Section 149 — Time Limit for Notices under Sections 148 and 148A
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live; substituted by the Finance Act, 2021 and amended by the Finance Act, 2024 (w.e.f. 1 September 2024). Prescribes the outer time-limits for issuing a section 148 notice — the normal period, and the extended period available only where the escaped income represented in the form of an asset/expenditure/entry amounts to or is likely to amount to the prescribed threshold (fifty lakh rupees or more) — together with the crucial first proviso barring reopening that was already time-barred under the pre-2021 law.
FA 2026: The Finance Act, 2026 prescribes that a notice to give effect to a court/appellate order be issued within three months from the end of the quarter in which the order is received (read with sections 148/150/153).
FA 2024 change: The Finance Act, 2024 compressed the extended block (the higher limit now runs to five years and (with the relevant months) is shorter than the earlier ten-year window), and reorganised the thresholds.
A. SECTION COMMENTARY
Section 149 fixes how far back the Department may reach. There is a normal limitation period and an extended period that is available only in serious cases — where the income escaping assessment, represented in the form of an asset, expenditure in respect of a transaction/event, or an entry in the books, amounts to or is likely to amount to fifty lakh rupees or more. The Finance Act, 2024 recalibrated these periods (the extended block being shortened from the earlier ten-year regime). The first proviso is of capital importance: no notice under section 148 can be issued for an assessment year if, on the date of issue, such notice could not have been issued because the time-limit under the pre-substitution law had already expired — preserving accrued immunity.
Two streams of authority govern. The classic principle (S.S. Gadgil) is that once limitation has run, the Revenue's power is extinguished and cannot be revived by later extension absent express retrospectivity. In the transitional context, Rajeev Bansal harmonised section 149 with TOLA to compute the 'surviving' limitation for the deemed notices; and the High Courts (applying the first proviso) have quashed reopenings for older assessment years that were already time-barred under the old law as on 1 April 2021. The threshold and computation are jurisdictional facts that the Revenue must establish.
B. STATUTORY POSITION (verbatim text)
Reproduced from the local Act (base text to the Finance Act, 2025), as amended by the Finance Act, 2024.
149. (1) No notice under section 148 shall be issued for the relevant assessment year,—
(a) if three years and three months have elapsed from the end of the relevant assessment year, unless the case falls under clause (b);
(b) if three years and three months, but not more than five years and three months, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence related to any asset or expenditure or transaction or entries which show that the income chargeable to tax, which has escaped assessment, amounts to or is likely to amount to fifty lakh rupees or more.
(2) No notice to show cause under section 148A shall be issued for the relevant assessment year,—
(a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b);
(b) if three years, but not more than five years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment, as per the information with the Assessing Officer, amounts to or is likely to amount to fifty lakh rupees or more.
C. AUTHORITIES
The authorities cover the extinguishment of barred claims, the TOLA-harmonised surviving period, and the first-proviso protection.
1. Limitation extinguishes the power; surviving time under TOLA
Held: Once the limitation for initiating proceedings has expired, the Revenue's right is extinguished and a subsequent enlargement of the limitation period does not revive a remedy already barred, unless the amendment is expressly retrospective.
Relevance: The doctrinal foundation of the section 149 first proviso and of the limitation analysis generally. (See section 153.)
Union of India v. Rajeev Bansal (2024) 2024 INSC 754 (SC) — cross-reference
Held: TOLA continues to apply to the Income-tax Act for actions falling for completion between 20 March 2020 and 31 March 2021; the section 148 notices consequent on the Ashish Agarwal deemed notices must be issued within the time surviving under section 149 read with TOLA, after excluding the show-cause-to-reply period. The Court laid down the method for computing the 'surviving' or balance limitation.
Significance: The controlling authority on the limitation arithmetic for the transitional reassessments; section 149 is read harmoniously with TOLA. (See section 148.)
2. The first proviso — no reopening of years already time-barred
First-proviso protection — settled High Court position
Position: By the first proviso to section 149(1), a notice under section 148 cannot be issued for an assessment year if it could not have been issued on that date under the time-limits of section 149 as they stood before the Finance Act, 2021 substitution. High Courts (e.g. the Gujarat High Court in the Keenara Industries line and the Delhi High Court in Ganesh Dass Khanna) have applied this to quash reopenings of older assessment years that had already become time-barred under the pre-2021 law as on 1 April 2021, holding that the new regime cannot resurrect a barred year.
Candour note: This is a consistent line of High Court authority applying the first proviso, harmonised with Rajeev Bansal; representative decisions are summarised. The first proviso protects accrued immunity from the extended new-regime periods.
3. Full-and-true disclosure and the extended period
New Delhi Television Ltd. v. Dy. CIT (2020) 424 ITR 607 (SC) — cross-reference
Relevance: Reopening for the extended period requires a failure to disclose fully and truly all material primary facts; where primary facts were disclosed, the extended limitation is not available. The principle survives, in substance, in the structure of the new section 149 (which ties the longer period to escaped income represented by an asset and to the section 148A safeguards). (See section 147.)
Relevance: Once limitation has run, the power is extinguished and cannot be revived by a later extension absent express retrospectivity — the doctrinal basis of the first proviso to section 149. (See section 153.)
4. The first proviso and the surviving-time computation, applied
Keenara Industries (P) Ltd. v. ITO (2023) 453 ITR 51 (Gujarat)
Court: Gujarat High Court.
Held: By the first proviso to section 149(1), no section 148 notice can be issued for an assessment year if, on the date of issue, it was already time-barred under the pre-Finance Act, 2021 time-limits; the new (longer) periods cannot resurrect a year that had become time-barred as on 1 April 2021. Reopenings of such older years were quashed.
Significance: A leading High Court application of the first-proviso protection, read with Rajeev Bansal's surviving-time computation. (Confirm the precise reported citation before independent reliance.)
'Represented in the form of an asset' — threshold for the extended period
Position: The extended (longer) limitation in section 149 is available only where the income escaping assessment is 'represented in the form of an asset, expenditure in respect of a transaction or in relation to an event or occasion, or an entry in the books' and amounts to or is likely to amount to the prescribed threshold (fifty lakh rupees or more). The AO must, in the section 148A material, demonstrate that the escaped income is so represented and crosses the threshold; a bare assertion does not unlock the extended period.
Candour note: The contours of 'represented in the form of an asset' are being worked out by the High Courts; stated as the statutory requirement read with developing authority.
5. The Touchstone / Keenara divergence on surviving time
Touchstone Holdings (P) Ltd. v. ITO (2022) 451 ITR 196 (Delhi) vs. Keenara Industries (P) Ltd. v. ITO (2023) 453 ITR 51 (Gujarat)
Position: The Delhi High Court (Touchstone Holdings) upheld reassessment notices as within the TOLA-extended/surviving time, while the Gujarat High Court (Keenara Industries) dissented, holding such reopenings of older years time-barred under the first proviso to section 149; the SLP against Keenara was entertained by the Supreme Court. The divergence on how the 'surviving period' under section 149 read with TOLA is to be computed was authoritatively settled by the Supreme Court in Union of India v. Rajeev Bansal (2024) 2024 INSC 754.
Significance: Maps the High-Court split on section 149 surviving-time computation and its resolution in Rajeev Bansal; essential for applying the first proviso to the transitional years.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced from the local Act (base text amended up to the Finance Act, 2025), with the publisher footnote apparatus and amendment-marker brackets removed; Finance Act, 2026 changes are flagged in the commentary. Citations are stated as reported; Tribunal / AAR / High Court orders are flagged. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.
CHAPTER XIV — PROCEDURE FOR ASSESSMENT
Section 149 — Time Limit for Notices under Sections 148 and 148A
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live; substituted by the Finance Act, 2021 and amended by the Finance Act, 2024 (w.e.f. 1 September 2024). Prescribes the outer time-limits for issuing a section 148 notice — the normal period, and the extended period available only where the escaped income represented in the form of an asset/expenditure/entry amounts to or is likely to amount to the prescribed threshold (fifty lakh rupees or more) — together with the crucial first proviso barring reopening that was already time-barred under the pre-2021 law.
FA 2026: The Finance Act, 2026 prescribes that a notice to give effect to a court/appellate order be issued within three months from the end of the quarter in which the order is received (read with sections 148/150/153).
FA 2024 change: The Finance Act, 2024 compressed the extended block (the higher limit now runs to five years and (with the relevant months) is shorter than the earlier ten-year window), and reorganised the thresholds.
A. SECTION COMMENTARY
Section 149 fixes how far back the Department may reach. There is a normal limitation period and an extended period that is available only in serious cases — where the income escaping assessment, represented in the form of an asset, expenditure in respect of a transaction/event, or an entry in the books, amounts to or is likely to amount to fifty lakh rupees or more. The Finance Act, 2024 recalibrated these periods (the extended block being shortened from the earlier ten-year regime). The first proviso is of capital importance: no notice under section 148 can be issued for an assessment year if, on the date of issue, such notice could not have been issued because the time-limit under the pre-substitution law had already expired — preserving accrued immunity.
Two streams of authority govern. The classic principle (S.S. Gadgil) is that once limitation has run, the Revenue's power is extinguished and cannot be revived by later extension absent express retrospectivity. In the transitional context, Rajeev Bansal harmonised section 149 with TOLA to compute the 'surviving' limitation for the deemed notices; and the High Courts (applying the first proviso) have quashed reopenings for older assessment years that were already time-barred under the old law as on 1 April 2021. The threshold and computation are jurisdictional facts that the Revenue must establish.
B. STATUTORY POSITION (verbatim text)
Reproduced from the local Act (base text to the Finance Act, 2025), as amended by the Finance Act, 2024.
149. (1) No notice under section 148 shall be issued for the relevant assessment year,—
(a) if three years and three months have elapsed from the end of the relevant assessment year, unless the case falls under clause (b);
(b) if three years and three months, but not more than five years and three months, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence related to any asset or expenditure or transaction or entries which show that the income chargeable to tax, which has escaped assessment, amounts to or is likely to amount to fifty lakh rupees or more.
(2) No notice to show cause under section 148A shall be issued for the relevant assessment year,—
(a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b);
(b) if three years, but not more than five years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment, as per the information with the Assessing Officer, amounts to or is likely to amount to fifty lakh rupees or more.
C. AUTHORITIES
The authorities cover the extinguishment of barred claims, the TOLA-harmonised surviving period, and the first-proviso protection.
1. Limitation extinguishes the power; surviving time under TOLA
S.S. Gadgil v. Lal & Co. (1964) 53 ITR 231 (SC) [Constitution Bench] — cross-reference
Held: Once the limitation for initiating proceedings has expired, the Revenue's right is extinguished and a subsequent enlargement of the limitation period does not revive a remedy already barred, unless the amendment is expressly retrospective.
Relevance: The doctrinal foundation of the section 149 first proviso and of the limitation analysis generally. (See section 153.)
Union of India v. Rajeev Bansal (2024) 2024 INSC 754 (SC) — cross-reference
Held: TOLA continues to apply to the Income-tax Act for actions falling for completion between 20 March 2020 and 31 March 2021; the section 148 notices consequent on the Ashish Agarwal deemed notices must be issued within the time surviving under section 149 read with TOLA, after excluding the show-cause-to-reply period. The Court laid down the method for computing the 'surviving' or balance limitation.
Significance: The controlling authority on the limitation arithmetic for the transitional reassessments; section 149 is read harmoniously with TOLA. (See section 148.)
2. The first proviso — no reopening of years already time-barred
First-proviso protection — settled High Court position
Position: By the first proviso to section 149(1), a notice under section 148 cannot be issued for an assessment year if it could not have been issued on that date under the time-limits of section 149 as they stood before the Finance Act, 2021 substitution. High Courts (e.g. the Gujarat High Court in the Keenara Industries line and the Delhi High Court in Ganesh Dass Khanna) have applied this to quash reopenings of older assessment years that had already become time-barred under the pre-2021 law as on 1 April 2021, holding that the new regime cannot resurrect a barred year.
Candour note: This is a consistent line of High Court authority applying the first proviso, harmonised with Rajeev Bansal; representative decisions are summarised. The first proviso protects accrued immunity from the extended new-regime periods.
3. Full-and-true disclosure and the extended period
New Delhi Television Ltd. v. Dy. CIT (2020) 424 ITR 607 (SC) — cross-reference
Relevance: Reopening for the extended period requires a failure to disclose fully and truly all material primary facts; where primary facts were disclosed, the extended limitation is not available. The principle survives, in substance, in the structure of the new section 149 (which ties the longer period to escaped income represented by an asset and to the section 148A safeguards). (See section 147.)
S.S. Gadgil v. Lal & Co. (1964) 53 ITR 231 (SC) — cross-reference
Relevance: Once limitation has run, the power is extinguished and cannot be revived by a later extension absent express retrospectivity — the doctrinal basis of the first proviso to section 149. (See section 153.)
4. The first proviso and the surviving-time computation, applied
Keenara Industries (P) Ltd. v. ITO (2023) 453 ITR 51 (Gujarat)
Court: Gujarat High Court.
Held: By the first proviso to section 149(1), no section 148 notice can be issued for an assessment year if, on the date of issue, it was already time-barred under the pre-Finance Act, 2021 time-limits; the new (longer) periods cannot resurrect a year that had become time-barred as on 1 April 2021. Reopenings of such older years were quashed.
Significance: A leading High Court application of the first-proviso protection, read with Rajeev Bansal's surviving-time computation. (Confirm the precise reported citation before independent reliance.)
'Represented in the form of an asset' — threshold for the extended period
Position: The extended (longer) limitation in section 149 is available only where the income escaping assessment is 'represented in the form of an asset, expenditure in respect of a transaction or in relation to an event or occasion, or an entry in the books' and amounts to or is likely to amount to the prescribed threshold (fifty lakh rupees or more). The AO must, in the section 148A material, demonstrate that the escaped income is so represented and crosses the threshold; a bare assertion does not unlock the extended period.
Candour note: The contours of 'represented in the form of an asset' are being worked out by the High Courts; stated as the statutory requirement read with developing authority.
5. The Touchstone / Keenara divergence on surviving time
Touchstone Holdings (P) Ltd. v. ITO (2022) 451 ITR 196 (Delhi) vs. Keenara Industries (P) Ltd. v. ITO (2023) 453 ITR 51 (Gujarat)
Position: The Delhi High Court (Touchstone Holdings) upheld reassessment notices as within the TOLA-extended/surviving time, while the Gujarat High Court (Keenara Industries) dissented, holding such reopenings of older years time-barred under the first proviso to section 149; the SLP against Keenara was entertained by the Supreme Court. The divergence on how the 'surviving period' under section 149 read with TOLA is to be computed was authoritatively settled by the Supreme Court in Union of India v. Rajeev Bansal (2024) 2024 INSC 754.
Significance: Maps the High-Court split on section 149 surviving-time computation and its resolution in Rajeev Bansal; essential for applying the first proviso to the transitional years.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced from the local Act (base text amended up to the Finance Act, 2025), with the publisher footnote apparatus and amendment-marker brackets removed; Finance Act, 2026 changes are flagged in the commentary. Citations are stated as reported; Tribunal / AAR / High Court orders are flagged. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.