Reassessment time barred is one of the strongest jurisdictional grounds to challenge reopening proceedings. Courts have consistently held that reassessment notices issued beyond the prescribed limitation period are void ab initio, irrespective of merits.
If limitation fails, jurisdiction fails.
Legal Issue Involved in Reassessment Time Barred Cases
Whether reassessment proceedings are valid when:
- Notices are issued beyond the permissible time limit, or
- The department attempts to rely on old provisions, or
- Conditions for extended limitation are not satisfied.
Courts have consistently held that limitation is mandatory and not procedural.
Case Law 1
Union of India vs. Ashish Agarwal | Supreme Court | 2022
Facts:
The department issued reassessment notices under the old law after 01.04.2021 for past assessment years, attempting to bypass the new limitation framework.
Held:
The Supreme Court held that reassessment must strictly comply with the new regime, including limitation and procedural safeguards.
Why it matters:
Old reassessment timelines cannot be revived once the new law applies. Limitation under the new law governs jurisdiction.
Case Law 2
Touchstone Holdings Pvt. Ltd. vs. ITO | Bombay High Court | 2022
Facts:
Reassessment was initiated beyond the prescribed limitation without satisfying the conditions for extended period.
Held:
The Court quashed the reassessment holding that limitation is a condition precedent and cannot be cured by subsequent explanations.
Why it matters:
If limitation conditions are not met on the date of notice, proceedings are void.
Case Law 3
Mon Mohan Kohli vs. ACIT | Delhi High Court | 2021
Facts:
Reassessment notices were issued without examining whether the extended limitation requirements were satisfied.
Held:
The Court held that reassessment beyond the normal period must strictly satisfy statutory conditions, failing which jurisdiction itself is lacking.
Why it matters:
Extended limitation is exceptional, not routine.
Case Law 4
Bharat Aluminium Company Ltd. vs. DCIT | Delhi High Court | 2023
Facts:
The department attempted reopening beyond limitation by relying on vague allegations without meeting statutory thresholds.
Held:
The Court quashed the reassessment, holding that limitation provisions must be construed strictly in favour of the taxpayer.
Why it matters:
Vague allegations cannot extend limitation.
Case Law 5
Siemens Financial Services Pvt. Ltd. vs. DCIT | Bombay High Court | 2023
Facts:
Reassessment was initiated beyond limitation without demonstrating failure of disclosure or statutory prerequisites.
Held:
The Court held that absence of conditions necessary for extended limitation renders reopening invalid.
Why it matters:
Burden lies on the department to justify extended limitation.
Common principles emerging
From the above judgments:
- Limitation provisions are mandatory
- Extended limitation is exceptional
- Burden is on the department
- Jurisdiction fails if limitation conditions are not met
- Merits are irrelevant once limitation fails
How to use these judgments
These case laws are decisive:
- While replying to 148A(b) notices
- In objections against reopening
- Before High Courts in writ petitions
- To challenge reassessment at the threshold stage
If limitation is crossed, do not argue merits first—attack jurisdiction.
Why Limitation Is Jurisdictional in Reassessment
Limitation under the Income-tax Act is not a procedural formality but a condition precedent for assuming jurisdiction. If the reassessment notice is issued beyond the permissible time limit, the Assessing Officer lacks inherent jurisdiction to reopen the assessment.
Courts have repeatedly held that jurisdiction cannot be conferred by consent, participation, or waiver. Once limitation fails, the entire reassessment collapses.
For statutory reference, limitation provisions may be verified on the official Income-tax Department website.
Practical Takeaway
Reassessment time-barred cases should be challenged at the threshold. If limitation is breached, no further enquiry into facts or merits is required. This principle has been consistently upheld across High Courts and the Supreme Court.
Related reading
- Received a 148A Notice? What to Do Within 48 Hours
- Difference Between Section 148, 148A and 151 – Explained Simply
- Reassessment After 3 Years – When Is It Allowed?
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