What is the time limit for issuing notice under section 148 i.e. income escaping assessment?

Ans. Time limit for issuance of notice under Section 148 of the Income-tax Act:

Particulars	Time Limit
In general	No notice shall be issued if 3 years have elapsed from the end of the relevant assessment year.
Where the Assessing Officer has in his possession books of account or other documents or evidence which reveals that the income chargeable to tax, represented in the form of: (i) An Asset; (ii) Expenditure in respect of a transaction or in relation to an event or occasion; or (iii) An entry or entries in the books of account. which has escaped assessment amounts to or is likely to amount to Rs. 50 lakhs or more.	Notice can be issued beyond a period of 3 years but not beyond the period of 10 years from the end of the relevant assessment year.

Note:

1. Notice under  Section 148 of the Income-tax Act cannot 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,  Section 153A,  Section 153C couldn't have been issued at that time on account of being beyond the time limit specified under the provisions  Section 149(1)(b) or  Section 153A or  Section 153C, as it stood immediately before the amendment of the Finance Act, 2021.

2. The Finance Act 2023 has inserted a third and fourth proviso to Section 149(1) to provide that 15 days will be excluded while computing the limitation period.

a. As per third proviso, 15 days will be excluded while computing the limitation period under Section 149 for the issue of notice under Section 148 if the following conditions are satisfied:

i. A search is initiated, the last warrant is executed, or requisition is made after 15th March of the financial year; and

ii. Notice under section 148 is required to be issued for an assessment year on or before 31st March of that financial year.

b. As per fourth proviso, 15 days will be excluded while computing the limitation period under section 149 for the issue of notice under section 148A(b) if the following conditions are satisfied:

i. The information received by the AO emanates from a statement recorded or documents impounded under summons or survey, as the case may be, on or before 31st March of the financial year; and

It should be in consequence of a search initiated, the last warrant executed, or requisition

ii. made after 15^th March of that financial year.

If the above conditions are satisfied, the notice so issued under Section 148/ Section 148A(b) shall be deemed to have been issued on 31^st March of such financial year.

3. To compute the period of limitation for issuance of notice under new Section 148, the time or extended time allowed to the assessee in providing an opportunity of being heard or period during which such proceedings before issuance of notice under Section 148 are stayed by an order or injunction of any court, shall be excluded. If after excluding such period, time available to the Assessing Officer for passing order, about fitness of a case for issue of  Section 148 notice, is 7 days or less, the remaining time shall be extended to 7 days.

Further, the Finance Act, 2022 has introduced sub-section (1A) to  Section 148, w.e.f., Assessment Year 2022-23, to provide that if such escaped income, represented in the form of asset or expenditure in respect of transaction, event or occasion, is spread over more than 1 year and the total escaped income in all these years is Rs. 50 lakhs or more, then AO gets jurisdiction to issue a notice under Section 148 for all those years.