High Court Quashes Reassessment Proceedings for AY 2015-16 as Time-Barred

A writ petition was presented challenging the legitimacy of the proceeding under Section 148 of the Income Tax Act for the AY 2015-16. The petitioner assailed the notice dated April 6, 2022, the order passed under Section 148A(d) on the same date, and the reassessment order dated March 4, 2024, under Section 147 read with Section 144B. It was submitted that the proceedings were barred by limitation and without jurisdiction since the prescribed statutory time for initiation had already expired. The challenge was based on the argument that after crossing the line of limitation, there is no authority to reopen the assessment.

Having heard both sides and reviewed the record, the Court concluded that the notice dated April 6, 2022, was made for an assessment year already barred by time. The order u/S 148A(d) and the reassessment order u/S 147 read with S. 144B dated 04.03.2024 were a perpetuation of an invalid initiation and could, therefore, not legally be sustained.
The Bench emphasised that limitation provisions are mandatory and not merely procedural. The initiation of reassessment beyond limitation takes away the jurisdiction of the authority and renders the entire proceedings null and void.

Main Issue: Whether reassessment proceedings initiated on 06.04.2022 for AY 2015-16 and concluded by order dated 04.03.2024 were barred by limitation.

HC’s Ruling: The Court held that the notice dated 06.04.2022 issued under Section 148 for AY 2015-16 was time-barred and, therefore, invalid in law. Once the initiation was beyond limitation, the order passed under Section 148A(d) on 06.04.2022, and the reassessment order dated 04.03.2024 under Section 147 read with Section 144B automatically lost their force.

The whole series of proceedings was thus held unsustainable. The Court reaffirmed that limitation provisions were binding on the authorities and had to be adhered to strictly. Any attempt to launch a reassessment after the outer statute of limitations is jurisdictionally without substance. Because the very basis of the reassessment in this matter was time-barred, all the follow-up actions were quashed. As a result, the writ petition was allowed, the impugned notice and orders were set aside, and all pending miscellaneous applications were disposed of.

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