Case Note & Summary
The petitioner, Sampatraj Lalchand Chowdhry, filed a Special Civil Application under Article 226 of the Constitution of India before the Gujarat High Court challenging a notice dated 28.08.2022 issued under section 148 of the Income Tax Act, 1961 for Assessment Year 2016-2017. The respondent was the Deputy Commissioner of Income Tax, Circle 3(1)(1), Ahmedabad. The petitioner contended that the notice was invalid and time barred. The brief facts are that the Assessing Officer had initially issued a notice under section 148 of the Act on 30.06.2021 during the extended time period as per the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (TOLA). However, following the Supreme Court's decision in Union of India v. Ashish Agarwal (2022) 444 ITR 1 (SC), that 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 (2024) 469 ITR 46 (SC) laid down the law that the validity of such notices depends on the 'surviving time' left between the date of issuance of the notice under section 148 read with section 3(1) of TOLA and 30.06.2021. The Gujarat High Court, in its earlier decision in Dhanraj Govindram Kella v. Income Tax Officer (2025), had considered this issue in detail and held that each case must be examined separately based on the facts, including the date of issuance of the notice under TOLA, the date of supplying information to the assessee, and the date of passing the order under section 148A(d). In the present case, the court found that the notice under section 148 was issued on 28.08.2022, and applying the surviving time principle, no time remained between the original notice under TOLA and 30.06.2021, rendering the notice invalid. The court allowed the petition and quashed the notice.
Headnote
A) Income Tax - Reassessment Notice - Section 148 of Income Tax Act, 1961 - Time Bar - The notice under section 148 of the Act dated 28.08.2022 for AY 2016-2017 was challenged as invalid and time barred. The court applied the 'surviving time' principle from Union of India v. Rajeev Bansal (2024) 469 ITR 46 (SC) and held that since no time survived between the issuance of the original notice under TOLA and 30.06.2021, the subsequent notice was invalid. (Paras 2-6) B) Income Tax - TOLA - Section 3(1) of Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 - Validity of Notice - The court followed its earlier decision in Dhanraj Govindram Kella v. Income Tax Officer (2025) which held that each case must be examined based on the date of issuance of notice under TOLA and the date of supplying information to the assessee. (Paras 6-7)
Issue of Consideration
Whether the notice under section 148 of the Income Tax Act, 1961 dated 28.08.2022 for Assessment Year 2016-2017 is invalid and time barred.
Final Decision
The petition is allowed. The notice under section 148 of the Income Tax Act, 1961 dated 28.08.2022 for Assessment Year 2016-2017 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) of Income Tax Act
