Case Note & Summary
The petitioner, Kavita Murarilal Kedia, filed a Special Civil Application under Article 226 of the Constitution of India challenging a notice dated 30.07.2022 issued under section 148 of the Income Tax Act, 1961 for the Assessment Year 2016-2017. The notice was originally issued on 30.06.2021 during the extended period under the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (TOLA). In view of 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. The Supreme Court in Union of India v. Rajeev Bansal laid down that the validity of such notices depends on the 'surviving time' between the date of issuance under TOLA and 30.06.2021. The Gujarat High Court, following its earlier decision in Dhanraj Govindram Kella v. Income Tax Officer, held that since the notice was issued on 30.06.2021, the last day of the extended period, there was no surviving time left to complete the procedure under section 148A. Consequently, the notice was invalid and time-barred. The court allowed the petition and quashed the notice.
Headnote
A) Income Tax - Reassessment - Section 148 of Income Tax Act, 1961 - Validity of Notice - Notice issued under section 148 on 30.06.2021 during extended period under TOLA was treated as notice under section 148A(b) as per Ashish Agarwal - Following Rajeev Bansal, the notice is invalid if there is no surviving time between the date of issuance and 30.06.2021 - Since the notice was issued on the last day of the extended period, there was no time left to comply with the procedure under section 148A - Held that the notice is invalid and time-barred (Paras 2-7).
Issue of Consideration
Whether the notice under section 148 of the Income Tax Act, 1961 dated 30.06.2021 issued during the extended period under TOLA is valid or invalid in light of the decisions in Ashish Agarwal and Rajeev Bansal, considering the concept of 'surviving time'.
Final Decision
The petition is allowed. The notice under section 148 of the Income Tax Act, 1961 dated 30.07.2022 is quashed and set aside.
Law Points
- Reassessment notice under section 148 of Income Tax Act
- 1961
- issued during extended period under TOLA must be treated as notice under section 148A(b) after Ashish Agarwal decision
- validity depends on surviving time between notice date and 30.06.2021
- notice issued on 30.06.2021 has no surviving time and is invalid.
Case Details
2026 LawText (GUJ) (03) 512
R/Special Civil Application No. 9108 of 2023
A.S. Supehia, Pranav Trivedi
Jaimin A Gandhi, Viresh I Rudalal, Karan G Sanghani
The Assistant Commissioner of Income Tax, Circle 2(1)(1), Surat
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Nature of Litigation
Challenge to reassessment notice under section 148 of Income Tax Act, 1961.
Remedy Sought
Quashing of notice dated 30.07.2022 under section 148 of the Act.
Filing Reason
Notice was invalid and time-barred as it was issued on 30.06.2021 without surviving time.
Previous Decisions
Notice originally issued on 30.06.2021 under TOLA; treated as notice under section 148A(b) per Ashish Agarwal; validity depends on surviving time per Rajeev Bansal.
Issues
Whether the notice under section 148 dated 30.06.2021 is valid considering the concept of 'surviving time'.
Whether the notice is time-barred.
Submissions/Arguments
Petitioner argued that the notice is invalid and time-barred.
Respondent argued in support of the notice.
Ratio Decidendi
A notice under section 148 of the Income Tax Act, 1961 issued during the extended period under TOLA must be treated as a notice under section 148A(b) after the Ashish Agarwal decision. Its validity depends on the surviving time between the date of issuance and 30.06.2021. If the notice is issued on the last day (30.06.2021), there is no surviving time, rendering the notice 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 30.07.2022 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 notice under section 148 on 30.06.2021 for AY 2016-2017 during extended period under TOLA. Subsequently, a notice dated 30.07.2022 was issued. The petitioner filed Special Civil Application No. 9108 of 2023 challenging the notice. The High Court heard the matter and delivered judgment 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
