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The authors examine whether the 2023 amendment to Section 151, aligning sanctioning authorities with Section 149’s extended time limits, applies retrospectively. For reassessment notices issued beyond three years between 2021 and 2023, the Ahmedabad Tribunal deemed the proviso clarificatory, validating sanctions by the Principal Commissioner. Conversely, the Mumbai Tribunal and Bombay High Court ruled the amendment prospective, finding such sanctions invalid without Principal Chief Commissioner approval. They emphasize that Section 149(2) subordinates limitation periods to Section 151's mandates. Although the Finance Act 2023 resolved this for subsequent notices, earlier cases remain contested.
ISSUE FOR CONSIDERATION
The time limit for issue of notices for reassessment under section 148 are contained in section 149(1) of the Income Tax Act, 1961 (“the Act”). This time limit (as it stood on 1st April 2022) was 3 years from the end of the relevant assessment year, unless an asset, expenditure in respect of a transaction, event or occasion or entry in books of account, of a value of more than Rs.50 lakh, had escaped assessment, in which case the time limit was 10 years from the end of the relevant assessment year.
