Section 149

Section 149 — the law in short

What the courts have decided on section 149, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Union of India v Rajeev Bansal Supreme CourtCuts both ways
  Your notice was issued in the 1 April to 30 June 2021 window. Was it saved by TOLA, or is it dead?
  Saved, but only within limits. TOLA extends the time limit for issuing the reassessment notice and for the sanction under s.151. It does not extend anything else, and every other defence survives — including the surviving-period computation for your own assessment year.
• Union of India v Ashish Agarwal Supreme CourtHelps department
  What happened to the thousands of s.148 notices issued under the old rules after the law changed in 2021?
  Reported as treating those notices as s.148A(b) show-cause notices instead of quashing them, with directions on how they were to proceed.
• K.M. Sharma v ITO — the 1989 widening of s.150(1) does not revive a year already barred Supreme CourtHelps taxpayer
  The officer says a court's order in my land acquisition case lets him reopen years going back to the sixties, because s.150(1) says the notice may be issued at any time. Can he?
  No, not for a year that was already beyond assessment before 1 April 1989. Section 150(1) was widened with effect from that date to cover a finding or direction in an order of a court in a proceeding under any other law. The Supreme Court held that the widening is not expressed to be retrospective and so operates only from 1 April 1989: it reaches assessments that had not become final by then, and it does not reach assessments that had. Sub-section (2), the Court said, insulates proceedings that have attained finality on the expiry of the prescribed period of limitation, and it refers to the whole of sub-section (1), so it applies to a reassessment proposed on a court's order under another law just as much as to one proposed on an appellate order under the Act. The appeal was allowed with costs, the Delhi High Court's judgment of 24 May 1996 was set aside, and the notices under ss.148 and 142 for assessment years 1968-69 to 1971-72 and 1981-82 were quashed.
• Phool Chand Bajrang Lal v ITO Supreme CourtHelps department
  I produced my books and a confirmation for the loan at the original assessment. The officer now says he has learnt the lender was a name lender. Can he reopen on that?
  Yes. The Supreme Court dismissed the assessee's appeal and upheld the reopening. Where specific, reliable and relevant information comes into the officer's possession after the assessment, exposing the falsity of what the assessee said, that is not a change of opinion or a fresh inference from the same material - it is acting on fresh information. Producing books and a confirmation letter for a transaction later shown to be bogus is not a true and full disclosure. The officer's failure to investigate the doubt during the original assessment does not take away his jurisdiction. Burlop Dealers was confined to its own facts.
• R.K. Upadhyaya v Shanabhai P. Patel Supreme CourtHelps department
  My reassessment notice was posted on the last day of the limitation period but reached me three days later. Is it time barred?
  No. The Supreme Court allowed the Revenue's appeal and vacated the Gujarat High Court's order. Under the 1961 Act a clear distinction is made between issue of a notice and service of it. Section 149 says no notice under section 148 shall be issued after the limitation has lapsed, so once a notice is issued in time jurisdiction vests in the officer. Section 148(1) requires service before the order of assessment is made: the mandate is that reassessment shall not be made until there has been service. Service is therefore a condition precedent to the order, not to jurisdiction. Here the notice went by registered post on 31 March 1970, the last day, and that sufficed.
• Parashuram Pottery Works Co Ltd v ITO Supreme CourtHelps taxpayer
  The Income-tax Officer allowed me too much depreciation because he worked it out from his own records and forgot the initial depreciation. Years later he wants to reopen. Is that my failure to disclose?
  No. The Supreme Court quashed notices under section 148 issued more than four years after the assessment years. The mistake was the Income-tax Officer's own: he had computed depreciation from departmental records and overlooked the ceiling that the aggregate of all depreciation cannot exceed original cost. The assessee's duty is to disclose the primary facts fully and truly; it does not extend to telling the officer what inference to draw or instructing him on the law. Nothing in the returns was shown to be incorrect. Without the omission or failure limb, the officer had no jurisdiction beyond four years.
• ITO v Lakhmani Mewal Das Supreme CourtHelps taxpayer
  How strong does the officer's material have to be before he can reopen?
  Strong enough to have a live link with the belief. Material that is vague, indefinite, distant or far-fetched will not do. The statute says reason to believe, not reason to suspect.
• ITO v Murlidhar Bhagwan Das — a finding is only what the year under appeal actually required Supreme CourtHelps taxpayer
  The Commissioner (Appeals) allowed my appeal for one year and said in passing that the amount really belongs to an earlier year. The officer has now reopened that earlier year and calls the remark a finding. Is it one?
  Probably not. A Constitution Bench of five judges construed the second proviso to s.34(3) of the 1922 Act — the ancestor of s.150 — and held by three to two that it lifts the time limit only for the year that was actually before the appellate, revisional or reference authority. The majority adopted the Allahabad High Court's definition of “finding” in Pt. Hazari Lal and added that a finding can only be what was necessary for the disposal of an appeal in respect of the assessment of a particular year. A “direction” means one the authority is empowered to give under the sections named in the proviso, and s.31 gave the Appellate Assistant Commissioner no power to order an assessment for a year that was not before him. The words “any person” in the proviso were confined to a person intimately connected with the assessment of the year under appeal. The Revenue's appeal was dismissed with costs. Raghubar Dayal and Mudholkar JJ dissented.
• Asha Dubey v Union of India High CourtHelps taxpayer
  They issued a 148 notice in my late husband's name. Can they just issue a fresh one now?
  Not if the s.149 period has run out. Allahabad held that a notice on a dead person is void ab initio and that an order quashing such a notice is not a 'finding or direction' under s.150(1), so it cannot be used to reopen limitation.
• Sapphire Foods India Ltd v ACIT High CourtHelps taxpayerNo later treatment found
  The officer has reopened my scrutiny assessment because the audit party disagreed with what he allowed. Is that a fresh look or a change of opinion?
  On this decision, a change of opinion. Where the Assessing Officer had all the relevant material during the original scrutiny assessment, a reassessment driven by an audit objection on that same material is an impermissible review, and reopening on the same material is not permitted. The Court also held the notice barred by limitation because the extended period was unavailable in the absence of a failure to disclose material facts.
• Ankit Agarwal v PCCIT High CourtHelps taxpayer
  My 148A notice says I never filed a return, but I did. Is that enough to get it quashed?
  Yes, on these facts. The Patna High Court held that where the Insight Portal flag is contradicted by the Department's own records, the 'information which suggests' escapement is missing and the s.148A(b) notice, the s.148A(d) order, the s.148 notice and the demand all fall.
• Hexaware Technologies Ltd v ACIT High CourtHelps taxpayerPartly overruled — read this first
  Your s.148 notice came from your own local officer, not from the faceless unit. Does that matter?
  In Bombay, yes. After the CBDT scheme notified under s.151A on 29 March 2022, only a Faceless Assessing Officer acting through automated allocation can issue a reassessment notice. There is no concurrent jurisdiction, and a notice from the jurisdictional officer was quashed.
• PCIT v Ojjus Medicare P Ltd High CourtCuts both ways
  How do I count the six and the ten assessment years for a s.153C notice, and does the Rs 50 lakh figure have to be met year by year?
  Count them from different points, and no. For a person who was not searched, the first proviso to section 153C moves the starting point: the date on which the seized books, documents or assets are handed to his own Assessing Officer stands in place of the date of the search. From that point the six assessment years are the six that immediately precede the assessment year relevant to that previous year - the year of the handing over is excluded and treated as the zero year. The further block of 'relevant assessment years' under Explanation 1 to section 153A is not counted the same way: it runs backwards from the END of that assessment year, that is from the 31st of March, and the tenth year is the terminal point. On the money threshold, the Rs 50 lakh in clause (a) of the fourth proviso is satisfied if the escaped income meets the benchmark cumulatively or in the aggregate; it does not have to be reached in each year separately.
• Sevensea Vincom P Ltd v PCIT High CourtHelps taxpayerNo later treatment found
  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.
• IDFC Ltd v Dy CIT High CourtHelps taxpayer
  The officer is reopening beyond three years and counting a disallowance of expenditure towards the fifty lakh figure in section 149(1)(b). Is a disallowance income 'represented in the form of an asset'?
  No, not on the text of section 149(1)(b) as it stood from 1 April 2021. The Madras High Court quashed reassessment notices for assessment years 2014-15 and 2017-18 in which the officer proposed only disallowances - unrealised foreign exchange loss, bad debts written off, loss on sale of non-performing loans, a section 43B disallowance and a MAT adjustment. The Court found no mention of any asset anywhere in the impugned proceedings, and held that the law then required material indicating the existence of an asset from which escapement could be inferred. It added that the material relied on was already on record and had been through scrutiny.
• Suman Jeet Agarwal v ITO High CourtCuts both ways
  The department says my section 148 notice was issued on 31 March because the ITBA screen shows it was generated that day, but the e-mail only reached me in April. Which date counts, and can I take that to a writ court?
  The date it went out. The Delhi High Court, deciding a batch of more than 170 writ petitions, held that 'issue' means the officer must, after drawing up and signing the notice, do an overt act to ensure its due despatch, and that it is only upon due despatch that a notice can be said to have been issued. Mere generation of the notice on the ITBA screen is therefore not issue, in fact or in law. The Court noted from the department's own compliance affidavit that generation and digital signing are the officer's acts while the e-mail carrying the notice is drafted and triggered by the ITBA software.
• Divya Capital One Private Limited v ACIT High CourtHelps taxpayer
  The section 148A(b) notice just lists my own turnover from Form 10DB, GST and TDS data and calls it escaped income, and the officer passed the 148A(d) order without my detailed reply. Can I get it set aside?
  Yes. The Delhi High Court quashed the section 148A(d) order and the section 148 notice and remanded the matter for a fresh reasoned order within eight weeks. Classifying a fact already on record as 'information' may let the officer issue a notice under section 148A(b), but it does not let him issue a reassessment notice under section 148. The notice and order were cryptic, the underlying material was never shared, no reasonable time was given, and the detailed reply on record was not considered, which breaches the mandate of section 148A(c). The Court directed that its order be sent to the CBDT.
• Daujee Abhushan Bhandar P Ltd v UOI High CourtHelps taxpayer
  The s.148 notice was digitally signed on 31 March but the e-mail only went on 6 April. Was it issued in time?
  No. Signing a notice and issuing it are different acts. A digitally signed notice is an electronic record, and by s.13(1) of the Information Technology Act, 2000 its despatch occurs when it enters a computer resource outside the control of the originator. The notice here was issued on 6 April 2021, after the period in s.149 had run, and was quashed.
• Mon Mohan Kohli v ACIT High CourtHelps taxpayerPartly overruled — read this first
  I got a section 148 notice after 1 April 2021 under the old reassessment provisions. Could the department still use them because of the COVID relaxation notifications?
  No, on this decision. The Delhi High Court held that the substitution of sections 147 to 151 by the Finance Act 2021 repealed the old provisions and replaced them, and that the Explanations in the notifications of 31 March 2021 and 27 April 2021, purporting to keep the old procedure alive until 30 June 2021, could not do so. Section 3(1) of the relaxation Act allows the Central Government to extend time limits and no more; a delegated legislation cannot vary the date on which Parliament's provisions take effect. Section 6 of the General Clauses Act does not save the old notices, because the new Act manifests an intention to destroy the old procedure.
• Harjeet Surajprakash Girotra v Union of India High CourtHelps taxpayer
  The reopening notice was posted to the address in my PAN and came back undelivered. The department says it did all it had to. Was the notice served?
  No. Rule 127(2) does not stop at the PAN address: where the communication cannot be delivered there, the further proviso requires it to be sent to the address available with the banking company or co-operative bank. The department had the assessee's bank account and had built its case out of the transactions in it, but never sent the notice to the address held by the bank, so service was incomplete and, the s.149 period having run out, the reassessment could not proceed.
• Brahm Datt v ACIT High CourtHelps taxpayer
  The Department wants to reopen a 1998-99 assessment in 2015 using the sixteen-year limit for foreign assets brought in from July 2012. Limitation for that year ran out in 2005. Can they?
  No. The Delhi High Court quashed the section 148 notice and all consequent proceedings. Limitation for assessment year 1998-99 expired on 31 March 2005 under section 149 as it then stood, six years from the end of the assessment year. The sixteen-year period in section 149(1)(c), inserted by the Finance Act 2012 with effect from 1 July 2012, could not revive an assessment that had already become final more than eight years earlier. Applying K.M. Sharma and S.S. Gadgil, an amendment extending limitation is not to be read as reviving proceedings already barred, absent express words or necessary implication.
• Kanubhai M Patel HUF v Hiren Bhatt High CourtHelps taxpayer
  My s.148 notice is dated 31 March but the post office booked it on 7 April. Which date does s.149 test?
  The date it went to the post office. To issue means to send out, to place in the hands of the proper officer for service; merely signing the notice on 31 March cannot be equated with issuing it. The date of issue was therefore 7 April 2010, beyond the six years available for assessment year 2003-04, and the notices went.
• Haryana Acrylic Manufacturing Co v CIT High CourtHelps taxpayer
  The reopening notice came after four years and the recorded reasons say nothing about my failing to disclose material facts. Is that fatal, and does it matter that the reasons reached me a year later?
  Both points went in the assessee's favour. The Delhi High Court quashed the section 148 notice, the order rejecting objections and all proceedings under them. Where the proviso to section 147 applies, the reasons must themselves allege failure to disclose fully and truly all material facts; the reasons supplied here contained no such allegation, and a differently worded form produced later with the counter-affidavit could not be substituted for them. The Court also held that reasons must be furnished within the six year outer limit in section 149, since the notice and the communication of reasons go hand in hand. On the merits the assessee had disclosed everything the officer asked for.
• Ghanta Srinivas v DCIT, Central Circle-1, Guntur ITATHelps taxpayerNo later treatment found
  After a search I admitted the cash as professional receipts in a revised computation during the assessment and paid the tax. The AO has now levied penalty under s.270A(9) for misreporting AND a second penalty under s.271AAD(1)(ii) for omitting entries from my books. Can he do both?
  The Tribunal deleted both. The s.270A penalty fell because the s.274 notice never said which of the six sub-clauses of s.270A(9) was alleged, and the s.271AAD(1)(ii) penalty fell because once the assessee had brought the receipts on record in a revised statement of total income filed during the assessment and paid the tax, there was no longer an omitted entry to penalise.
• ACIT v Lakkanna Durgappa (ITAT Bangalore) — the Revenue cannot use section 45(5A) either: a pre-2018 JDA gain cannot be shifted to the completion-certificate year ITATHelps taxpayerNo later treatment found
  My joint development agreement was signed in 2012 and the completion certificate came in the year under assessment. The Assessing Officer has taxed the whole capital gain in this later year by invoking section 45(5A). Can he?
  No. The Tribunal held that where the JDA was executed and possession handed over in FY 2012-13, the transfer within the meaning of section 2(47)(v) occurred in that year and the gain was chargeable in AY 2013-14 under the law then in force. Section 45(5A), inserted with effect from 1 April 2018, is prospective, so the gain cannot be shifted to AY 2020-21 merely because the completion certificate was received in that year. All four of the Revenue's appeals were dismissed.
• Statutory position — the Finance Act, 2026 and reassessment: s.147A, s.292BC, the thirty-day floor in s.148(1), and ss.153(10) and 153B(1A) CBDT Circulars & InstructionsCuts both waysUnder appeal
  The Finance Act 2026 seems to have changed the reassessment rules backwards in time. What exactly did it change, from which dates, and which of my grounds has it taken away?
  The Finance Act, 2026 (No. 4 of 2026), assented to on 30 March 2026, amended the Income-tax Act, 1961 through clauses 4 to 33, and six of those clauses are about assessment and reassessment. Clause 9 inserted section 147A, deemed in force from 1 April 2021, which makes the Assessing Officer for sections 148 and 148A an officer other than the National Faceless Assessment Centre or a section 144B(3) assessment unit, notwithstanding any judgment, section 151A or any scheme under it; clause 33 inserted section 292BC, also deemed in force from 1 April 2021, which makes an approval in any assessment or reassessment administrative and supervisory in nature and immune to attack for insufficient reasons or a missing digital signature. Clause 10 gave the section 148 notice a thirty-day floor from 30 March 2026, clause 11 substituted section 150 from 1 February 2026, and clauses 12 and 13 inserted section 153(10) and section 153B(1A), reaching back to 2009, to fix when a draft order under section 144C(1) may be made. Sections 147, 148A, 149, 151 and 151A were not amended at all. Section 147A has since been struck down by the Punjab and Haryana High Court in Jyoti Sareen v. Union of India on 10 September 2026, and that judgment was stayed by the Supreme Court on 18 September 2026, which hears the appeal on 3 December 2026.
• Statutory position — s.150(2): a finding or direction cannot revive a year that was already time-barred when the order under appeal was passed, and from 1 February 2026 the notice itself has a deadline CBDT Circulars & InstructionsCuts both waysSuperseded by amendment
  The officer has reopened a very old year and says he is only giving effect to a finding in an appellate order, so limitation does not apply. Is that right, and what stops him?
  Section 150(1) lifts the time limit in section 149: where an assessment, reassessment or recomputation is in consequence of or to give effect to a finding or direction in an order passed on appeal, reference or revision, or by a court, the section 148 notice may be issued at any time. Section 150(2) is the limit on that power and it is the provision that decides cases — sub-section (1) does not apply where the year in question could not have been assessed, by reason of any other time limit, at the moment the order that was the subject-matter of the appeal, reference or revision was made, so a year already dead on that date stays dead. The Supreme Court so held in K.M. Sharma, quashing notices for assessment years 1968-69 to 1971-72 and 1981-82, and the Constitution Bench in Murlidhar Bhagwan Das had already confined “finding” and “direction” to what was necessary for the year under appeal, so a remark about another year does not open it. Section 150 was substituted with retrospective effect from 1 February 2026: sub-section (1) is re-lettered and widened to a court in a proceeding under this Act, sub-section (2) gains a second measuring date, and a new sub-section (3) gives the department only three months from the end of the quarter in which the certified copy of the order reaches the jurisdictional Principal Commissioner or Commissioner. For a tax year beginning on or after 1 April 2026 the provision is section 283 of the Income-tax Act, 2025.
• CBDT Instruction No. 1/2022 — the document the whole Ashish Agarwal exercise was run on CBDT Circulars & InstructionsHelps departmentPartly overruled — read this first
  My reassessment for an old year was restarted in 2022 on the strength of a Board instruction rather than a fresh notice. What does that instruction actually say, and how much of it is the Supreme Court's?
  This is the instruction, issued under s.119 a week after Union of India v Ashish Agarwal, that told every Assessing Officer how to work out that judgment on the roughly ninety thousand notices issued under the old reassessment law between 1 April 2021 and 30 June 2021. It directs that the judgment applies to all those notices whether or not they were challenged; that the notices travel back to their original dates and new s.149 is then applied at that point, so a fresh s.148 notice may issue for assessment years 2013-14 to 2015-16 only under s.149(1)(b) and for 2016-17 and 2017-18 under s.149(1)(a); that information and material need not be given at all where escaped income for 2013-14 to 2015-16 is less than fifty lakh rupees; and that in the remaining cases the material was to be supplied by 2 June 2022, the assessee had two weeks to reply, and an order under s.148A(d) was to follow with the approval of the specified authority under s.151. Three of those directions go further than the judgment does, and the courts have said so.
• Batukbhai Premjibhai Kalathiya v ITO — a search in May 2024 is neither a section 153A case nor a block assessment: section 152(3) sends it to the old reassessment code High CourtHelps taxpayerOverruled
  My client was searched in May 2024 and has a section 148 notice for assessment year 2015-16. Which limitation applies, and is the notice good?
  The Gujarat High Court held that because the search fell between 1 April 2021 and 1 September 2024, section 152(3) required sections 147 to 151 to be applied as they stood immediately before the Finance (No. 2) Act 2024, and that the first proviso to section 149(1) then imports the section 153A and section 153C time limits. Computing the ten-year outer limit from the end of the assessment year relevant to the previous year of search, as Explanation 1 to section 153A(1) directs, assessment year 2025-26 is the first year and the tenth is 2016-17. Assessment year 2015-16 was therefore beyond the ten years, and the notice was quashed.
• Siemens Financial Services Pvt Ltd v DCIT High CourtHelps taxpayerOverruled
  Beyond three years, who has to approve the reopening — and what if the wrong officer signed?
  Beyond three years the sanction must come from the authority in s.151(ii). Approval by the Principal Commissioner under s.151(i) is no approval at all, and the s.148A(d) order and s.148 notice built on it were quashed.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.