Case Note & Summary
The petitioner, Ashokbhai Nanubhai Patel, 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 Assessment Year 2014-2015. The notice was originally issued on 24.06.2021 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, which came into effect from 01.04.2021. The Supreme Court in Union of India v. Rajeev Bansal laid down the 'surviving time' principle to determine the validity of such notices based on the time left between the original TOLA notice 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 this case, the court found that the notice dated 30.07.2022 was issued beyond the surviving time and was therefore 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 - Validity of Notice under TOLA - The court considered whether a notice under section 148 issued during the extended period under TOLA could be treated as valid after the decision in Ashish Agarwal. The court applied the 'surviving time' principle from Rajeev Bansal to determine that the notice dated 30.07.2022 was invalid as the time between the original TOLA notice and 30.06.2021 was insufficient. Held that the notice is time-barred and quashed. (Paras 1-6) B) Income Tax - Surviving Time - Section 3(1) of Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 - The court examined the concept of 'surviving time' between the date of issuance of notice under section 148 read with TOLA and 30.06.2021. Following Rajeev Bansal, the court held that if the surviving time is less than the period required for compliance, the subsequent notice under section 148 is invalid. Held that the notice in this case was issued beyond the permissible time. (Paras 5-6)
Issue of Consideration
Whether the notice under section 148 of the Income Tax Act, 1961 dated 30.07.2022 for Assessment Year 2014-2015 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 30.07.2022 is quashed and set aside.
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
