VIDYASAGAR INSTITUTE OF TECHNICAL STUDIES,BHUBANESWA vs. EXEMPTION WARD, BBN, BHUBANESWAR

At the outset, ld. AR submitted that the solitary issue involved in the appeal of the assessee is regarding the validity of issue of notice u/s.148 of the Act. Ld. AR further submitted that the notice issued by the ld. AO u/s.148 of the Act is barred by limitation and, therefore, invalid in law. Inviting attention to the copy of the notice issued u/s.148 of the Act placed at page No.64 & 65 of the paper book, the ld. AR submitted that the relevant assessment year involved is A.Y.2013-2014. It was submitted that the impugned notice u/s.148 of the Act has been issued on 30.06.2022, which is beyond six years from the end of the relevant assessment. The ld. AR contended that as per the provisions of Section 149 of the Act, applicable to the relevant assessment year, the notice u/s.148 of the Act could not have been issued after the expiry of six years from the end of the relevant assessment year. Therefore, the impugned notice u/s.148 of the Act dated 30.06.2022 is clearly time barred. It was further submitted that since the reassessment proceedings are founded on invalid notice, the entire assessment order passed by the ld. AO is liable to be quashed. Accordingly, ld. AR prayed that the assessment be set aside/quashed on the ground that the notice u/s.148 of the Act is barred by limitation.

Per Contra, ld. Sr. DR submitted that the assessee had not complied with the notice issued during the assessment proceedings before the AO as well as during the appellate proceedings before the ld. CIT(A). Ld. Sr. DR supported the order of the lower authorities and submitted that in view of the non-cooperation of the assessee, the action of the ld. AO in completing the assessment cannot be faulted. Therefore, he prayed that the order of the ld. CIT(A) confirming the reassessment be upheld.

We have considered the rival submissions and perused the material available on record. The solitary issue before us for consideration is whether the notice issued u/s.148 of the Act dated 30.06.2022 for assessment year 2013-2014 is within the period of limitation prescribed under the Act. In this regard, we have gone through the impugned notice issued u/s.148 of the Act placed at page Nos.64 & 65 of the paper book which is to the following the effect :-

On perusal of the above notice, it is evident that the relevant assessment year involved is assessment year 2013-2014 and the date of issue of notice u/s.148 of the Act is dated 30.06.2022. As the relevant assessment year in present appeal is A.Y.2013-2014, which is prior to Assessment Year beginning on or after 01/04/2021, in accordance with the first proviso to Section 149 of the Act, the provisions of Section 149 of the Act which was existing immediately before the amendment made by the Finance Act, 2021 w.e.f 01.04.2021 will be applicable in the present case. Therefore, it is crucial to go through the provision of Section 149 of the Act, which is applicable for the relevant assessment year, which is to the following effect:- Section - 149 Time limit for notice. 149. (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 escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year; (c) if four years, but not more than sixteen years, have elapsed from the end of the relevant assessment year unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment. Explanation.—In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section. (2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151. (3) If the person on whom a notice under section 148 is to be served is a person treated as the agent of a non-resident under section163 and the assessment, reassessment or recomputation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of six years from the end of the relevant assessment year. Explanation.—For the removal of doubts, it is hereby clarified that the provisions of sub-sections (1) and (3), as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012.

On perusal of the provisions of Section 149 of the Act, it is evident that the notice u/s.148 of the Act could not be issued after the expiry of six years from the end of relevant assessment year. In the present case, six years from the end of the relevant assessment year expired on 31.03.2020, however, the impugned notice u/s.148 of the Act has been issued on 30.06.2022, which is clearly beyond the prescribed limitation period. Further, the contention of the ld. Sr. DR regarding non-compliance by the assessee cannot cure a jurisdictional defect arising from the issuance of time barred notice. It is well settled that reassessment proceedings initiated on the basis of notice issued beyond the period of limitation is void ab initio and liable to be quashed. Since the main foundation of the reassessment proceedings, namely the notice issued u/s.148 of the Act, is invalid in law, the consequential assessment order passed by the ld. AO cannot be sustained. Accordingly, we hold that the notice issued u/s.148 of the Act dated 30.06.2022 is barred by limitation and is invalid. Consequently, the reassessment order passed pursuant thereto is quashed.

In the result, appeal of the assessee stands allowed. Order dictated and pronounced in the open court on 25/02/2026. Sd/- Sd/- (GEORGE MATHAN) (MADHUSUDAN SAWDIA) �या�यक सद�य / JUDICIAL MEMBER लेखा सद�य/ ACCOUNTANT MEMBER Cuttack �दनांक Dated 25/02/2026 Prakash Kumar Mishra, Sr.P.S. आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant - ��थ� / The Respondent- 2. 3. आयकर आयु�(अपील) / The CIT(A), 4. आयकर आयु�त / CIT