Case Note & Summary
The petitioner, Amrita Aditya Shah, filed a petition under Article 226 of the Constitution of India challenging a notice dated 28.07.2022 issued under section 148 of the Income Tax Act, 1961 for Assessment Year 2016-2017. The Assessing Officer had initially issued a notice on 30.06.2021 under section 148, relying on the extended time period provided by the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (TOLA). However, the Supreme Court in Union of India v. Ashish Agarwal (2022) 444 ITR 1 (SC) directed that such notices be treated as notices under section 148A(b) of the Act, which came into effect from 01.04.2021. Subsequently, the Supreme Court in Union of India v. Rajeev Bansal (2024) 469 ITR 46 (SC) laid down the law to determine the validity of such notices based on the time remaining between the date of issuance of the notice under section 148 read with section 3(1) of TOLA up to 30.06.2021 and the issuance of notice under section 148 pursuant to the directions in Ashish Agarwal. The Gujarat High Court, following its earlier decision in Dhanraj Govindram Kella v. Income Tax Officer (judgment dated 08.07.2025), held that the notice was time-barred. The court reasoned that the limitation period for issuing a notice under section 148 for AY 2016-2017 expired on 31.03.2021, and TOLA could not extend the limitation beyond that date. Therefore, the notice issued on 30.06.2021 was invalid. The court quashed the notice and the subsequent proceedings.
Headnote
A) Income Tax - Reassessment - Limitation - Section 148, 149 Income Tax Act, 1961 - Section 3(1) Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 - The court considered whether a notice under section 148 issued on 30.06.2021 for AY 2016-2017 was time-barred. The court held that the extended period under TOLA cannot revive a limitation that had already expired before 31.03.2021. Since the original limitation for AY 2016-2017 expired on 31.03.2021, the notice issued on 30.06.2021 was invalid. (Paras 1-6)
Issue of Consideration
Whether the reassessment notice under section 148 of the Income Tax Act, 1961 issued on 30.06.2021 for Assessment Year 2016-2017 is valid in light of the limitation period and the provisions of TOLA
Final Decision
The court allowed the petition and quashed the notice under section 148 of the Income Tax Act, 1961 dated 28.07.2022 and all consequential proceedings as being time-barred.
Law Points
- Reassessment notice under section 148 must be issued within the limitation period as per section 149 of the Income Tax Act
- 1961
- TOLA cannot extend limitation beyond the period available on 31.03.2021
- Notice issued after expiry of limitation is invalid
Case Details
2026 LawText (GUJ) (03) 208
R/Special Civil Application No. 17039 of 2022
Honourable Mr. Justice A.S. Supehia, Honourable Mr. Justice Pranav Trivedi
Mr. Dhinal A. Shah for the petitioner, Mr. Varun K. Patel, Senior Standing Counsel for the respondent
Assistant Commissioner of Income Tax, Circle (International Taxation) 1, Ahmedabad
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Nature of Litigation
Writ petition under Article 226 challenging reassessment notice under section 148 of Income Tax Act
Remedy Sought
Quashing of notice dated 28.07.2022 under section 148 of the Income Tax Act, 1961 for Assessment Year 2016-2017
Filing Reason
Notice was issued beyond the limitation period and was invalid
Previous Decisions
Notice originally issued on 30.06.2021 under section 148, treated as notice under section 148A(b) per Ashish Agarwal; subsequent notice under section 148 issued on 28.07.2022
Issues
Whether the reassessment notice under section 148 of the Income Tax Act, 1961 issued on 30.06.2021 for Assessment Year 2016-2017 is valid in light of the limitation period and the provisions of TOLA
Submissions/Arguments
Petitioner argued that the notice was time-barred as the limitation period expired on 31.03.2021 and TOLA cannot extend it beyond that date
Respondent relied on TOLA to justify the extended time for issuance of notice
Ratio Decidendi
The limitation period for issuing a notice under section 148 of the Income Tax Act, 1961 for Assessment Year 2016-2017 expired on 31.03.2021. The extended period under TOLA cannot revive a limitation that had already expired before 31.03.2021. Therefore, the notice issued on 30.06.2021 and the subsequent notice dated 28.07.2022 are invalid.
Judgment Excerpts
This petition is filed under Article 226 of the Constitution of India challenging the notice under section 148 of the Income Tax Act, 1961 (For short 'the Act') dated 28.07.2022 on the ground that the notice and the order would be invalid and time barred.
The Hon'ble Apex Court in case of Union of India v. Rajeev Bansal reported in (2024) 469 ITR 46 (SC) has laid down the law to consider such notice as valid notice or invalid notice depending upon the surviving time left between the date of issuance of notice under section 148 of the Act read with section 3(1) of TOLA upto 30.06.2021 and the issuance of notice under section 148 pursuant to the directions issued by the Hon'ble Apex Court in case of Ashish Agarwal (supra).
Procedural History
The Assessing Officer issued notice under section 148 on 30.06.2021 for AY 2016-2017. Pursuant to Supreme Court directions in Ashish Agarwal, the notice was treated as under section 148A(b). Thereafter, a fresh notice under section 148 was issued on 28.07.2022. The petitioner challenged the notice by filing Special Civil Application No. 17039 of 2022 before the Gujarat High Court.
Acts & Sections
- Income Tax Act, 1961: 148, 148A(b), 149
- Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020: 3(1)
- Constitution of India: 226
