Case Note & Summary
The petitioner, Hansaben Hasmukhbhai Gadhiya, filed a Special Civil Application under Article 226 of the Constitution of India challenging a notice dated 12.07.2022 issued under section 148 of the Income Tax Act, 1961 for the Assessment Year 2017-2018. The respondent was the Income Tax Officer, Ward 1. The petitioner contended that the notice was invalid and time-barred. The background involved an earlier notice dated 11.06.2021 issued under section 148 during the extended time period under the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (TOLA). Following the Supreme Court's decision in Union of India v. Ashish Agarwal, this notice was to be treated as a notice under section 148A(b) of the Act, which came into effect from 01.04.2021. Subsequently, the Assessing Officer issued the impugned notice dated 12.07.2022 under section 148. The legal issue was whether this notice was valid in light of the 'surviving time' principle laid down in Union of India v. Rajeev Bansal. The court considered the submissions of both parties. The petitioner argued that the notice was time-barred, while the respondent relied on the TOLA extension. The court analyzed the principle from Rajeev Bansal and its own decision in Dhanraj Govindram Kella v. Income Tax Officer, which held that the validity of such notices depends on the surviving time between the date of issuance under TOLA and 30.06.2021. Applying this test, the court found that the notice under TOLA was issued on 11.06.2021, leaving only 19 days until 30.06.2021. The subsequent notice under section 148 was issued on 12.07.2022, which was beyond the permissible period. Therefore, the court held that the impugned notice was invalid and time-barred. The petition was allowed, and the notice was quashed.
Headnote
A) Income Tax - Reassessment Notice - Section 148 of Income Tax Act, 1961 - Validity of Notice Under TOLA - The court examined whether a notice issued under section 148 of the Act during the extended period under TOLA was valid considering the 'surviving time' between the date of issuance and 30.06.2021. Following the principle in Union of India v. Rajeev Bansal, the court held that the notice dated 12.07.2022 was invalid as it was issued beyond the permissible time. (Paras 2-7) B) Income Tax - Reassessment - Section 148A(b) of Income Tax Act, 1961 - Deemed Notice - The court noted that the original notice dated 11.06.2021 under section 148 was to be treated as a notice under section 148A(b) as per Union of India v. Ashish Agarwal. However, the subsequent notice dated 12.07.2022 was time-barred. (Paras 4-5) C) Income Tax - Reassessment - Surviving Time - Section 3(1) of TOLA - The court applied the 'surviving time' test from Dhanraj Govindram Kella v. Income Tax Officer, holding that each case must be examined on its facts. Since the notice under TOLA was issued on 11.06.2021 and the final notice on 12.07.2022, the surviving time was insufficient, rendering the notice invalid. (Paras 6-7)
Issue of Consideration
Whether the notice under section 148 of the Income Tax Act, 1961 dated 12.07.2022 is invalid and time-barred in light of the 'surviving time' principle laid down in Union of India v. Rajeev Bansal.
Final Decision
The petition is allowed. The notice under section 148 of the Income Tax Act, 1961 dated 12.07.2022 is quashed and set aside as invalid and time-barred.
Law Points
- Reassessment notice under section 148 of Income Tax Act
- 1961
- validity of notice under TOLA
- surviving time principle
- notice under section 148A(b)
- time bar for reassessment
