Case Note & Summary
The petitioner, Shell Global Solutions International BV, filed a writ petition under Article 226 of the Constitution of India challenging a notice dated 01.08.2022 issued under section 148 of the Income Tax Act, 1961 for Assessment Year 2017-18. The notice was originally issued on 16.06.2021 during the extended 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, the notice was to be treated as a notice under section 148A(b) of the Act. The Supreme Court in Union of India v. Rajeev Bansal laid down the 'surviving time' principle to determine the validity of such notices, i.e., whether there was any time left between the date of issuance of the notice under TOLA and 30.06.2021. The Gujarat High Court, relying on its earlier decision in Dhanraj Govindram Kella v. Income Tax Officer, held that each case must be examined individually. In the present case, the original notice under TOLA was issued on 16.06.2021, and the fresh notice under section 148 was issued on 01.08.2022. Since no time survived between the issuance and 30.06.2021, the notice was invalid and time-barred. The court quashed the notice and allowed the petition.
Headnote
A) Income Tax - Reassessment Notice - Section 148 of Income Tax Act, 1961 read with Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (TOLA) - Validity of Notice - The petitioner challenged a notice under section 148 dated 01.08.2022 for AY 2017-18 as time-barred. The court applied the 'surviving time' principle from Union of India v. Rajeev Bansal, holding that since the original notice under TOLA was issued on 16.06.2021 and the fresh notice under section 148 was issued on 01.08.2022, there was no surviving time left between the date of issuance and 30.06.2021, rendering the notice invalid. Held that the notice is invalid and time-barred. (Paras 2-7)
B) Income Tax - Reassessment Notice - Section 148 of Income Tax Act, 1961 - Time Bar - The court relied on its earlier decision in Dhanraj Govindram Kella v. Income Tax Officer, which held that each case must be examined individually based on the date of issuance of notice under TOLA and the date of supplying information to the assessee. In the present case, the notice under section 148 was issued on 01.08.2022, after the extended period, and no surviving time remained, making the notice invalid. (Paras 6-7)
Issue of Consideration
Whether the notice under section 148 of the Income Tax Act, 1961 dated 01.08.2022 for Assessment Year 2017-18, issued during the extended period under TOLA, 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 01.08.2022 for Assessment Year 2017-18 is quashed and set aside as invalid and time-barred.
Law Points
- Reassessment notice under section 148 of Income Tax Act
- 1961 issued during extended period under TOLA must be tested on 'surviving time' principle as per Union of India v. Rajeev Bansal
- Notice under section 148 issued after 30.06.2021 without any surviving time is invalid
- Each case to be examined individually based on dates of notice and compliance with Ashish Agarwal directions
Case Details
2026 LawText (GUJ) (03) 510
R/Special Civil Application No. 7407 of 2024
Honourable Mr. Justice A.S. Supehia, Honourable Mr. Justice Pranav Trivedi
Mr B S Soparkar for the Petitioner, Mr Varun K Patel for the Respondent
Shell Global Solutions International BV
Assistant Commissioner of Income Tax, International Taxation 1, Ahmedabad
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Nature of Litigation
Writ petition under Article 226 of the Constitution of India challenging a reassessment notice under section 148 of the Income Tax Act, 1961.
Remedy Sought
Quashing of notice dated 01.08.2022 under section 148 of the Income Tax Act, 1961 for Assessment Year 2017-18 as invalid and time-barred.
Filing Reason
The notice was issued beyond the permissible time limit under the Act and the extended period under TOLA, and no surviving time remained as per the principle laid down in Union of India v. Rajeev Bansal.
Previous Decisions
The Assessing Officer issued notice under section 148 on 16.06.2021 during the extended period under TOLA. Following the Supreme Court's decision in Ashish Agarwal, the notice was treated as a notice under section 148A(b). Subsequently, a fresh notice under section 148 was issued on 01.08.2022.
Issues
Whether the notice under section 148 of the Income Tax Act, 1961 dated 01.08.2022 for Assessment Year 2017-18 is invalid and time-barred.
Whether the 'surviving time' principle as laid down in Union of India v. Rajeev Bansal applies to render the notice invalid.
Submissions/Arguments
Petitioner argued that the notice is invalid and time-barred as there was no surviving time between the date of issuance of the original notice under TOLA (16.06.2021) and 30.06.2021.
Respondent argued in support of the notice, but the court found no surviving time.
Ratio Decidendi
A reassessment notice under section 148 of the Income Tax Act, 1961 issued during the extended period under TOLA must be tested on the 'surviving time' principle. If no time survives between the date of issuance of the notice under TOLA and 30.06.2021, the subsequent notice under section 148 issued after the directions in Ashish Agarwal is invalid and time-barred.
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 dated 01.08.2022 on the ground that the notice 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 a notice under section 148 of the Income Tax Act, 1961 on 16.06.2021 for AY 2017-18 during the extended period under TOLA. Following the Supreme Court's decision in Ashish Agarwal, the notice was treated as a notice under section 148A(b). Thereafter, a fresh notice under section 148 was issued on 01.08.2022. The petitioner filed the present writ petition challenging the notice as invalid and time-barred. The High Court allowed the petition on 03.03.2026.
Acts & Sections
- Income Tax Act, 1961: 148, 148A(b)
- Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020: 3(1)
- Constitution of India: 226
