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Section 148 of the Income-tax Act, 1961 - Income escaping assessment - Issue of notice for - Assessment year 1991-92 - Whether proviso inserted vide Finance Act, 2006 with effect from 1-10-1991 to section 148, which makes limitation of 12 months for issuing notice under section 143(2) inapplicable to returns filed after 1-10-1991 for reassessment/ recomputation of tax if such reassessment/recomputation was otherwise within limitation, is constitutionally valid - Held, yes FACTS The assessee filed the instant petition challenging the constitutional validity of proviso to section 148, which makes limitation of 12 months for issuing notice under section 143(2) inapplicable to the returns filed after 1-10-1991 for reassessment/recomputation of tax, if said reassessment was otherwise within limitation. The assessee further contended that normal period specified under section 143(2) for issuing notice is 12 months but the same has been made inapplicable for the period from 1-10-1991 to 30-9-2005 to returns filed after 1-10-1991 for reassessment/recomputation of tax, if such reassessment/recomputation was otherwise within limitation. It was further submitted that apart from vice of retrospectivity, the provision was discriminatory for selecting special period of limitation for the specified period, thereby creating a special class arbitrarily, without there being any nexus of such classification with the object of the statute. HELD No doubt, article 14 prohibits discrimination and if a provision is discriminatory, the same will be liable to be declared unconstitutional. The proviso to section 148 is applicable to a defined class where return has been filed from 1-10-1991 to 30-9-2005 in response to notice served under section 143(2) after expiry of 12 months but before expiry of time-limit for making the assessment, reassessment or recomputation under the Act. Thus, the said provision validates notices which were within time for assessment, reassessment or recomputation, though beyond period of 12 months specified in section 143(2). This appears to have been necessitated on account of period of 12 months specified under section 143(2), being made applicable also to…

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