Reassessment notice issued after the extended deadline is invalid.
Issue
Whether a reassessment notice issued under the amended Section 148 is valid if it is served on the assessee after the specific deadline set by the Supreme Court’s order in light of the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance (TOLA), 2020.
Brief Facts
For the Assessment Year 2013-14, the Assessing Officer (AO) first issued a notice under the old Section 148 on June 28, 2021, which was within the extended time limit granted by the TOLA. The Supreme Court later clarified the procedure for these notices. Following the Supreme Court’s directions, the AO provided information to the assessee on May 28, 2022, and the assessee submitted a reply on June 11, 2022. Subsequently, the AO issued an order under the new Section 148A(d) and a fresh notice under the amended Section 148 on July 27, 2022. The assessee challenged this notice, arguing it was issued after the time limit had expired.
Decision
The court ruled in favor of the assessee. It was held that, considering the date of the original notice (June 28, 2021) and the extended time period under the TOLA, the last permissible date for issuing a reassessment notice under the amended Section 148 was June 18, 2022. The notice issued by the AO on July 27, 2022, was therefore beyond the surviving time limit and was deemed invalid. The court emphasized that the AO must adhere strictly to the timelines prescribed by law and clarified by the Supreme Court’s directives.
Key Takeaways
- Strict Adherence to Timelines: This case underscores the crucial importance of adhering to statutory time limits. Any notice issued even a day after the prescribed deadline is considered invalid.
- Supreme Court’s Directives: The ruling highlights the binding nature of the Supreme Court’s decisions regarding the validity of notices issued under the old and new reassessment regimes.
- Invalidity of Notice: A reassessment notice issued beyond the permissible time limit is a jurisdictional defect. Such a defect cannot be cured, and any proceedings initiated on the basis of an invalid notice are void ab initio (from the beginning).
- Benefit of Law: The assessee is entitled to the benefit of the law, including the time limits for issuing notices, and the tax authorities cannot arbitrarily extend these deadlines.
HIGH COURT OF GUJARAT
Opera Exports (P.) Ltd.
v.
Assistant Commissioner of Income-tax
BHARGAV D. KARIA and Pranav Trivedi, JJ.
R/SPECIAL CIVIL APPLICATION NO. 8589 of 2023
SEPTEMBER 2, 2025
Jaimin A. Gandhi and Viresh I. Rudalal for the Petitioner. Karan G Sanghani for the Respondent.
ORDER
Bhargav D. Karia, J.- Heard learned advocate Mr. Jaimin A. Gandhi for the petitioner and learned Senior Standing Counsel Mr. Karan Sanghani for the respondent.
2. This petition is filed under Article 226 of the Constitution of India challenging the notice under section 148 of the Income Tax Act, 1961 (For short “the Act”) dated 27.07.2022 on the ground that the notice would be invalid and time barred.
3. Brief facts of the case are that the respondent Assessing Officer issued notice dated 28.06.2021 under section 148 of the Act for the Assessment Year 2013-2014 during the extended time period as per Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 [(2020) 422 ITR (St.) 116] (For short “TOLA”).
4. In view of the decision of Hon’ble Apex Court in case of Union of India and others v. Ashish Agarwal 444 ITR 1 (SC), the aforesaid notice was to be treated as notice under section 148A(b) of the Act which has come into statute with effect from 01.04.2021.
5. The Hon’ble Apex Court in case of Union of India v. Rajeev Bansal 469 ITR 46 (SC) has laid down the law to consider such notice as valid notice or invalid notice depending upon the surviving time left between the date of issuance of notice under section 148 of the Act read with section 3(1) of TOLA upto 30.06.2021 and the issuance of notice under section 148 pursuant to the directions issued by the Hon’ble Apex Court in case of Ashish Agarwal (supra).
6. This Court in case of (Judgment dated 08.07.2025 rendered in Dhanraj Govindram Kella v. Income-tax Officer 194 (Gujarat)/Special Civil Application No.6387 of 2023 and allied matters) has considered in detail the submissions made by both the sides and has held as under:
“65. The alternative contention of the petitioner as to whether notices would be valid notice or invalid notice considering ‘surviving time’ between the date of the issuance of notices under TOLA and 30th June, 2021 or not is required to be considered and for that each matter has to be considered separately on the basis of the facts of case considering the date of issuance of notices under section 148 under TOLA by the Revenue and thereafter date of supplying information to the assessee and date of passing of order under section 148A(d) and date of issuance of notice under section 148 of the Act so as to consider whether issuance of notice under section 148 of the Act is within ‘surviving time’ as per the direction of Hon’ble Apex Court in case of Rajeev Bansal (supra) or not.
66. So far as Assessment Years 2013-2014 and 2014-2015 are concerned, the period of three years from the end of the assessment year would be over prior to 20.03.2020 and the period of six years would be over between 20.03.2020 and 30.06.2021. Therefore, the notices issued under section 148 of the Act under old regime between 01.04.2021 and 30.06.2021 as per TOLA, will be a valid notice if the notice under section 148 of the Act under new regime is issued within the period of ‘surviving time’ as per the directions issued by Hon’ble Apex Court in case of Rajeev Bansal (supra). For the Assessment Years 2016-2017 and 2017-2018 are concerned, the notice issued under section 148 of the Act under old regime between 01.04.2021 and 30.06.2021 under TOLA would be considered to be issued within three years from the end of the relevant assessment year as three years would complete within the period of 20.03.2020 and 30.06.2021.
67. Therefore, in facts of these petitions, following data is required to be considered to find out ‘surviving time’ to decide as to whether the impugned notices under section 148 of the Act issued under the new regime as per the decision of Hon’ble Apex Court in case of Ashish Agarwal (supra) would be valid notice or not in view of the decision of the Hon’ble Apex Court in case of Rajeev Bansal (supra):
| SCA NO | AY | Date of notice under section 148 under TOLA | No of days of surviving time available till 30.06.2021 | Date of providing information under section 148A(b) | ||||
| 6387/2023 | 2013-2014 | 17.06.2021 | 13 | 26.05.2022 | ||||
| 5688/2023 | 2014-2015 | 09.06.2021 | 21 | 23.05.2022 | ||||
| 22260/2022 | 2016-2017 | 30.06.2021 | 1 | 23.05.2022 | ||||
| 996/2023 | 2017-2018 | 30.06.2021 | 1 | 24.05.2022 | ||||
| SCA NO | Due date of filing reply | Date of reply:- | Date of order under section 148A(d) and notice under section 148:- | Last date for issuance of notice under section 148 as per surviving time:- | ||||
| 6387/2023 | 09.06.2022 | 04.06.2022 | 29.07.2022 | 22.06.2022 | ||||
| 5688/2023 | 06.06.2022 | 27.07.2022 | 27.06.2022 | |||||
| 22260/2022 | 07.06.2022 | 06.07.2022 | 30.07.2022 | 14.06.2022 | ||||
| 996/2023 | 11.06.2022 | 10.06.2022 | 19.07.2022 | 18.06.2022 | ||||
68. It is apparent from the above details that impugned notice under section 148 of the Act is issued beyond the period of ‘surviving time’ as per the direction of Hon’ble Apex Court in case of Rajeev Bansal (supra)and therefore, such notices would be invalid notices.
69. The impugned notices issued under section 148 of the Act are accordingly quashed and set aside being invalid having been issued beyond the ‘surviving time’. Accordingly, impugned orders passed under section 148A(d) of the Act would also not survive and are accordingly, quashed and set aside. Subsequent proceedings, if any, undertaken by the respondent would not survive and are also quashed and set aside.
70. Rule is made absolute to the aforesaid extent. No order as to costs.”
7. In the facts of the case, the respondent Assessing Officer has provided information pursuant to the directions issued by the Hon’ble Apex Court in case of Ashish Agarwal (supra) on 28.05.2022 and therefore, considering 15 days’ time to file reply by the assessee, the due date would be 11.06.2022. The petitioner filed reply on 11.06.2022. The order under section 148A(d) of the Act as well as notice under section 148 of the Act was issued on 27.07.2022. However, considering the period of limitation from the date of issuance of notice under section 148 read with TOLA upto 30.06.2021, the limitation for issuance of notice under section 148 of the Act applying the decision of Hon’ble Apex Court in case of Ashish Agarwal (supra) as well as Rajeev Bansal (supra), would be 18.06.2022.
8. Learned Senior Standing Counsel Mr. Karan Sanghani has verified the above dates and could not controvert the same.
9. In view of above, the impugned notice dated 27.07.2022 issued under section 148 of the Act would be invalid notice as the said notice is issued after 18.06.2022 as per the decision of Hon’ble Apex Court in case of Ashish Agarwal (supra). 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) in the following paragraph no. 114 (g) and (h) of the judgment:
“114. In view of the above discussion, we conclude that:
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(g) The time during which the show-cause notices were deemed to be stayed is from the date of issuance of the deemed notice between April 1, 2021 and June 30, 2021 till the supply of relevant information and material by the Assessing Officers to the assessees in terms of the directions issued by this court in Union of India v. Ashish Agarwal 444 ITR 1 (SC); (2023) 1 SCC 617.], and the period of two weeks allowed to the assessees to respond to the show-cause notices; and
(h) The Assessing Officers were required to issue the reassessment notice under section 148 of the new regime within the time limit surviving under the Income-tax Act read with the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. All notices issued beyond the surviving period are time barred and liable to be set aside.”
10. In view of foregoing reasons, impugned notice dated 27.07.2022 is hereby quashed and set aside and all consequential proceedings are also quashed and set aside.