Case Note & Summary
The petitioner filed a writ petition under Article 226 of the Constitution of India challenging the order under section 148A(d) of the Income Tax Act, 1961 dated 28.07.2022, the notice under section 148 of the Act dated 28.07.2022, and the consequential reassessment proceedings for the assessment year 2013-2014. The respondent Assessing Officer had originally issued a notice under section 148 on 24.06.2021 during the extended time period provided by 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 show-cause notice under section 148A(b). Subsequently, the Supreme Court in Union of India v. Rajeev Bansal laid down the law regarding the validity of such notices based on the 'surviving time' between the date of issuance of the original notice under section 148 read with TOLA and 30.06.2021, and the issuance of the fresh notice under section 148. A Division Bench of this Court in Dhanraj Govindram Kella v. Income Tax Officer had earlier considered the issue and held that for assessment years like 2013-2014, if the notice under the new regime is issued beyond the surviving time, it is invalid. In the present case, the original notice was dated 24.06.2021, and the surviving time up to 30.06.2021 was computed, giving a last date for issuance of notice under section 148 as 21.06.2022. However, the impugned order under section 148A(d) and notice were issued on 28.07.2022, beyond that date. The learned Senior Standing Counsel for the respondent verified the dates and could not controvert them. The Court therefore held that the notice was issued beyond the surviving time and was invalid, quashing the order under section 148A(d) and all consequential proceedings.
Headnote
A) Income Tax - Reassessment - Notice beyond surviving time invalid - Income Tax Act, 1961, Sections 147, 148, 148A(d); Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020, Section 3(1) - The original notice under section 148 dated 24.06.2021 was treated as show-cause under section 148A(b) per Ashish Agarwal; the surviving time from that date to 30.06.2021 was computed, and the reassessment notice under section 148 was issued on 28.07.2022, beyond the surviving time limit of 21.06.2022. Held that such notice is time-barred and invalid, following Rajeev Bansal, and the order under section 148A(d) and all consequential proceedings are quashed and set aside (Paras 7-10).
Issue of Consideration
Whether the reassessment notice under section 148 of the Income Tax Act, 1961, issued pursuant to the directions in Ashish Agarwal, is invalid due to being issued beyond the 'surviving time' as per the Supreme Court's decision in Rajeev Bansal
Final Decision
The writ petition was allowed. The order under section 148A(d) dated 28.07.2022, the notice under section 148 dated 28.07.2022, and all consequential reassessment proceedings were quashed and set aside as being invalid and beyond the surviving time.
Law Points
- Reassessment notice under section 148 must be issued within the surviving time limit computed from original notice under TOLA till 30.06.2021
- notice issued beyond surviving time is time-barred and invalid
- the directions in Ashish Agarwal and Rajeev Bansal govern the validity of such notices
- the time during which show-cause notices deemed stayed is excluded from limitation but notice must be issued within remaining surviving time
Case Details
2026 LawText (GUJ) (03) 527
R/SPECIAL CIVIL APPLICATION NO. 9028 of 2023
A.S. Supehia, Pranav Trivedi
Jaimin A Gandhi, Viresh I Rudalal, Karan G Sanghani
SANTOSH SINGH HUKAM SINGH KARNAWAT
THE INCOME TAX OFFICER, CIRCLE 2(3)(6), SURAT
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Nature of Litigation
Writ petition under Article 226 of the Constitution of India challenging reassessment proceedings under the Income Tax Act, 1961.
Remedy Sought
The petitioner sought quashing of the order under section 148A(d) dated 28.07.2022, the notice under section 148 dated 28.07.2022, and all consequential reassessment proceedings on the ground that the notice was invalid and time-barred.
Filing Reason
The reassessment notice was issued beyond the surviving time limit as determined by the Supreme Court in Union of India v. Rajeev Bansal.
Previous Decisions
The Supreme Court in Union of India v. Ashish Agarwal directed that old notices be treated as show-cause notices under section 148A(b). Subsequently, in Union of India v. Rajeev Bansal, the Court held that reassessment notices must be issued within the surviving time period computed from the original notice under TOLA to 30.06.2021. The Gujarat High Court in Dhanraj Govindram Kella applied this principle and quashed similar notices.
Issues
Whether the reassessment notice under section 148 of the Income Tax Act, 1961, issued after the surviving time period as per Rajeev Bansal, is invalid and liable to be quashed.
Submissions/Arguments
Petitioner contended that the notice under section 148 was issued beyond the surviving time limit as per the Supreme Court's decision in Rajeev Bansal, and was therefore invalid and time-barred.
Respondent verified the dates and could not controvert that the notice was issued after the surviving time limit.
Ratio Decidendi
A reassessment notice under section 148 of the Income Tax Act, 1961, issued pursuant to the directions in Ashish Agarwal, must be issued within the 'surviving time' period determined from the date of the original notice under TOLA to 30.06.2021; if issued beyond that period, it is time-barred and invalid, as held by the Supreme Court in Rajeev Bansal.
Judgment Excerpts
Therefore, the impugned notice having been issued beyond the ‘surviving time’ would be invalid notice as held by the Hon’ble Apex Court in case of Rajeev Bansal (supra)
impugned order under Section 148A(d) of the Act dated 28.07.2022 is hereby quashed and set aside and all consequential proceedings are also quashed and set aside.
Procedural History
The respondent Assessing Officer issued a notice under section 148 of the Income Tax Act, 1961 on 24.06.2021 for assessment year 2013-2014 under TOLA. In light of the Supreme Court's decision in Ashish Agarwal, this notice was treated as a show-cause notice under section 148A(b). The Assessing Officer supplied information to the petitioner on 27.05.2022. The petitioner filed a reply on 11.06.2022. The Assessing Officer passed an order under section 148A(d) and issued a notice under section 148 on 28.07.2022. The petitioner filed the present writ petition challenging these on the ground that the notice was issued beyond the surviving time. The High Court, following its earlier decision in Dhanraj Govindram Kella and the Supreme Court's decisions in Ashish Agarwal and Rajeev Bansal, quashed the impugned order and notice on 23.03.2026.
Acts & Sections
- Income Tax Act, 1961: 147, 148, 148A(b), 148A(d)
- Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020: Section 3(1)
- Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020: Section 3(1)
