Case Note & Summary
The petitioner, an individual assessee, filed a writ petition under Article 226 of the Constitution of India challenging an order passed under Section 148A(d) of the Income Tax Act, 1961 dated 17.08.2022 for Assessment Year 2016-2017. The challenge was based on the ground that the reassessment notice was invalid and time-barred. The respondent Assessing Officer originally issued a notice under Section 148 on 30.06.2021, during the extended time period provided by the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (TOLA). Following the Supreme Court's judgment in Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC)], such notices were to be treated as show-cause notices under Section 148A(b). Pursuant thereto, the revenue supplied relevant information to the petitioner on 23.05.2022. The petitioner filed a reply on 13.06.2022. The Assessing Officer passed the order under Section 148A(d) and issued notice under Section 148 on 17.08.2022. The core legal issue was whether this notice was issued within the permissible time, i.e., the 'surviving time' as per the Supreme Court's decision in Union of India v. Rajeev Bansal [(2024) 469 ITR 46 (SC)]. The petitioner contended that the notice was beyond the surviving time limit and therefore invalid. The respondent's counsel, upon verification of dates, did not controvert the calculation. The High Court relied on its earlier judgment in Dhanraj Govindram Kella v. Income Tax Officer, which had elaborately considered the concept of 'surviving time'. The court noted that for Assessment Year 2016-2017, the original notice under Section 148 was issued on 30.06.2021, leaving only 1 day of surviving time. From the date of supplying information on 23.05.2022, the petitioner was given 15 days to reply, so the due date for reply was 13.06.2022. After factoring in the deemed stay period, the limitation for passing the order and issuing notice expired on 20.06.2022. The order under Section 148A(d) was, however, passed on 17.08.2022, well beyond that date. Quoting paragraphs 114(g) and (h) of Rajeev Bansal, the court held that all notices issued beyond the surviving period are time-barred and liable to be set aside. Consequently, the impugned order dated 17.08.2022 and all consequential proceedings were quashed and set aside.
Headnote
A) Taxation - Income Tax - Reassessment - Sections 148, 148A, Income Tax Act, 1961 - Validity of reassessment notices under new regime post-Ashish Agarwal - Notices issued under old regime during extended period under TOLA are to be treated as show-cause notices, and the subsequent notice under Section 148 must be issued within the 'surviving time' between the original notice date and 30.06.2021, excluding the period of deemed stay. Held, any notice beyond that period is invalid. (Paras 5-6, 9) B) Taxation - Income Tax - Reassessment - Limitation - Computation of surviving time - In applying Rajeev Bansal, for Assessment Year 2016-2017, the original notice was issued on 30.06.2021, leaving 1 day surviving time. After providing information and allowing 15 days for reply, the last date for order and notice under Section 148 was 20.06.2022. The notice issued on 17.08.2022 was beyond this period and hence invalid. Held, the Assessing Officer must adhere to the compounded limitation, and the notice issued beyond is time-barred. (Paras 7-9)
Issue of Consideration
Whether the order under Section 148A(d) and the consequent notice under Section 148 of the Income Tax Act, 1961, issued on 17.08.2022 for Assessment Year 2016-2017, is invalid having been issued beyond the 'surviving time' as per the law laid down by the Supreme Court in Union of India v. Ashish Agarwal and Union of India v. Rajeev Bansal.
Final Decision
The impugned order dated 17.08.2022 passed under Section 148A(d) and all consequential proceedings are quashed and set aside.
Law Points
- Reassessment notice must be issued within surviving time limit
- Notices beyond surviving period are time-barred
- Time during which show-cause notices deemed stayed is excluded
- Directions in Rajeev Bansal must be followed
- Section 148A(d) order invalid if notice not in time
