Whether show cause notice issued u/s 148A(b) on or after 28.04.2022 is valid or not.. is a question to ponder over, of late, as IT department is issuing the said notices rampantly. For this purpose let us first examine the third proviso to sec 149 which reads as under….

[i]Provided also that for the purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee, as per show-cause notice issued under clause (b) of section 148A or the period during which the proceeding under section 148A is stayed by an order or injunction of any court, shall be excluded:[/i]

From a perusal of the above proviso, it is understood that the intention of legislature is to grant the time lost by the AO in allowing the time to submit the reply by the assessee to the show cause notice issued u/s 148A(b). one thing is to be kept in mind that the total time limit allowed for issuance of notice u/s 148  is 3 years or 10 years as the case may be.  Though 10 years time has been brought by the finance Act, 2021 as against the earlier time limit of 6 years but literally it will come into force only from the A.Y. 2022-23 onwards by virtue of first proviso to sec. 149 of the IT Act. Till that time the old time limits of 6 years holds good. Therefore, let us consider 3 years (1095 days ) and 6 years (2191 days) for our discussion.

suppose show cause notice u/s 148A(b)  is issued on 26.03.2022 and the minimum time  to be allowed is 7 days and therefore, AO should give hearing date as 02.04.2022. Further, as per third proviso because the AO lost only 5 days out of 1095 days,  the time for issuing notice u/s 148 is deemed to have been extended till 05.04.2022. ( 5 days from 01.04.2022). It is pertinent to mention here that from the hearing date ie 02.04.2022 to 05.04.2022 is only 3 days, the time deemed to have been extended upto 09.04.2022 by virtue of 4^th proviso to sec 149 of the Act. However, in this situation, department is considering that AO lost whole 7 days which was allowed in the show cause and accordingly calculating 7 days from 01.04.2022 which according to the department is expiring on 07.04.2022 but from 02.04.2022 to 07.04.2022 is less than 7 days ( only 5 days ), the deemed time extended is considered by the department as 09.04.2022.

In the same way if notice is issued on  27.03.2022 and the minimum time to be allowed is 7 days and therefore, AO should give hearing date as 03.04.2022. Further, as per third proviso because the AO had  lost only 4 days out of 1095 days,  the time for issuing notice u/s 148 is deemed to have been extended till 04.04.2022. ( 4 days from 01.04.2022). It is pertinent to mention here that from the hearing date ie 03.04.2022 to 04.04.2022 is only 1 day, the time deemed to have been extended upto 10.04.2022 by virtue of 4^th proviso to sec 149 of the Act. However, in this situation, department is considering that AO lost whole 7 days which was allowed in the show cause and accordingly calculating 7 days from 01.04.2022 which according to the department is expiring on 07.04.2022 but from 03.04.2022 to 07.04.2022 is less than 7 days ( only 4 days ), the deemed time extended is considered by the department as 10.04.2022.

But if the notice is issued on 28.03.2022 then

the minimum time to be allowed is 7 days and therefore, AO should give hearing date as 04.04.2022. Further, as per third proviso because the AO had  lost only 3 days out of 1095 days,  the time for issuing notice u/s 148 is deemed to have been extended till 03.04.2022. ( 3 days from 01.04.2022). It is pertinent to mention here that  the hearing date is  ie 04.04.2022  and AO s extended time to issue notice u/s 148 expires by  03.04.2022. This situation seems to be impossible. Therefore, the question of invoking 4^th proviso does not arise in this situation. However, in this situation, department is considering that AO lost whole 7 days which was allowed in the show cause and accordingly calculating 7 days from 01.04.2022 which according to the department is expiring on 07.04.2022 but from 04.04.2022 to 07.04.2022 is less than 7 days ( only 3 days ), the deemed time extended is considered by the department as 11.04.2022.

Accordingly, the show cause notices issued on or after 28.03.2022 are invalid in my opinion. But as per the market information, incometax department continued to issue show cause notices even after 28.03.2022 also. Therefore, there appears to be a great possibility of winning the case if argued considering the above line of thought provided a writ is filed against the show cause notices issued on or after 28.03.202 and subsequently issued notices u/s 148.

Further, as mentioned above,. Extention to issue notice u/s 148 will be deemed to have extended only for the time lost in 1095 days or 2191 days as the case may be. Suppose AO issues show cause notice u/s 148A(b) on 23.03.2022 and the time allowed in that show cause notice is 7 days which actually was 30.03.2022  and on a request made by the assessee the AO allowing further time upto 10.04.2022, then as per 3^rd proviso the deemed extention is only 08.04.2022 but not 18.04.2022 as was calculating by the incometax department.  Because the word used is excluded means what is included can only be excluded. In the situation narrated above, from 23.03.2022 to 31.03.2022 is only included in 3 years or 6 years as the case may be. The further time given by the AO ie from 31.03.2022 to 10.04.2022 is not included in 3 years or six years as the case may be ( except the day of 31.03.2022)… Therefore, if any order passed u/s 148A(d) after 08.04.2022 and any notice issued u/s 148 after 08.04.2022 is invalid.

Whether above line of thought is correct or not