Time extended by corrigendum for filing reply is excludable for determining the limitation period of reassessment notices.

The Petitioner, an NRI residing in Dubai, maintained NRE and savings accounts in India

For Assessment Year (AY) 2018-19, the Income Tax Department flagged transactions totaling ₹9,28,66,191/- (foreign remittances, interest, and time deposits) via the Insight Portal

On 22.03.2022, the Respondent issued a notice under Section 148A(b), providing only six days to reply (until 28.03.2022)

The Petitioner replied on 26.03.2022, asserting that the funds were inter-bank transfers or gifts from his father and that interest income was below the taxable threshold or exempt under Section 10(4)(ii)

The Assessing Officer (AO) issued corrigenda on 31.03.2022 and 01.04.2022, extending the reply deadline to 02.04.2022 to rectify the statutory shortfall of the seven-day notice period

Subsequently, an order under Section 148A(d) and a notice under Section 148 were issued on 07.04.2022

The Petitioner challenged these on grounds of limitation, lack of jurisdiction of the Jurisdictional Assessing Officer (JAO), and absence of "escaped income."

1. Whether the notice issued under Section 148 was barred by limitation under Section 149 of the Act.

2. Whether the Jurisdictional Assessing Officer (JAO) had the authority to issue the notice in view of the Faceless Assessment Scheme and Section 151A.

3. Whether the corrigenda issued by the AO validly extended the limitation period by invoking the third proviso to Section 149.

4. Whether the writ court should interfere with the reassessment on merits regarding the Petitioner’s NRI status and tax exemptions.

The court applied Section 148A and Section 149 of the Income Tax Act, 1961, particularly the third proviso to Section 149, which excludes the time allowed to an assessee to reply to a show-cause notice when computing limitation

Regarding jurisdiction, it relied on TKS Builders Pvt. Ltd. v. ITO, which affirms the concurrent authority of JAOs and Faceless AOs

For the scope of judicial review, it applied AGR Investment Limited v. ACIT, holding that writ courts should not conduct roving enquiries into the sufficiency of material for reopening an assessment

It further noted Section 10(4)(ii), which exempts NRE account interest subject to FEMA compliance and RBI permission

The Court first addressed the limitation plea, holding that while the initial notice gave less than the mandatory seven days, the corrigendum issued on 31.03.2022 (within the limitation period) cured this defect by extending the time to 02.04.2022

By operation of the third proviso to Section 149, this 11-day window was excluded, bringing the 07.04.2022 notice within the three-year limit

Consequently, the PCIT was the "specified authority" competent to grant sanction under Section 151

On jurisdiction, the Court rejected the Petitioner's claim that only a Faceless AO could act, citing settled law on concurrent jurisdiction

Regarding the merits, the Court observed that the Petitioner had not produced essential documents, such as RBI permission for the NRE account, during the 148A proceedings

It reasoned that whether the ₹8.5 crore was a non-taxable gift or if the Petitioner strictly met FEMA criteria for exemptions are factual determinations to be made by the AO, not the writ court

The Court declined to quash the Section 148 notice, ruling that the AO must be satisfied regarding the Petitioner's documentary evidence and tax liability

However, it granted the Petitioner liberty to urge all factual and legal defenses, including NRI exemptions and the nature of the remittances, before the AO during the reassessment process