- Geeco Enercon Private Limited Vs DCIT (Madras High Court)
- Challenge to Section 148A(d) Order and Section 148 Notice
- Limitation Under the Old and New Reassessment Regimes
- Earlier Reassessment Proceedings for AY 2015-2016
- Madras High Court's Findings on Limitation
- Impugned Order and Notice Held Without Jurisdiction
- Final Decision
Geeco Enercon Private Limited Vs DCIT (Madras High Court)
Summary: The Madras High Court allowed the writ petition filed by the petitioner challenging the 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. The dispute concerned Assessment Year 2015-2016 and the limitation applicable to reassessment proceedings after the amended reassessment provisions came into force with effect from 01.04.2021.
The Court noted that under the amended Section 148 read with Section 149, the limitation was three years and ten years from the end of the relevant assessment year, subject to the first proviso to Section 149. The first proviso curtailed issuance of a notice under Section 148 under the new regime where the limitation under the old regime had already expired. The Court recorded that under the old regime the four-year and six-year limitation periods would have expired on 31.03.2020 and 31.03.2022, respectively.
In the present case, a notice under Section 148 had already been issued on 04.02.2021 under the old regime and this eventually culminated in an assessment order dated 25.03.2022 under Section 143(3) read with Section 147, as the provisions stood prior to 01.04.2021. Thereafter, a fresh notice under Section 148A(b) was issued on 23.08.2024.
The Court observed that the power to issue a notice under Section 148 was curtailed by the first proviso to Section 149. Since the limitation for issuing a notice within the extended six-year period under the old regime had already expired on 31.03.2022, the subsequent initiation of proceedings under Section 148A(b) on 23.08.2024 for issuance of a notice under Section 148 under the new regime was barred by limitation.
Accordingly, the Court held that the impugned order dated 31.08.2024 under Section 148A(d) and the consequential notice issued under Section 148 were without jurisdiction and quashed both. The writ petition was allowed, there was no order as to costs, and the connected Miscellaneous Petitions were closed.
Challenge to Section 148A(d) Order and Section 148 Notice
The petitioner challenged the impugned order dated 31.08.2024 passed under Section 148A(d) and the consequential notice dated 31.08.2024 issued under Section 148 of the Income Tax Act, 1961.
The proceedings related to Assessment Year 2015-2016. The principal question before the Court concerned the limitation applicable to the subsequent reassessment proceedings initiated after the amended reassessment regime had come into effect from 01.04.2021.
Limitation Under the Old and New Reassessment Regimes
The Court considered the interaction between the amended Section 148 and Section 149 and the first proviso to Section 149. The first proviso restricts the issuance of a notice under Section 148 under the amended regime where the limitation available under the old regime had already expired.
The judgment records the following limitation periods:
| Regime | Limitation Period | Expiry Date |
|---|---|---|
| Old regime | Four years | 31.03.2020 |
| Old regime | Six years | 31.03.2022 |
| New regime | Three years | 31.03.2019 |
| New regime | Ten years | 31.03.2026 |
The judgment thus proceeded on the basis that the first proviso to Section 149 prevented a fresh notice under the new reassessment regime where the relevant limitation under the old regime had already expired.
For further TaxGuru reading on the limitation framework under Section 149, see Section 149 of the Income Tax Act.
Earlier Reassessment Proceedings for AY 2015-2016
The Court noted that the Income Tax Department had already issued a notice under Section 148 on 04.02.2021 under the old reassessment regime.
Those proceedings 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 those provisions stood prior to 01.04.2021.
After that assessment order had been passed, a fresh notice under Section 148A(b) was issued on 23.08.2024. The subsequent proceedings were therefore initiated after the expiry of the six-year limitation period applicable under the old regime.
Madras High Court’s Findings on Limitation
The Court observed that the limitation for issuing a notice within the extended six-year period under the old regime had admittedly expired on 31.03.2022.
Consequently, the Court held that the initiation of further proceedings under Section 148A(b) on 23.08.2024, with a view to issuing a notice under Section 148 under the new regime, was clearly barred by limitation.
The Court specifically observed that where the limitation prescribed under the old regime had already expired, there was no question of issuing a notice under Section 148 under the new regime. The Court accordingly treated the subsequent proceedings as being beyond the jurisdiction available under the statutory limitation framework.
TaxGuru has also discussed the reassessment framework and the interplay between the amended provisions and limitation in Section 148 reassessment proceedings.
Impugned Order and Notice Held Without Jurisdiction
Having found the initiation of the proceedings to be barred by limitation, the Court held that the impugned order dated 31.08.2024 passed under Section 148A(d) and the consequential notice issued under Section 148 were without jurisdiction.
The Court consequently quashed both the impugned order and the consequential notice.
Final Decision
The writ petition was allowed.
The Court directed that:
- the impugned order dated 31.08.2024 passed under Section 148A(d) was quashed;
- the consequential notice issued under Section 148 was quashed;
- there would be no order as to costs; and
- the connected Miscellaneous Petitions were closed.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
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.
