Case Note & Summary
The petitioner, an assessee, filed a writ petition under Article 226 of the Constitution before the High Court of Gujarat challenging a reassessment notice dated 28.08.2022 issued under section 148 of the Income Tax Act, 1961 for Assessment Year 2016-17. The background involved Supreme Court directions in Union of India v. Ashish Agarwal and Union of India v. Rajeev Bansal, which laid down the law for treatment of old regime reassessment notices and the requirement of issuing new regime notices within surviving time limits. Factually, the Assessing Officer had originally issued a notice under section 148 on 30.06.2021, during the extended period under the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020. Following Ashish Agarwal, that notice was to be treated as a show-cause notice under section 148A(b). The officer supplied information to the assessee on 24.05.2022. The assessee filed a reply on 13.06.2022. The order under section 148A(d) and the impugned notice under section 148 (new regime) were issued on 28.08.2022. The core legal issue was whether this notice was time-barred because it exceeded the surviving time limit computed from the original notice date. The petitioner argued that the notice was invalid and time-barred, while the respondent effectively did not controvert the computation of dates. The court analysed the law by referring to its earlier decision in Dhanraj Govindram Kella, which had applied the Rajeev Bansal formula to similar facts. According to that formula, for Assessment Year 2016-17, the surviving time from the original notice (30.06.2021) to 30.06.2021 was 1 day. The Supreme Court had directed that the time taken for compliance with section 148A procedure (information, reply, order) must be excluded, and the reassessment notice must be issued within the surviving time. Here, the latest date by which the notice could have been issued was computed as 14.06.2022. Since the impugned notice was dated 28.08.2022, it was clearly beyond the deadline. The court held that the notice was time-barred and invalid, quashing it along with all consequential proceedings. The judgment expressly relied on Rajeev Bansal’s direction that all notices issued beyond the surviving period are liable to be set aside. The petition was allowed, rule made absolute, with no order as to costs.
Headnote
A) Taxation Law - Reassessment Notice - Validity of Notice Under Section 148 - Income Tax Act, 1961, Sections 148, 148A, TOLA - The Assessing Officer issued a reassessment notice dated 30.06.2021 under old section 148 for AY 2016-17, which as per Ashish Agarwal is deemed a show-cause notice under section 148A(b). The Supreme Court in Rajeev Bansal held that a notice under new section 148 must be issued within the surviving period from the original notice to 30.06.2021. Applying that rule, the surviving time here expired on 14.06.2022, but the impugned notice was issued on 28.08.2022. Held: The notice is time-barred and invalid, and all consequential proceedings are quashed (Paras 5-10).
Issue of Consideration
Whether the impugned notice under section 148 of the Income Tax Act, 1961 dated 28.08.2022 for Assessment Year 2016-17 is invalid and time-barred as it was issued beyond the ‘surviving time’ as laid down by the Supreme Court in Union of India v. Rajeev Bansal and Union of India v. Ashish Agarwal.
Final Decision
Impugned notice dated 28.08.2022 under section 148 of the Income Tax Act, 1961 quashed and set aside as time-barred, being issued beyond surviving time. All consequential proceedings also quashed. Rule made absolute, no costs.
Law Points
- Reassessment notice under section 148 must be issued within surviving time limit
- validity determined by surviving time between original TOLA notice and June 30
- 2021
- notice beyond surviving period invalid
- time-barred reassessment
