues relating to legal ground. We have also perused the judicial precedents relied upon, for which a legal compilation is placed on record. Assessee has also furnished a paper book containing 126 pages to corroboratively demonstrate the factual matrix relevant....
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....he argument made by the assessee is that notice u/s. 148, dated 19.04.2022 is barred by limitation since it has been issued after expiry of six years, from the end of the relevant Assessment Year, i.e., Assessment Year 2015-16, which is contrary to the mandate of the first proviso below section 149(1)(b) and therefore the impugned notice is invalid, bad in law, leading to the impugned assessment proceedings as well as the impugned assessment order, bad in law and liable to be quashed ab initio. 5. To delve on the issue in hand before us, let us take note of the provisions contained in section 149 under the new regime introduced by the Finance Act, 2021, prescribing limitation on issue of notice u/s. 148 of the Act. Section 149 of the Act reads as under: Time limit for notice. 149. (1) No notice under section 148 shall be issued for the relevant assessment year,- (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); [(b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of ....
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....earch under section 132 for which the last of authorisations is executed; or (c) a requisition made under section 132A, after the 15th day of March of such financial year, a period of fifteen days shall be excluded for the purpose of computing the period of limitation as per this section and the notice issued under clause (b) of section 148A in such case shall be deemed to have been issued on the 31st day of March of such financial year:] Provided also that for the purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee, as per showcause notice issued under clause (b) of section 14SA or the period during which the proceeding under section 148A is stayed by an order or injunction of any court, shall be excluded: Provided also that where immediately after the exclusion of the period referred to in the immediately preceding proviso, the period of limitation available to the Assessing Officer for passing an order under clause (d) of section 148A 30[does not exceed seven days), such remaining period shall be extended to seven days and the period of limitation under this sub-section shall be deemed t....
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....u/s. 148 for which a specific order shall be passed within the stipulated time. v. Thus, section 148A under the new regime of re-assessment is a provision brought on the statute which is in the nature of condition precedent to issuing of notice u/s. 148. 5.2. Also, first proviso to section 149 under the new regime introduced by the Finance Act, 2021 prescribed limitation on issuance of notice by taking into consideration the time limit available under the old regime for the relevant assessment year. First proviso to section 149 states, "Provided that no notice u/s. 148 shall be issued at any time in a case for the relevant Assessment Year beginning on or before 1st day of April, 2021, if a notice under section 148 or section 153A or section 153C could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this section or section 153A or section 153C, as the case may be, as they stood immediately before the commencement of the Finance Act, 2021" 5.3. This proviso to section 149 provided a defence and limitation on issuance of notices under the new regime of re-assessment relating t....
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....before 1 April 2021; (ii) if it is barred at the time when the notice is sought to be issued because of the "time limits specified under the provisions of 149(1)(b) of the old regime. Thus, a notice could be issued under Section 148 of the new regime for assessment year 2021-2022 and before only if the time limit for issuance of such notice continued to exist under Section 149(1)(b) of the old regime. ................ 49. The first proviso to Section 149(1)(b) requires the determination of whether the time limit prescribed under Section 149(1)(b) of the old regime continues to exist for the assessment year 2021-2022 and before. Resultantly, a notice under Section 148 of the new regime cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice. This also ensures that the new time limit of ten years prescribed under Section 149(1)(b) of the new regime applies prospectively. For example, for the assessment year 2012-2013, the ten year period would have expired on 31 March 2023, while the six year period expired on 31 March 2019. Without the proviso to Section 149(1)(b) of the new regime, ....
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....) of the old regime for any Assessment Year beginning on or before 01.04.2021, the notice cannot be issued even under the new regime. 7.1. Hon'ble Court took into consideration the stand of the Revenue to interpret the first proviso to section 149 of the Act to be applicable only for Assessment Years 2013-14 and 2014-15, i.e., for the Assessment Years where the period of limitation has already expired on 01.04.2021 which was held to be not correct because that would render the first proviso to section 149 under a new regime redundant and otiose. According to the Hon'ble Court, if such a stand of the Revenue is accepted then, it would amount to re-writing the proviso to section 149(1)(b). Hence such an interpretation as canvassed by the Revenue is clearly not permissible in law. Hon'ble Court thus, concluded that the first proviso to section 149(1)(b) is an exception to the period of limitation and provides for a restriction on the notices issued u/s. 148 which are issued for Assessment Years up to 2021-22 beyond a certain date. It also took into account the extension of time as contained in fifth and sixth proviso to section 149(1)(b) while concluding on the period o....