Court rules issuance of notice under Section 148A(b) of the Income Tax Act, 1961 as barred by limitation
In a significant ruling, the Madras High Court, Madurai Bench, presided over by Justice C. Saravanan, quashed a notice issued by the Deputy Commissioner of Income Tax to Geeco Enercon Private Limited. The notice, issued under Section 148A(b) of the Income Tax Act, 1961, was deemed barred by limitation as per the judgment dated July 20, 2026.
The dispute revolved around the Assessment Year 2015-2016, with the notice in question issued on August 23, 2024. The core issue was whether the notice under the new provisions of the Income Tax Act, effective from April 1, 2021, could be issued after the limitation period under the old regime had already expired.
The court observed that under the old regime, the limitation periods of four years and six years expired on March 31, 2020, and March 31, 2022, respectively. The notice issued on August 23, 2024, was thus beyond the permissible period, making it unauthorized under the new regime.
The judgment emphasized that the first proviso to Section 149 of the Income Tax Act, 1961, which came into effect on April 1, 2021, curtails the power to issue notices if the limitation period under the old regime had already expired. The Court noted that since the extended period of six years expired on March 31, 2022, any subsequent notice under Section 148 was not legally sustainable.
Consequently, the court quashed the impugned order dated August 31, 2024, and the consequential notice issued under Section 148, declaring them to be without jurisdiction. The writ petition filed by Geeco Enercon Private Limited was thus allowed, providing relief to the petitioner.
This ruling highlights the significance of adhering to statutory limitation periods in tax proceedings, ensuring that taxpayers are not subjected to prolonged uncertainty regarding their tax liabilities.
Bottom Line :
Income Tax Act - Issuance of notice under Section 148 of the Income Tax Act, 1961 under the new regime is barred by limitation if the limitation period under the old regime had already expired.
Statutory provision(s): Sections 148, 148A(b), 148A(d), 149 of the Income Tax Act, 1961
