Case Note & Summary
The petitioner filed a writ petition under Article 226 of the Constitution of India to quash a reassessment notice issued under Section 148 of the Income Tax Act, 1961 for Assessment Year 2015-16, based on documents seized during a search on 09.05.2024. The petitioner argued that the notice was time-barred under the proviso to Section 149(1)(b) of the Income Tax Act, 1961, as the reassessment should have been governed by Section 153A of the Income Tax Act, 1961 as it existed before amendments by Finance Act, 2021. The respondent opposed, citing incriminating material. The Court, following a precedent, allowed the petition, holding the notice invalid due to non-compliance with statutory time limits under the applicable provisions.
Headnote
The High Court of Gujarat at Ahmedabad allowed a writ petition filed under Article 226 of the Constitution of India -- The petitioner challenged a notice issued under Section 148 of the Income Tax Act, 1961 dated 31.03.2025 for reassessment of income for Assessment Year 2015-16 -- The notice was based on documents seized during a search under Section 132 of the Income Tax Act, 1961 on 09.05.2024 -- The Court held that the reassessment proceedings were governed by pre-amendment provisions due to the search falling within a specified period -- Applying the proviso to Section 149(1)(b) of the Income Tax Act, 1961, the Court found that the notice could not be issued as it was beyond the time limit specified under Section 153A of the Income Tax Act, 1961 as it stood before the Finance Act, 2021 -- The Court relied on its earlier decision in Special Civil Application No. 16615 of 2025 dated 05.01.2026 -- The impugned notice was quashed and set aside
Issue of Consideration
The Issue of whether the reassessment notice under Section 148 of the Income Tax Act, 1961 was valid given the amendments introduced by Finance Act, 2021 and the search conducted on 09.05.2024
Final Decision
The Court allowed the writ petition, quashed and set aside the impugned notice under Section 148 of the Income Tax Act, 1961 dated 31.03.2025, and directed no further proceedings under Section 143(3) read with Section 147 of the Income Tax Act, 1961
Law Points
- Interpretation of Sections 147 to 151 of the Income Tax Act
- 1961 as amended by Finance (No.2) Act
- 2024 and Finance Act
- 2021 -- Application of Section 153A and Section 153C of the Income Tax Act
- 1961 for search-based reassessments -- Proviso to Section 149(1)(b) of the Income Tax Act
- 1961 regarding time limits for issuing notices under Section 148 -- Jurisdiction under Article 226 of the Constitution of India to quash invalid reassessment proceedings
Case Details
2026 LawText (GUJ) (01) 599
R/Special Civil Application No. 18013 of 2025
A.S. Supehia J. , Pranav Trivedi J.
Mr. Hardik V Vora for the Petitioner, Mr. Karan G Sanghani for the Respondent
Ravindra Motibhai Prajapati
Income Tax Officer, Ward 2(3)(4) Surat
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Nature of Litigation
Writ petition under Article 226 of the Constitution of India challenging a reassessment notice under the Income Tax Act, 1961
Remedy Sought
The petitioner asked the court to quash the notice under Section 148 of the Income Tax Act, 1961 and to direct the respondent not to proceed with the reassessment
Filing Reason
The petitioner filed the petition after the respondent issued a reassessment notice based on documents seized during a search, which the petitioner claimed was invalid due to time limits under amended provisions
Previous Decisions
The respondent had issued the notice under Section 148 of the Income Tax Act, 1961, the petitioner filed objections, and the respondent passed an order disposing of objections on 17.11.2025
Issues
Whether the reassessment notice under Section 148 of the Income Tax Act, 1961 was valid given the amendments by Finance Act, 2021 and the search date of 09.05.2024
Submissions/Arguments
The petitioner argued that the notice was time-barred under the proviso to Section 149(1)(b) of the Income Tax Act, 1961 as the reassessment should be governed by Section 153A of the Income Tax Act, 1961 as it stood before Finance Act, 2021
The respondent opposed, contending that the notice was based on incriminating material found during the search
Ratio Decidendi
Reassessment proceedings initiated based on a search conducted on or after 01.04.2021 must comply with the time limits and conditions under Section 153A of the Income Tax Act, 1961 as it existed before the Finance Act, 2021, and if the notice under Section 148 of the Income Tax Act, 1961 is issued beyond such limits, it is invalid
Judgment Excerpts
The writ petition deserves to be allowed only on the sole reason as the impugned notice issued under Section 148 of the Act for reopening on the basis of search travelling beyond the time limit
It is submitted that in the present case the year under consideration is Assessment Year 2015-16, and as per proviso to Section 149(1)(b) of the Act no notice under Section 148 of the Act can be issued at any time in case for the relevant Assessment Year beginning on or before 1 st day of April, 2021
Procedural History
The petitioner filed income return for Assessment Year 2015-16 on 31.03.2016 -- A search under Section 132 of the Income Tax Act, 1961 was conducted on 09.05.2024 -- The respondent issued notice under Section 148 of the Income Tax Act, 1961 on 31.03.2025 -- The petitioner filed objections on 08.04.2025, 02.05.2025, and 26.05.2025 -- The respondent issued notice under Section 143(2) of the Income Tax Act, 1961 on 23.06.2025 -- The petitioner filed replies on 26.06.2025 and 11.07.2025 -- The respondent passed an order disposing of objections on 17.11.2025 -- The petitioner filed the writ petition on 20.01.2026
Acts & Sections
- Income Tax Act, 1961: Section 132, Section 143(2), Section 143(3), Section 147, Section 148, Section 149, Section 151, Section 153A, Section 153C
- Constitution of India: Article 226
- Finance (No.2) Act, 2024: Not specified
- Finance Act, 2021: Not specified
