They reopened AY 2016-17 in 2022 for under Rs 50 lakh. Is the notice time-barred?
Yes. The Jharkhand High Court held the three-year period for AY 2016-17 ended on 31 March 2020, and because the Department itself alleged escapement of only Rs. 39,21,450 the extended ten-year window in s.149(1)(b) was unavailable. The whole proceeding was without jurisdiction.
Decided by the High Court (Jharkhand High Court at Ranchi, Division Bench — Justice Rongon Mukhopadhyay and Justice Deepak Roshan) on 2023-12-11, reported as W.P.(T) No. 2815 of 2023; [2024] 159 taxmann.com 500 (Jharkhand) / [2024] 465 ITR 331 (Jharkhand). It bears on section 148, section 148A, section 148A(b), section 148A(d), section 149, section 149(1)(a), section 149(1)(b), section 147, section 151, section 156 of the Income Tax Act 1961, in Reassessment & Reopening matters.
A Division Bench of the Jharkhand High Court at Ranchi, binding in Jharkhand, treating s.149 as a jurisdictional bar rather than a procedural timetable. The practical value is the consequence: because the initiation was void, the s.148A(d) order, the s.148 notice, the reassessment and the demand notice all fell with it, and the Court did not need to reach the assessee's alternative grounds on approval and non-consideration of replies. It is the cleanest local authority for arguing the Rs. 50 lakh threshold on the Department's own figures.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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For AY 2016-17 a notice under s.148 was first issued to the assessee, a private limited company, on 30 June 2021. The assessee asked for the reasons to believe by letter of 22 July 2021. The Department then issued a letter dated 30 May 2022 deemed to be a notice under s.148A(b), without supplying the information and material relied on; the assessee replied on 4 June 2022 raising objections, and again on 28 June 2022 to a further show-cause notice of 22 June 2022. On 21 July 2022 the Department passed the order under s.148A(d) and issued the s.148 notice, both putting the escaped income at Rs. 39,21,450. The reassessment order under s.147 followed on 31 May 2023 with a demand notice under s.156 for Rs. 50,27,860. The Revenue's case was that the first notice had been issued under TOLA and the CBDT notifications of 31 March 2021 and 27 April 2021, that the second issued in consequence of Union of India v. Ashish Agarwal and CBDT Instruction No. 1/2022 of 11 May 2022, and that the assessee should be left to its statutory appeal.
The s.148 notice dated 21 July 2022 for AY 2016-17 was held barred by s.149, illegal, unsustainable and void ab initio, and the consequential reassessment order of 31 May 2023 under s.147 and demand notice of the same date under s.156 were quashed with it, on the principle that where the foundation of a proceeding is illegal all consequential orders are bad. The ordinary three-year period for AY 2016-17 expired on 31 March 2020; the extended period of up to ten years under s.149(1)(b) was unavailable because the escaped income the Department itself alleged was Rs. 39,21,450, below the Rs. 50,00,000 threshold. On that footing the initiation was wholly without jurisdiction, which also brought the case within the Whirlpool exceptions and made the writ maintainable notwithstanding the alternative remedy. The Court expressly declined to decide the assessee's other grounds — want of approval under s.151, non-consideration of its replies and non-supply of the material relied on (paras 10 to 14).
The Court set out the s.149 scheme in a table: s.149(1)(a) gives three years from the end of the relevant assessment year, here to 31 March 2020, and s.149(1)(b) extends the period beyond three and up to ten years — here to 31 March 2027 — only where the Assessing Officer has books, documents or evidence revealing that income chargeable to tax represented in the form of an asset, expenditure on a transaction or event, or an entry in the books, amounts to or is likely to amount to fifty lakh rupees or more, and the permission of the concerned authority is obtained (para 9). Both the s.148A(b) notice of 30 May 2022 and the s.148A(d) order of 21 July 2022 put the escaped income at Rs. 39,21,450, so the notice of 21 July 2022 was beyond three years and could not take the benefit of the extended period (para 10). The Revenue's objection that the assessee should be relegated to appeal was met on its own authority: Godrej Sara Lee Ltd. quotes the Whirlpool Corporation exceptions, one of which is that the order or proceedings are wholly without jurisdiction, and that exception was satisfied here (para 11). The initiation being without jurisdiction, everything consequential fell with it (paras 12, 13). Having so held, the Court did not adjudicate the remaining grounds (para 14). Two things the Court did not do: it did not address the Revenue's case that the original s.148 notice of 30 June 2021 had been issued under TOLA and its notifications and that the 21 July 2022 notice was issued in consequence of Union of India v. Ashish Agarwal, and it did not compute any surviving time under TOLA.
Thus, we are having no hesitation in holding that the very initiation of reassessment proceeding is wholly without jurisdiction.
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Handle my notice → Ask a CA on WhatsAppYes. The Jharkhand High Court held the three-year period for AY 2016-17 ended on 31 March 2020, and because the Department itself alleged escapement of only Rs. 39,21,450 the extended ten-year window in s.149(1)(b) was unavailable. The whole proceeding was without jurisdiction. This was decided by the High Court (Jharkhand High Court at Ranchi, Division Bench — Justice Rongon Mukhopadhyay and Justice Deepak Roshan) and bears on section 148, section 148A, section 148A(b), section 148A(d), section 149, section 149(1)(a), section 149(1)(b), section 147, section 151, section 156 of the Income Tax Act 1961. It is reported as W.P.(T) No. 2815 of 2023; [2024] 159 taxmann.com 500 (Jharkhand) / [2024] 465 ITR 331 (Jharkhand). A Division Bench of the Jharkhand High Court at Ranchi, binding in Jharkhand, treating s.149 as a jurisdictional bar rather than a procedural timetable. The practical value is the consequence: because the initiation was void, the s.148A(d) order, the s.148 notice, the reassessment and the demand notice all fell with it, and the Court did not need to reach the assessee's alternative grounds on approval and non-consideration of replies. It is the cleanest local authority for arguing the Rs. 50 lakh threshold on the Department's own figures. If it applies to you, the first step is this: Take the escapement figure from the Department's own s.148A(b) notice and s.148A(d) order and show it falls short of Rs. 50,00,000.
For AY 2016-17 a notice under s.148 was first issued to the assessee, a private limited company, on 30 June 2021. The assessee asked for the reasons to believe by letter of 22 July 2021. The Department then issued a letter dated 30 May 2022 deemed to be a notice under s.148A(b), without supplying the information and material relied on; the assessee replied on 4 June 2022 raising objections, and again on 28 June 2022 to a further show-cause notice of 22 June 2022. On 21 July 2022 the Department passed the order under s.148A(d) and issued the s.148 notice, both putting the escaped income at Rs. 39,21,450. The reassessment order under s.147 followed on 31 May 2023 with a demand notice under s.156 for Rs. 50,27,860. The Revenue's case was that the first notice had been issued under TOLA and the CBDT notifications of 31 March 2021 and 27 April 2021, that the second issued in consequence of Union of India v. Ashish Agarwal and CBDT Instruction No. 1/2022 of 11 May 2022, and that the assessee should be left to its statutory appeal. The matter was decided on 2023-12-11 by the High Court (Jharkhand High Court at Ranchi, Division Bench — Justice Rongon Mukhopadhyay and Justice Deepak Roshan). On those facts the High Court held as follows. The s.148 notice dated 21 July 2022 for AY 2016-17 was held barred by s.149, illegal, unsustainable and void ab initio, and the consequential reassessment order of 31 May 2023 under s.147 and demand notice of the same date under s.156 were quashed with it, on the principle that where the foundation of a proceeding is illegal all consequential orders are bad. The ordinary three-year period for AY 2016-17 expired on 31 March 2020; the extended period of up to ten years under s.149(1)(b) was unavailable because the escaped income the Department itself alleged was Rs. 39,21,450, below the Rs. 50,00,000 threshold. On that footing the initiation was wholly without jurisdiction, which also brought the case within the Whirlpool exceptions and made the writ maintainable notwithstanding the alternative remedy. The Court expressly declined to decide the assessee's other grounds — want of approval under s.151, non-consideration of its replies and non-supply of the material relied on (paras 10 to 14).
The Court set out the s.149 scheme in a table: s.149(1)(a) gives three years from the end of the relevant assessment year, here to 31 March 2020, and s.149(1)(b) extends the period beyond three and up to ten years — here to 31 March 2027 — only where the Assessing Officer has books, documents or evidence revealing that income chargeable to tax represented in the form of an asset, expenditure on a transaction or event, or an entry in the books, amounts to or is likely to amount to fifty lakh rupees or more, and the permission of the concerned authority is obtained (para 9). Both the s.148A(b) notice of 30 May 2022 and the s.148A(d) order of 21 July 2022 put the escaped income at Rs. 39,21,450, so the notice of 21 July 2022 was beyond three years and could not take the benefit of the extended period (para 10). The Revenue's objection that the assessee should be relegated to appeal was met on its own authority: Godrej Sara Lee Ltd. quotes the Whirlpool Corporation exceptions, one of which is that the order or proceedings are wholly without jurisdiction, and that exception was satisfied here (para 11). The initiation being without jurisdiction, everything consequential fell with it (paras 12, 13). Having so held, the Court did not adjudicate the remaining grounds (para 14). Two things the Court did not do: it did not address the Revenue's case that the original s.148 notice of 30 June 2021 had been issued under TOLA and its notifications and that the 21 July 2022 notice was issued in consequence of Union of India v. Ashish Agarwal, and it did not compute any surviving time under TOLA. In the words reproduced by the source cited on this page: "Thus, we are having no hesitation in holding that the very initiation of reassessment proceeding is wholly without jurisdiction."
It was decided by the High Court on 2023-12-11 and is reported as W.P.(T) No. 2815 of 2023; [2024] 159 taxmann.com 500 (Jharkhand) / [2024] 465 ITR 331 (Jharkhand). Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 148, section 148A, section 148A(b), section 148A(d), section 149, section 149(1)(a), section 149(1)(b), section 147, section 151, section 156, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The s.148 notice dated 21 July 2022 for AY 2016-17 was held barred by s.149, illegal, unsustainable and void ab initio, and the consequential reassessment order of 31 May 2023 under s.147 and demand notice of the same date under s.156 were quashed with it, on the principle that where the foundation of a proceeding is illegal all consequential orders are bad. The ordinary three-year period for AY 2016-17 expired on 31 March 2020; the extended period of up to ten years under s.149(1)(b) was unavailable because the escaped income the Department itself alleged was Rs. 39,21,450, below the Rs. 50,00,000 threshold. On that footing the initiation was wholly without jurisdiction, which also brought the case within the Whirlpool exceptions and made the writ maintainable notwithstanding the alternative remedy. The Court expressly declined to decide the assessee's other grounds — want of approval under s.151, non-consideration of its replies and non-supply of the material relied on (paras 10 to 14). It arises in Reassessment & Reopening matters, on section 148, section 148A, section 148A(b), section 148A(d), section 149, section 149(1)(a), section 149(1)(b), section 147, section 151, section 156 of the Income Tax Act 1961, and was decided by Jharkhand High Court at Ranchi, Division Bench — Justice Rongon Mukhopadhyay and Justice Deepak Roshan. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Lead with limitation; the Court decided the case on that ground alone without reaching approval or non-consideration of replies. Ask for the reassessment order and the demand notice to be quashed as consequential, not just the s.148 notice. Compute and plead the exact date on which the three-year period expired for your assessment year.
Validity check could not be completed. No later decision applying, following or affirming this order was found on the database, and the report carries no citator banner and no CASE REVIEW entry. Absence of contrary authority is not confirmation. The order should in any event be read with care: the first s.148 notice for AY 2016-17 issued on 30 June 2021, so the case belongs to the batch governed by Union of India v. Ashish Agarwal, and the Revenue expressly relied on TOLA and the CBDT notifications of 31 March 2021 and 27 April 2021. The Court did not engage with that argument and computed no surviving TOLA time — it applied the plain three-year count and the Rs. 50 lakh threshold and stopped there. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Decided 11 December 2023 in W.P.(T) No. 2815 of 2023 and reported at [2024] 159 taxmann.com 500 (Jharkhand) / [2024] 465 ITR 331 (Jharkhand); the entry previously carried 19 February 2024, which is not the date of the order. The database holds only one Sevensea Vincom decision, so the companion matter the entry referred to could not be located or distinguished. Two points of substance: the Court left the grounds on s.151 approval, non-consideration of the replies and non-supply of material expressly undecided (para 14), and it did not address the Revenue's TOLA and Ashish Agarwal argument at all, although the original s.148 notice issued on 30 June 2021. The Court did not decide the grounds on approval under s.151, on non-consideration of the assessee's replies of 4 June and 28 June 2022, or on non-supply of the information and material relied on (para 14). It also gave no answer to the Revenue's case that the proceeding was saved by TOLA and by Union of India v. Ashish Agarwal, so the order does not settle how the Rs. 50 lakh threshold interacts with the extended TOLA reckoning. The companion Jharkhand matter referred to in secondary reports is not on the database. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The s.148 notice dated 21 July 2022 for AY 2016-17 was held barred by s.149, illegal, unsustainable and void ab initio, and the consequential reassessment order of 31 May 2023 under s.147 and demand notice of the same date under s.156 were quashed with it, on the principle that where the foundation of a proceeding is illegal all consequential orders are bad. The ordinary three-year period for AY 2016-17 expired on 31 March 2020; the extended period of up to ten years under s.149(1)(b) was unavailable because the escaped income the Department itself alleged was Rs. 39,21,450, below the Rs. 50,00,000 threshold. On that footing the initiation was wholly without jurisdiction, which also brought the case within the Whirlpool exceptions and made the writ maintainable notwithstanding the alternative remedy. The Court expressly declined to decide the assessee's other grounds — want of approval under s.151, non-consideration of its replies and non-supply of the material relied on (paras 10 to 14).
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