Tax & Compliance

Section 149 Reassessment Limitation: Automated Analysis with Page-Linked Citations

Upload notices and show-cause orders once. Get elapsed time from AY-end, ₹50-lakh threshold tests, and clause selection—each conclusion linked to source paragraphs.

Pranay ShahPartner, CNGSN & Associates LLP

November 22, 2025

14 min read

TwLiLink

"Within minutes, it computed elapsed time from AY-end, applied the ₹50-lakh threshold, and selected the appropriate clause under §149—each computation tied to the exact page and paragraph."

Pranay Shah

Partner, CNGSN & Associates LLP

<10 min

Analysis Time

100%

Citation-Linked

3 Steps

Upload to Memo

Headnote

The framework: Three-year general period or ten-year exceptional window (≥₹50 lakh escaped income represented in asset/expenditure/entry). This article details the §149 limitation timeline, threshold analysis, and a worked example with page-linked citations.

How to Run Section 149 Limitation Checks

Running a limitation analysis on jhana Suit takes three steps. Upload your documents, let the system extract the key dates and figures, and receive a memo with clause selection and citations.

Upload Documents

Upload the reassessment notice, §148A(b) show-cause, §148A(d) order, and any annexures. Suit accepts scanned PDFs, Word documents, and images — handwritten or typed.

Automatic Extraction

The system extracts: assessment year, document dates, alleged quantum, and “representation” type (asset/expenditure/entry). Each extraction links to its source page.

Compute & Select Clause

Elapsed time from AY-end is computed. The ₹50-lakh threshold is tested. The applicable §149 clause is selected. A memo is generated with pinpoint footnotes.

Feature: Notes

Inline date recognition and AY mapping; “issue vs service” tagging; threshold and representation classifier.

Feature: Tabulate

Per-notice grid showing: AY, issue date, elapsed days, threshold test, representation category, approval path, §148A timestamps.

Feature: Preview

Verify against the original document with synchronized highlighting — click any footnote to jump to source.

Legal Framework: IRAC Analysis

ISSUE

When are reassessment notices issued after 1 April 2021 within limitation under §149? Practitioners face these key determinations:

Elapsed time from AY-end to “issue” date (not service date)
Whether alleged escaped income meets the ₹50-lakh threshold
Whether escaped income is “represented” in asset/expenditure/entry form
Compliance with §148A gateway procedure and approval requirements
Applicability of transition provisions and deeming fictions

RULE

Statutory Framework: §149 (Post-2021)

The Finance Act, 2021 fundamentally restructured the reassessment regime by substituting Sections 147, 148, 149, and 151 with effect from 1 April 2021. The new regime introduces stringent limitation periods and threshold-based gatekeeping mechanisms.

Section 149(1) — Income-tax Act, 1961

“149. (1) No notice under section 148 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 ten years, have elapsed from the end of the relevant assessment year, unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year and such income is represented in the form of an asset or expenditure in respect of a transaction or in relation to an event or occasion or an entry or entries in the books of account…”

§149 Limitation Timeline (Post-2021)

0–3 Years

§149(1)(a)

General Limitation

3–10 Years

§149(1)(b)

Extended Limitation

(≥₹50 lakh escaped + represented)

>10 Years

Barred

No Notice Permissible

Element	Requirement
General Bar (§149(1)(a))	No §148 notice if 3 years have elapsed from AY-end
Extended Window (§149(1)(b))	>3 but ≤10 years — only if escaped income ≥₹50 lakh AND represented
Threshold Test	Income chargeable to tax ≥ ₹50 lakh for that specific AY
"Represented" Requirement	Must be asset, expenditure, or book entry
§148A Gateway	Mandatory pre-notice procedure: §148A(b) show-cause → §148A(d) order
Issue vs Service	Limitation runs to "issue" of notice

Key elements for §149 limitation analysis

Judicial Guardrails

The following judgments establish the interpretive framework for §149 limitation — critical for any automated analysis that may form part of legal proceedings.

Union of India v. Ashish Agarwal

2022 SCC OnLine SC 543 • Supreme Court of India (2022)

Substituted §149 'reduced the permissible time limit … to three years and only in exceptional cases ten years.' SC deemed old-regime §148 notices (issued after 1-4-2021) as §148A(b) show-cause, preserving all §149 defences for assessees.

[Full Text]

R.K. Upadhyaya v. Shanabhai P. Patel

(1987) 3 SCC 96 • Supreme Court of India (1987)

'A clear distinction has been made … between 'issue of notice' and 'service of notice' under the 1961 Act.' Limitation under §149 runs to 'issue' — once issued within limitation, jurisdiction vests.

[Full Text]

The Ashish Agarwal Deeming Fiction

The Supreme Court's deeming fiction (old §148 → §148A(b)) is a lifeline for assessees: it preserves all §149 defences under the new scheme and requires AOs to re-commence under §148A with information sharing, reply opportunity, and fresh approval.

APPLICATION

Automated Limitation Review Workflow

Here is how jhana Suit operationalises the §149 framework — from document upload to CREAC-structured memo output:

Extract AY and AY-End Date

Parse assessment year from notice header; compute AY-end as 31 March of that AY. Example: AY 2017-18 → AY-end = 31-03-2018.

Identify Issue Date (Not Service)

Extract "issue" date from postal docket, dispatch log, or portal timestamp — per R.K. Upadhyaya, limitation runs to issue, not service.

Compute Elapsed Time

Calculate days/years from AY-end to issue date. Classify as: ≤3 years (general) or >3 and ≤10 years (extended) or >10 years (absolute bar).

Test ₹50-Lakh Threshold

If >3 years: extract alleged escaped income quantum from annexures. Test against ₹50,00,000 threshold — must be met for that specific AY.

Classify 'Representation' Type

If threshold met: classify whether escaped income is "represented" as (i) asset, (ii) expenditure re: transaction/event, or (iii) book entry.

Select Applicable Clause & Generate Memo

Output: §149(1)(a) vs §149(1)(b); limitation verdict (within/time-barred); CREAC memo with pinpoint footnotes.

Worked Example: Step-by-Step Analysis

Consider a reassessment notice issued on 15 February 2025 for Assessment Year 2019-20 (Financial Year 2018-19), alleging escaped income of ₹48,75,000 on account of unexplained cash credits under Section 68 of the Act.

Limitation Computation Worksheet

Step	Parameter	Value
1. AY-End	AY 2019-20 ends on	31-03-2020
2. Notice Issue Date	Issue date (not service)	15-02-2025
3. Elapsed Time	From 31-03-2020 to 15-02-2025	4 years, 10 months, 15 days
4. Threshold Test	₹48,75,000 vs ₹50,00,000	NOT MET (shortfall: ₹1,25,000)
5. Clause Selection	Elapsed >3 years, Threshold not met	TIME-BARRED

Each row links back to an uploaded page or binding authority

TIME-BARRED

Elapsed: 4y 10m 15d • Threshold: ₹48.75L < ₹50L

Reasoning: §149(1)(a) exceeded; §149(1)(b) unavailable

Conclusion: The notice is time-barred. It was issued beyond the 3-year limit under §149(1)(a) but fails to meet the ₹50-lakh threshold required for the extended 10-year period under §149(1)(b). The limitation defence is available to the assessee.

Common Pitfalls in §149 Analysis

Confusing "Issue" vs "Service" Dates

Limitation runs to "issue" of notice. Service is a condition precedent to assessment, not jurisdiction.

Aggregating Across Assessment Years

The ₹50-lakh threshold must be met for the specific assessment year. Income cannot be aggregated across multiple AYs.

Ignoring §148A Gateway Compliance

All notices must comply with the new gateway: information disclosure, opportunity to respond, reasoned order, and approvals.

References

[1]

Union of India v. Ashish Agarwal (2022) SCC OnLine SC 543. Supreme Court on §148A procedure, §149 safeguards, and deeming fiction

[Source]

[2]

CBDT Instruction No. 01/2022 (11 May 2022). Implementation of SC judgment; operation of new §149

[Source]

[3]

R.K. Upadhyaya v. Shanabhai P. Patel (1987) 3 SCC 96. "Issue" vs "service" distinction for limitation

[Source]

[4]

Income-tax Act, 1961 — Section 149. Limitation framework: 3-year general bar; 10-year extended window

[Source]

Index Keywords

Section 149 Reassessment Limitation Period ₹50 Lakh Threshold Income Tax 148A Procedure Tax Compliance Legal AI Ashish Agarwal CBDT Instruction Time-Barred Notice AY-End Calculation Issue vs Service Finance Act 2021 TOLA Tax Litigation