The issuance of a notice under Section 148 of the Income Tax Act is barred by limitation if it exceeds the time limits specified in Section 149, as reaffirmed by the court.

JUDGMENT :

K.R. SHRIRAM, J.

1. This petition challenges show cause notice dated 24th May 2022 issued under Section 148A(b) of the Income Tax Act, 1961 (the Act), order dated 31st July 2022 passed under Section 148A(d) of the Act (the impugned order) and notice dated 31st July 2022 issued under Section 148 of the Act (the impugned notice). According to petitioner the same are without jurisdiction inasmuch as they have been issued without complying with the jurisdictional pre-conditions referred to in Sections 147, 148, 148A, 149 and 151 of the Act.

2. Petitioner has raised the following grounds :

(a). the impugned notice is issued beyond the period of limitation provided for in Section 149 of the Act and hence, the impugned notice is bad in law;

(b). there exists no ‘information’ as the said term is understood in view of Explanation 1 to Section 148 of the Act;

(c). the impugned notice is issued during the pendency of reassessment proceedings pursuant to an earlier notice under Section 148 of the Act dated 21st May 2021 and, therefore, is illegal. The directions given by the Hon’ble Supreme Court in its judgment in Union of India V/s. Ashish Agarwal, (2022) 444 ITR 1 (SC) are not applicable to petitioner’s case as no writ petition was filed by petitioner challenging the notice dated 21st May 2021 issued under Section 148 of the Act. Hence, the notice dated 21st May 2021 issued under Section 148 of the Act cannot be deemed to be a notice issued under Section 148A(b) of the Act;

(d). there is no income chargeable to tax which is represented in the form of an asset which has escaped assessment and hence, the extended period of time limit specified in Section 149(1)(b) of the Act cannot apply to petitioner;

(e). respondent no.1 has no power to review his own assessment when the same information was provided and considered by him during the original assessment proceedings. There cannot be a reopening based on a ‘change of opinion’;

(f). the approval obtained/granted under Section 151 of the Act is without application of mind;

(g). even on merits no income has escaped assessment for the reasons stated in the impugned order.

3. With the consent of the parties, it was decided to first discuss the preliminary issue, i.e., whether the notice is issued beyond the period of limitation. It was felt, if petitioner would succeed on this aspect of limitation, the other grounds of challenge need not be gone into. Therefore, the Court instructed the counsels to restrict their submissions on the preliminary issue of limitation.

4. Apart from this petition, there are many other pending petitions pertaining to AY 2014-15, where, the validity of the notice issued under Section 148 of the Act pursuant to Ashish Agarwal (Supra) is challenged on the ground of being barred by limitation.

5. Mr. Pardiwalla submitted as under :

(a). as per the unamended Section 149(1)(b) of the Act, the outer time limit to issue a notice under Section 148 of the Act was 6 years from the end of the relevant assessment year and, thus, for AY 2014-15, the time limit to issue a notice under Section 148 of the Act expired on 31st March 2021. Under the amended provisions, notice under Section 148 of the Act can be issued within a period of 3 years or 10 years, the latter available only after fulfilling certain stipulated conditions. The first proviso to Section 149(1) of the Act restricts the applicability of the aforesaid period of 10 years by providing that no notice under Section 148 can be issued at any time in a case for any assessment year, if a notice under Section 148 of the Act could not have been issued at that time on account of being beyond the time limit specified under the unamended Section 149(1)(b) of the Act, i.e., as it stood prior to the Finance Act, 2021. Therefore, even under the amended provisions the time limit to issue a notice under Section 148 of the Act for AY 2014-15 expired on 31st March 2021 based on the first proviso to Section 149(1) of the Act and the impugne