The law of limitation is procedural and the provision or the limitation period stipulated on the date when the suit is filed applies.

Sanjiv Khanna, J.;—

C.B. Richards Ellis Mauritius Limited has filed this writ petition challenging the re-assessment notice dated 30.3.2009 under Section 148 of the Income Tax Act, 1961 (hereinafter, referred to as “the Act”) in respect of the assessment year 1998-99. The petitioner has also prayed for quashing of the order dated 1.12.2010 passed by the Assistant Director of Income Tax, Circle 1(1), Directorate of International Taxation, New Delhi, dismissing their objections to the initiation of the re-assessment proceedings.

2. The petitioner had filed return of income for the assessment year 1998-99 on 20.11.1998 declaring total income of Rs.1,07,75,850/-. The return was taken up in scrutiny and an assessment order under Section 143(3) of the Act was passed on 28.2.2001.

3. As noticed above, the re-assessment notice under Section 148 of the Act was issued on 30.3.2009, i.e. after the expiry of nine years from the assessment year in which the return of income for the assessment year 1998-99 was filed. The question and issue raised by the petitioner is whether the notice under Section 148 of the Act dated 30.3.2009 is barred and beyond time. This issue is live and is required to be decided as the time limit for issuance of notice under Section 148 as stipulated and stated in Section 149 of the Act underwent substitution by Finance Act, 2001 with effect from 1.6.2001. By the Finance Act, 2001, the period was restricted to six years from the end of the relevant assessment year. Before the said substitution, till 31.5.2001 re-assessment proceedings could be initiated for up to 10 years from the end of the relevant assessment year.

4. For the sake of completeness, we are reproducing below Section 149 of the Act as amended by the Direct Tax Laws (second amendment) Act, 1989 with retrospective effect from 1.4.1989 before substitution by the Finance Act, 2001:-

“149. Time limit for notice.--(1) No notice under section 148 shall be issued for the relevant assessment year,--

(a) in a case where an assessment under sub-section (3) of section 143 or section 147 has been made for such assessment year,--

(i) if four years have elapsed from the end of the relevant assessment year, unless the case falls under sub-clause (ii) or sub-clause (iii) ;

(ii) if four years, but not more than seven years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees fifty-thousand or more for that year ;

(iii) if seven years, but not more than ten years, have elapsed from the end of the relevant assessment year, unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to more than rupees one lakh or more for that year ;

(b) in any other case,--

(i) if four years have elapsed from the end of the relevant assessment year, unless the case falls under sub-clause (ii) or sub-clause (iii) ;

(ii) if four years, but not more than seven years, have elapsed from the end of the relevant assessment year, unless the income charegeable to tax which has escaped assessment amounts to or is likely to amount to rupees twenty-five thousand or more for that year ;

(iii) if seven years, but not more than ten years, have elasped from the end of the relevant assessment year, unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees fifty thousand or more for that year.

Explanation.--In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section.

(2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151.

(3) If the person on whom a notice under section 148 is to be served is a person treated as the agent of a non-resident under section 163 and the assessment, reassessment or recomputation to

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