Reassessment Notice Issued Under New Regime Beyond Old Limitation Period Is Void and Without Jurisdiction

By | August 13, 2026
0 Comment

Reassessment Notice Issued Under New Regime Beyond Old Limitation Period Is Void and Without Jurisdiction

Reassessment Notice Issued Under New Regime Beyond Old Limitation Period Is Void and Without Jurisdiction

Issue

Whether a reassessment notice issued under Section 148 under the new regime (post 01.04.2021) is legally valid when the maximum time limit prescribed for reopening under the old regime had already expired prior to its issuance.

Facts

  • The case pertains to Assessment Year 2015-16.
  • The Assessing Officer initially passed a reassessment order under the old regime governing Section 147/148.
  • Subsequently, the Assessing Officer issued a fresh show-cause notice under Section 148A(b) on 23.08.2024.
  • The Assessing Officer passed an order under Section 148A(d) on 31.08.2024 and issued a consequential reassessment notice under Section 148 on the same date.
  • The extended six-year limitation period prescribed under the old regime for issuing a Section 148 notice for AY 2015-16 had already expired on 31.03.2022.
  • The assessee challenged the order under Section 148A(d) and the consequential notice under Section 148 as time-barred and lacking jurisdiction.

Decision

  • As per the first proviso to Section 149 (amended w.e.f. 01.04.2021), if the limitation period for issuing a notice under the old regime had already expired, no notice can be issued under Section 148 under the new regime.
  • The extended six-year limitation period under the old regime expired on 31.03.2022, whereas the fresh proceedings under Section 148A/148 were initiated in August 2024.
  • The impugned order under Section 148A(d) and the consequential notice under Section 148 were declared time-barred, without jurisdiction, and quashed in favour of the assessee.

Key Takeaways

  • Protection Under First Proviso to Section 149: The first proviso to Section 149 acts as a absolute bar against reopening assessments under the post-2021 regime if the right to reopen had already lapsed under the pre-2021 law.
  • Non-Revival of Expired Time Limits: The transition to the new reassessment procedure cannot revive time-barred cases where the maximum limitation period under the old law had run out prior to initiating action.
  • Jurisdictional Defect: Any Section 148 notice issued after the expiration of the old limitation threshold is legally unsustainable and void ab initio.
HIGH COURT OF MADRAS
Geeco Enercon (P.) Ltd.
v.
Deputy Commissioner of Income-tax
C. Saravanan, J.
W.P.(MD) No.30962 of 2024
W.M.P.(MD) Nos.26021 & 26022 of 2024
JULY  20, 2026
G. Shiva Kumar for the Petitioner. J. Parekh Kumar, Sr. Standing Counsel for the Respondent.
ORDER
1. In this Writ Petition, the petitioner has challenged the impugned order dated 31.08.2024 passed under Section 148A(d) of the Income Tax Act, 1961 and the consequential notice dated 31.08.2024 issued under Section 148 of the Income Tax Act, 1961.
2. The dispute pertains to the Assessment Year 2015-2016. The limitation for initiating proceedings under the amended Section 148 of the Income Tax Act, 1961, with effect from 01.04.2021, read with Section 149 of the Income Tax Act, 1961, would be three years and ten years from the end of the relevant assessment year, provided that the limitation under the old regime had not expired. This is in terms of the first proviso to Section 149 of the Income Tax Act, 1961, which came into force with effect from 01.04.2021.
3. Under the old regime, the limitation periods of four years and six years would have expired on 31.03.2020 and 31.03.2022, respectively. Under the new regime, the limitation periods of three years and ten years expired on 31.03.2019 and 31.03.2026, respectively.
4. Admittedly, in the present case, the notice under Section 148 of the Income Tax Act, 1961 was issued as early as 04.02.2021 under the old regime, which eventually culminated in an assessment order dated 25.03.2022 passed under Section 143(3) read with Section 147 of the Income Tax Act, 1961, as it stood prior to 01.04.2021.
5. It is noticed that after the aforesaid assessment order was passed, a fresh notice under Section 148A(b) of the Income Tax Act, 1961 was issued on 23.08.2024. The power to issue a notice under Section 148 of the Income Tax Act, 1961 is curtailed by the first proviso to Section 149 of the Income Tax Act, 1961, as amended with effect from 01.04.2021. If the limitation prescribed under the old regime had already expired, there is no question of issuing a notice under Section 148 of the Income Tax Act, 1961 under the new regime.
6. Admittedly, in the present case, the limitation for issuing a notice within the extended period of six years under the old regime had already expired on 31.03.2022. Therefore, the initiation of further proceedings under Section 148A(b) of the Income Tax Act, 1961 for issuing a notice under Section 148 of the said Act under the new regime on 23.08.2024 is clearly barred by limitation.
7. Accordingly, the impugned order dated 31.08.2024 passed under Section 148A(d) of the Income Tax Act, 1961 and the consequential notice issued under Section 148 of the said Act are held to be without jurisdiction. Consequently, both the impugned order and the consequential notice are quashed.
8. Accordingly, this Writ Petition stands allowed. There shall be no order as to costs. Consequently, the connected Miscellaneous Petitions are closed.