Reassessment action initiated based on Section 148 notice and ...

Tax reassessment notice invalid due to time limitation under amended law.

Case Laws     Income Tax

September 13, 2024

Reassessment action initiated based on Section 148 notice and subsequent Section 148A(b) notice violated the First Proviso to Section 149(1) and was barred by the limitation period. The reassessment action commenced post April 1, 2021, was subject to the amended provisions. The Supreme Court in Ashish Agarwal held that notices issued under unamended provisions should be treated as notices u/s 148A(b), subject to compliance with procedural requirements and defenses available under amended provisions, including Section 149. However, the terminal date of March 31, 2022, for commencing reassessment had passed when the Section 148A(b) notice was issued on May 27, 2022, contravening the First Proviso to Section 149(1). Ashish Agarwal cannot be construed as depriving the assessee of objections based on Section 149(1) or reinventing proceedings unchallenged earlier. The May 27, 2022 notice cannot be viewed as a continuation or substitution of the original Section 148 notice, as no legal challenge was instituted against the original notice, and no court order interdicted the reassessment action. The assessing officer failed to take corrective action despite being apprised of the amended procedure. Consequently, the impugned notice u/s.

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