M/s. Rama Ltd. filed its return of income claiming deduction for bad debts. The return was processed u/s 143(1)(a) of Income-tax Act, 1961.…

Issue Involved: The issue under consideration is whether notice issued under section 148A during the pendency of the rectification proceedings initiated under section 154 is valid on the ground that the notice under section 154 was issued after the expiry of the time limit prescribed under section 154 (7) . Provision applicable: As per section 154 (7) , no amendment under section 154 shall be made after the expiry of four years from the end of the financial year in which the order sought to be amended was passed. Analysis: In the absence of any specific order of withdrawal of the proceedings under section 154 on the ground that the same was beyond the period of limitation prescribed under section 154 (7) , the proceedings initiated under section 154 can be said to have been pending. During the pendency of the proceedings under section 154, it was not permissible on the part of the revenue to initiate the proceedings under section 148A. Conclusion: In the present case, notice under section 148A was issued during the pendency of the proceedings under section 154. Thus, notice issued under section 148A is illegal. Note – The facts given in the question are similar to the facts in S.M. Overseas (P) Ltd. v. CIT (2023) 450 ITR 1/14 SCC 111 (SC). The above answer is based on the rationale of the Apex Court ruling in the said case. The said ruling is in respect of erstwhile section 148, however, the same can be applied in the case on hand.