“Section 149(1)”
The decision most relied on for Section 149(1) is Union of India v. Ashish Agarwal (444 ITR 1), cited in 524 judgments on BharatTax.
Leading authorities on Section 149(1)
Notices issued under the unamended Section 148 of the Income-tax Act between April 1, 2021, and May 4, 2022, must be treated as notices issued under the new Section 148A(b) of the amended law. This requires the Assessing Officer to follow the procedure prescribed under the amended reassessment provisions, including issuing an order under Section 148A(d) before a fresh notice under Section 148.
For assessments under Section 153C, the commencement point for calculating the six or ten assessment year block period is the date of issuing the Section 153C notice, or the date of the satisfaction note/handing over of books, as clarified by the first proviso to Section 153C(1).
Minor defects or mistakes in a penalty notice issued under Section 274 do not invalidate penalty proceedings under Section 271(1)(c) if the assessee suffers no prejudice and is aware of the charge. However, significant vagueness or ambiguity that demonstrates non-application of mind or causes prejudice can still render the notice invalid.
Reassessment proceedings are invalid if the reasons recorded for initiating action under section 148 are not served on the assessee within the limitation period prescribed by section 149. Furthermore, reassessment cannot be based on a mere change of opinion without tangible material, particularly when the assessee has made a full and true disclosure of material facts.
Voluntary disclosures or explanations offered by an assessee do not automatically absolve them from penalty under section 271(1)(c) if the explanation is not substantiated by credible evidence.
Orders passed under section 201(1) are barred by limitation if the prescribed period of limitation under section 201(3) had expired before the amendment by the Finance Act, 2014 came into force. The amended section 201(3) does not apply retrospectively.
Income-tax assessment proceedings are administrative in nature, not civil disputes or judicial proceedings between contesting parties. Income-tax authorities act as administrative bodies to estimate income and assess tax, and the proper service of notice within the limitation period is foundational for reassessment jurisdiction.
Not all receipts constitute income chargeable to tax. An Assessing Officer cannot reject a prima facie reasonable explanation on mere probabilities or arbitrary grounds, but must disprove facts.
