SIVARAM LAKSHMI,CHENNAI vs. ITO, NCW-19(4),, CHENNAI

The assessee is an individual and did not file the return of income for the AY 2015-16. The A.O received information that the assessee is having

The Ld. Authorized Representative (AR) of the assessee submitted that if the legal contentions raised with regard to the notice u/s.148 of the Act being barred by limitation (ground No.5) is considered and adjudicated in favour of the assessee then the other grounds would become academic. Accordingly, we proceed with adjudicate the ground raised with regard to the notice u/s. 148 being barred by limitation.

The contention of the Ld. AR at the outset is that the notice u/s. 148 issued on 04.04.2022 for AY 2015-16 is beyond the time limit of six years and therefore barred by limitation as per the first proviso to the un-amended provisions of section 149(1) as has been confirmed by the decision of the Hon'ble Supreme Court in the case of Rajeev Bansal [2024] (SCC online 754). The ld AR further submitted that the coordinate bench has been consistently holding that the notice u/s.148 issued beyond six years is not valid by placing reliance on the decision of the Hon'ble Supreme Court. Accordingly it was argued that the issue is covered by the judicial precedence.

The Ld DR on the other hand vehemently argued that the decision of Hon'ble Supreme Court is misquoted and that the decision did not qualify any notice on limitation only on procedure. The Ld DR further argued that if the

We heard the parties and perused the material on record. We will first look at the following observations of the Hon'ble Supreme Court in the case of Rajeev Bansal (supra) with regard to validity of notices issued for AY 2015-16 issued under the old regime – 19. Mr N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue: (a) to (e)**** (f). The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA; ****** 46. The ingredients of the proviso could be broken down for analysis as follows: (i) no notice under section 148 of the new regime can be issued at any time for an assessment year beginning on or 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, the Revenue could have had the power to reopen assessments for the year 2012-2013 if the escaped assessment amounted to Rupees fifty lakhs or more. The proviso limits the retrospective operation of Section 149(1)(b) to protect the interests of the assesses.”

The Hon'ble Supreme Court while dismissing the SLP filed by Revenue in the case of ACIT vs. Nehal Ashit Shah in SLP (Civil) Diary No(s). 57209/2024, dated 04.04.2025 held that impugned issued does not survive for further consideration. While holding so, Hon'ble Court noted in para 5 as under: "5. In this regard, reference could also be made to paragraph 19(e) and (f) in the case of Union of India vs. Rajeev Bansal, Civil Appeal No.8629 of 2024 on 03.10.2024 (2024 SCC ONLINE 754) under which the learned Additional Solicitor General for India has made a concession insofar as the assessment year 2015-16 is concerned."

The above view was again reiterated by the Hon’ble Supreme Court in Deepak Steel and Power Ltd. vs. CBDT[2025] 476 ITR 369 (SC) by stating as under; "5. As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, all notices issued on or after 1st April, 2021 will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provisions Act, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021".

The Hon'ble Supreme Court in a recent decision dated 04.05.2026 in the case of ITO vs. Shri Sai Kumar Mateti (Civil Appeal No.8682 of 2024) has once again reiterated the above stand by holding that: “5. There is no quarrel that if the instant cases are found to pertain to Assessment Year 2015-16, then the impugned notices are liable to be struck down outrightly in terms of the concession on behalf of the Department recorded in paragraph 19 (f) of Rajeev Bansal (supra) and reiterated before us by the learned Additional Solicitor General of India. 6. However, if it is found that these cases pertain to an assessment year other than 2015-16, the respondent-assessees shall be entitled to raise all the contentions that have been permitted by this Court vide order dated 10.04.2026. Ordered accordingly.

Therefore in our considered view, the issue of validity of notice u/s.148 issued after 01.04.2022 is no longer res-integra and accordingly unable to appreciate the arguments of the Ld DR. Section 149(1) of the Act contain the provisions with regard to the time limit for issue of notice under section 148 of the Act and the relevant provisions applicable for the year under consideration read as under – 149 - Time limit for notice. (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 account or other documents or evidence which reveal 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 fifty lakh rupees or more: Provided that no notice under section 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

The time limits for issue of notice under section 148 of the Act were amended as above w.e.f. 01.04.2021. Prior to the amendment the relevant provisions of section 149(1) of the Act read as under – 149 - Time limit for notice. (1) No notice under section 148 shall be issued for the relevant assessment year,— (a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b) or clause (c); (b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has

The time limit for issue of notice under section 148 of the Act was revised with effect from 01.04.2021 and the legislature in order to make the amendment prospective introduced the first proviso to section 149(1). In view of above discussion both on facts and law including the judicial precedence, we hold that notice for A.Y. 2015-16 issued on 04.04.2022 u/s 148 of the new regime is barred by limitation. The resulting impugned reassessment proceedings as well as the impugned reassessment order are therefore bad in law and liable to be quashed.

In the result, the appeal of the assessee is allowed.