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.
"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
The framework: Three-year general period or ten-year exceptional window (≥₹50 lakh escaped income represented in asset/expenditure/entry). Scroll down for the limitation timeline, threshold analysis, and step-by-step worked example with page-linked citations.
How to Run Section 149 Limitation Checks on Suit
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. Each conclusion is one click away from the underlying paragraph.
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 to the cited paragraph or section of law.
Notes
Inline date recognition and AY mapping; “issue vs service” tagging; threshold and representation classifier per §149 explanations
Tabulate
Per-notice grid showing: AY, issue date, elapsed days, threshold test, representation category, approval path, §148A timestamps, limitation clause
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.[1]
Section 149(1) — Income-tax Act, 1961
(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 morefor that year and such income is represented in the form of an asset orexpenditure in respect of a transaction or in relation to an event or occasionor an entry or entries in the books of account…”
§149 Limitation Timeline (Post-2021)
0–3 Years
General Limitation
§149(1)(a) — No threshold required
3–10 Years
Extended Limitation (Exceptional Cases)
§149(1)(b) — ≥₹50 lakh escaped income + “represented” in asset/expenditure/entry
>10 Years
Absolute Bar
No notice permissible
Key Statutory Elements
| Element | Requirement | Authority |
|---|---|---|
| General Bar (§149(1)(a)) | No §148 notice if 3 years have elapsed from AY-end | [4] §149(1)(a) |
| Extended Window (§149(1)(b)) | >3 but ≤10 years — only if escaped income ≥₹50 lakh AND represented in specified forms | [4] §149(1)(b) |
| Threshold Test | Income chargeable to tax "amounts to or is likely to amount to" ₹50 lakh or more — for that specific AY | [2] CBDT Instr. |
| "Represented" Requirement | Must be represented as: (i) asset, (ii) expenditure re: transaction/event, or (iii) book entry | [4] §149(1)(b) |
| §148A Gateway | Mandatory pre-notice procedure: §148A(b) show-cause → opportunity → §148A(d) order | [1] Ashish Agarwal |
| Issue vs Service | Limitation runs to "issue" (not "service") of notice; service is condition to assessment order | [3] R.K. Upadhyaya |
Judicial Guardrails: Key Supreme Court Authorities
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
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 and mandating new-scheme compliance.
R.K. Upadhyaya v. Shanabhai P. Patel
'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. Service is a condition precedent to assessment, not to reopening jurisdiction.
J.P. Jani v. Induprasad D. Bhatt
Transition provisions cannot revive a right to reopen that was already time-barred under the old Act — 'unless express language or necessary implication.' Analogous principle applies to §149 transition provisos.
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. Any notice issued after 1-4-2021 must comply with the substituted scheme.[1]
Application
Application: Automated Limitation Review Workflow
Here's 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.[3]
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 (no aggregation across AYs).[2]
Classify 'Representation' Type
If threshold met: classify whether escaped income is “represented” as (i) asset, (ii) expenditure re: transaction/event, or (iii) book entry.
Verify §148A Gateway Compliance
Check: §148A(b) notice issued? Material/information disclosed? Reply window given? §148A(d) order passed within time? Approvals obtained?[1]
Select Applicable Clause & Generate Memo
Output: §149(1)(a) vs §149(1)(b); limitation verdict (within/time-barred); CREAC memo with pinpoint footnotes to each cited paragraph, page, and provision.
Worked Example: Step-by-Step Analysis
Hypothetical Illustration
The following is a fictional example for educational purposes. Actual limitation analysis requires careful review of the specific facts and documents in each case.
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 | Authority |
|---|---|---|---|
| 1. AY-End | AY 2019-20 ends on | 31-03-2020 | Notice header (uploaded) |
| 2. Notice Issue Date | Issue date (not service) | 15-02-2025 | [3] R.K. Upadhyaya |
| 3. Elapsed Time | From 31-03-2020 to 15-02-2025 | 4 years, 10 months, 15 days | §149 scheme |
| 4. Threshold Test | ₹48,75,000 vs ₹50,00,000 | NOT MET (shortfall: ₹1,25,000) | [2] CBDT Instr. |
| 5. Clause Selection | Elapsed >3 years → §149(1)(a) limit exceeded Threshold not met → §149(1)(b) unavailable | TIME-BARRED | [4] §149 |
TIME-BARRED
Elapsed: 4y 10m 15d • Threshold: ₹48.75L < ₹50L • Clause: §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.
Contrast: A Notice Within Limitation
Now consider a notice issued on 29 March 2024 for AY 2017-18, alleging escaped income of ₹1.10 crore represented in the form of a capital asset acquisition.
Limitation Computation — Within Time
| Item | Value | Authority |
|---|---|---|
| AY | 2017-18 | Notice header |
| AY-End | 31-03-2018 | — |
| Notice Issue Date | 29-03-2024 | Postal docket |
| Elapsed | ~6 years (from AY-end) | §149 scheme |
| Alleged Escaped Income | ₹1.10 crore | Annexure quantification |
| Representation | Capital asset acquisition (FY 2016-17) | [4] §149(1)(b) |
| Applicable Clause | §149(1)(b) (3–10 years, ≥₹50L represented) | [2] CBDT Instr. |
| Gateway Check | §148A(b) info supplied; §148A(d) order within time | [1] Ashish Agarwal |
WITHIN LIMITATION
Elapsed: ~6 years • Threshold: ₹1.10 crore ≥ ₹50L ✓ • Clause: §149(1)(b) applies
Conclusion
KEY TAKEAWAY
Instant §149 Analysis: Elapsed time from AY-end, ₹50-lakh threshold tests, representation classification, and clause selection — all with page-linked citations. Polished memos ready to attach to the client's response. Reviews that once required a team now finish in minutes.
Common Pitfalls in §149 Analysis
Practitioners and assessing officers alike must avoid these common errors in §149 limitation analysis:
Confusing “Issue” vs “Service” Dates
Limitation runs to “issue” (not “service”) of notice. Service is a condition precedent to making the assessment order, not to vesting jurisdiction.[3]
Aggregating Across Assessment Years
The ₹50-lakh threshold must be met for the specific assessment year. Income cannot be aggregated across multiple AYs. Delhi HC has categorically held this in multiple decisions.[2]
Overlooking the “Represented” Requirement
For the extended 10-year period, escaped income must be “represented in the form of an asset, expenditure, or entry in books.” Mere suspicion or conjecture is insufficient — the AO must possess “credible material.”[4]
Assuming Transition Revives Time-Barred Years
Transition provisions cannot revive a right to reopen that was already time-barred under the old Act — J.P. Jani principle. New §149 does not resurrect dead claims.[5]
Ignoring §148A Gateway Compliance
Post-Ashish Agarwal, all notices (including “old” ones deemed as §148A(b)) must comply with the new gateway: information disclosure, opportunity to respond, reasoned §148A(d) order, and proper approvals. Non-compliance is fatal.[1]
§149 Limitation Analysis Checklist
Extract AY from notice header; compute AY-end (31 March of that AY).
Identify “issue” date (not service) from postal docket, dispatch log, or portal timestamp. [3]
Compute elapsed time from AY-end to issue date; classify as ≤3, 3–10, or >10 years.
If >3 years: extract alleged escaped income quantum; test against ₹50L threshold for that specific AY (no aggregation). [2]
If threshold met: classify “representation” type — asset, expenditure, or book entry. [4]
Verify §148A gateway compliance: §148A(b) notice, information disclosure, reply window, §148A(d) order, approvals. [1]
Check transition provisions: new §149 applies; J.P. Jani non-revival principle. [5]
Select applicable clause: §149(1)(a) vs §149(1)(b); record outcome with pinpoint footnotes.
Appendix: Key Statutory & Judicial Excerpts
(2022) SCC OnLine SC 543 (per Shah, J.) — Union of India v. Ashish Agarwal
¶6.1 (quoting Finance Act, 2021 text) — CBDT Instruction 01/2022
(1987) 3 SCC 96 — R.K. Upadhyaya v. Shanabhai P. Patel
(1969) 72 ITR 595 (SC) — J.P. Jani v. Induprasad D. Bhatt
Sources & Further Reading
[1]
Union of India v. Ashish Agarwal (2022) SCC OnLine SC 543
Supreme Court on §148A procedure, §149 safeguards, and deeming fiction for old-regime notices
[View]
[2]
CBDT Instruction No. 01/2022 (11 May 2022)
Implementation of SC judgment; operation of new §149; uniform directions for AOs
[View]
[3]
R.K. Upadhyaya v. Shanabhai P. Patel (1987) 3 SCC 96
"Issue" vs "service" distinction for limitation; jurisdiction vests on issuance
[View]
[4]
Income-tax Act, 1961 — Section 149 (as substituted by Finance Act, 2021)
Limitation framework: 3-year general bar; 10-year extended window with ₹50L threshold
[View]
[5]
J.P. Jani v. Induprasad D. Bhatt (1969) 72 ITR 595 (SC)
Transition cannot revive time-barred proceedings; non-revival principle
[View]
[6]
Ram Balram Buildhome Pvt. Ltd. v. ITO (Delhi HC, 30 Jan 2025)
Treatment of TOLA and §149 provisos in post-Ashish Agarwal context
[View]
Run Your §149 Limitation Analysis Now
Upload your §148A notices, show-cause orders, and annexures. Get elapsed time, threshold tests, and clause selection — with page-linked citations in minutes.
Contents
Topics
Continue Reading
Discussion
Comments • Share your thoughts and questions below