Reassessment Notice Issued Beyond Supreme Court Extended Limitation Period Is Invalid and Void

By | September 5, 2026
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Reassessment Notice Issued Beyond Supreme Court Extended Limitation Period Is Invalid and Void

Reassessment Notice Issued Beyond Supreme Court Extended Limitation Period Is Invalid and Void\
Issue
Whether a show cause notice issued under Section 148A(b) beyond the extended limitation period granted by the Supreme Court is legally sustainable.
Facts
  • Assessment Year: Assessment Year 2013-14.
  • Initial Reassessment Notice: The Assessing Officer issued a notice under Section 148 on 09.06.2021 for reopening the assessment.
  • Supreme Court Directions: Per the Supreme Court guidelines (in Ashish Agarwal), the Revenue had a 15-day timeline (ending on 30.06.2021) to furnish the recorded reasons to the assessee.
  • Delay in Providing Reasons: The Revenue provided the recorded “reasons to believe” on 17.05.2022, to which the assessee did not file a reply.
  • Limitation Expiry: Taking into account the Supreme Court’s extended directions, the Revenue had a surviving limitation period of 22 days to issue a show cause notice under Section 148A(b), which expired on 22.06.2022.
  • Delayed SCN Issuance: The Revenue issued the show cause notice under Section 148A(b) on 29.06.2022, after the expiry of the surviving limitation period.
  • Tribunal & Appellate Orders: The appellate authority and the Income Tax Appellate Tribunal (ITAT) set aside the notice for being time-barred.
Decision
  • The show cause notice under Section 148A(b) was issued beyond the specific limitation period extended by the Supreme Court in the interest of the Revenue.
  • The ITAT committed no legal error in upholding the appellate order that quashed the reassessment proceedings for being time-barred.
  • The issue was decided entirely in favor of the assessee [Paras 3 and 5].
Key Takeaways
  • Strict Adherence to Extended Deadlines: Even when extended timelines are granted by the Supreme Court to protect the Revenue, failure to issue notices within those surviving extended limitation periods renders the proceedings time-barred.
  • Fatal Limitation Defect under Section 148A: Issuing a show cause notice under Section 148A(b) past the final limitation cutoff invalidates the subsequent reassessment proceedings.
Issue
Whether a show cause notice issued under Section 148A(b) beyond the extended limitation period granted by the Supreme Court is legally sustainable.
Facts
  • Assessment Year: Assessment Year 2013-14.
  • Initial Reassessment Notice: The Assessing Officer issued a notice under Section 148 on 09.06.2021 for reopening the assessment.
  • Supreme Court Directions: Per the Supreme Court guidelines (in Ashish Agarwal), the Revenue had a 15-day timeline (ending on 30.06.2021) to furnish the recorded reasons to the assessee.
  • Delay in Providing Reasons: The Revenue provided the recorded “reasons to believe” on 17.05.2022, to which the assessee did not file a reply.
  • Limitation Expiry: Taking into account the Supreme Court’s extended directions, the Revenue had a surviving limitation period of 22 days to issue a show cause notice under Section 148A(b), which expired on 22.06.2022.
  • Delayed SCN Issuance: The Revenue issued the show cause notice under Section 148A(b) on 29.06.2022, after the expiry of the surviving limitation period.
  • Tribunal & Appellate Orders: The appellate authority and the Income Tax Appellate Tribunal (ITAT) set aside the notice for being time-barred.
Decision
  • The show cause notice under Section 148A(b) was issued beyond the specific limitation period extended by the Supreme Court in the interest of the Revenue.
  • The ITAT committed no legal error in upholding the appellate order that quashed the reassessment proceedings for being time-barred.
  • The issue was decided entirely in favor of the assessee [Paras 3 and 5].
Key Takeaways
  • Strict Adherence to Extended Deadlines: Even when extended timelines are granted by the Supreme Court to protect the Revenue, failure to issue notices within those surviving extended limitation periods renders the proceedings time-barred.
  • Fatal Limitation Defect under Section 148A: Issuing a show cause notice under Section 148A(b) past the final limitation cutoff invalidates the subsequent reassessment proceedings.
HIGH COURT OF ALLAHABAD
Principal Commisioner of Income-tax
v.
Vikas Sharma*
Saumitra Dayal Singh and Swarupama Chaturvedi, JJ.
INCOME TAX APPEAL No. 106 of 2026 †
JULY  16, 2026
Ankur Agarwal for the Appellant.
ORDER
1. Heard Sri Ankur Agarwal, learned Senior Standing Counsel for the revenue and perused the record.
2. The present Income Tax Appeal has been filed under Section 365 of the Income Tax Act, 2025 arising from order of the Income Tax Appellate Tribunal Delhi Bench ‘E’ : New Delhi in Income Tax Officer, Ward 2(2)(1), Ghaziabad passed in ITO v. Vikas Sharma [ITA No. 3495(DEL) of 2025 ,dated 30.12.2025] for the Assessment Year 2013-14. By that order, the learned tribunal has dismissed the revenue’s appeal and thereby confirmed the first appeal order passed by the CIT Appeal dated 05.03.2025 for the Assessment Year 2013-14.
3. Undeniably, the notice under Section 148 of the Income Tax Act, 1961 was issued to the petitioner for the Assessment Year 2013-14, on 09.06.2021. Considering the 15 days timeline provided to the reveue to furnish the ‘reasons to believe’ to the assessee, in terms of the order passed by the Supreme Court in Union of India v. Ashish Agarwa (SC)/2022 SCC OnLine SC 543, that time expired on 30.06.2021. Here, the revenue furnished the ‘reasons to believe’ to the assessee, before that, on 17.05.2022. However, the assessee did not file any reply thereto. Considering the decision in Union of India v. Rajeev Bansal (SC)/2024 SCC OnLine SC 2693, the revenue had surviving limitation of 22 days (computed with reference to original notice dated 09.06.2021 and the end date 30.06.2021). Thus, the revenue could issue show cause notice under Section 148(A)(b), latest by 22.06.2022. Here that notice was issued on 29.06.2022 i.e. after a week. Clearly, the notice was issued beyond limitation, twice protected by the Supreme Court, in the interest of revenue.
4. To the extent, the timeline above noted arises on the reading of the orders of the Supreme Court and not on any independent consideration, it may not survive for any further deliberation, if the reason for nonissuance was occasioned by any conduct offered by the assessee. Issue of limitation is to be tested on its own strength in terms of the clear law laid down by the Supreme Court.
5. In view of the above, the tribunal has not committed any error in confirming the order passed by the appeal authority.
6. The present appeal lacks merit and is accordingly dismissed.