Reassessment Notices Issued Beyond the ‘Surviving Time’ Calculated Under TOLA and Section 149 Are Barred by Limitation

By | February 25, 2026
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Reassessment Notices Issued Beyond the ‘Surviving Time’ Calculated Under TOLA and Section 149 Are Barred by Limitation

Issue

Whether a reassessment notice under Section 148 for Assessment Year 2017-18 is legally valid if it was issued after the expiry of the “surviving limitation period” as calculated by reading the Income-tax Act, 1961, in conjunction with the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA).

Facts

  • Assessment Year: 2017-18.

  • Initial Action: The Revenue originally issued a notice under the old Section 148 during the extended period provided by TOLA.

  • Supreme Court Intervention: Following the landmark judgment in UOI v. Ashish Agarwal, that notice was deemed to be a show-cause notice under the new Section 148A(b).

  • The Process: The Assessing Officer (AO) followed the new procedure: provided information to the assessee, considered the reply, passed an order under Section 148A(d), and then issued a fresh notice under Section 148.

  • The Dispute: The assessee filed a writ petition claiming that by the time the final Section 148 notice was issued, the total limitation period (including TOLA extensions) had already expired.

  • Legal Context: The case relied on the combined interpretation of Ashish Agarwal and the more recent UOI v. Rajeev Bansal (2024), which provided the specific formula for calculating “surviving time.”

Decision

  • The “Surviving Time” Rule: The Court held that TOLA does not indefinitely extend limitation. One must calculate the “surviving time” available to the Revenue from the date the original notice was stayed/transformed by the Supreme Court’s ruling.

  • Application to AY 2017-18: Upon calculation, it was found that the impugned notice under Section 148 was issued beyond the surviving period allowed under the Act read with TOLA.

  • Jurisdictional Error: Since the notice was issued after the limitation period had lapsed, the AO lacked the jurisdiction to reopen the assessment.

  • Conclusion: The notice was held to be invalid and was quashed. The ruling was delivered in favor of the assessee.

Key Takeaways

  • The Rajeev Bansal Formula: The Supreme Court in Rajeev Bansal clarified that while TOLA extends the deadline, the Revenue must still act within the specific “balance days” remaining in the limitation period once the 148A process is triggered.

  • Finality of Limitation: Even in cases covered by the Ashish Agarwal “remedial” framework, the Revenue cannot bypass the ultimate time barriers set by Section 149.

  • Check the Dates: For AY 2017-18, the limitation period is particularly sensitive; taxpayers should meticulously calculate whether the AO utilized more than the “surviving” days available after the deeming fiction of the SCN was applied.

HIGH COURT OF GUJARAT
Vinodkumar Rughnathbhai Koringa
v.
Income-tax Officer*
A.S. Supehia and Pranav Trivedi, JJ.
R/SPECIAL CIVIL APPLICATION NO. 89 of 2023
DECEMBER  23, 2025
Darshan R Patel for the Petitioner. Maunil G Yajnik, Adv. for the Respondent.
ORDER
A.S. Supehia, J. – Registry shall accept the appearance note of learned Senior Standing Counsel Mr. Maunil Yajnik for the respondent.
1.1. Heard learned advocate Mr. Darshan Patel for the petitioner and learned Senior Standing Counsel Mr. Maunil Yajnik 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 31.07.2022 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 11.06.2021 under section 148 of the Act for the Assessment Year 2017-2018 during the extended time period as per The 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 UOI v. Ashish Agarwal 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 UOI v. Rajeev Bansal 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 Dhanraj Govindram Kella v. ITO (Gujarat)/Special Civil Application No.6387 of 2023, dated 08.07.2025 rendered in 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 NOAYDate of notice under section 148 under TOLANo of days of surviving time available till 30.06.2021Date of providing information under section 148A(b)
6387/20232013-201417.06.20211326.05.2022
5688/20232014-201509.06.20212123.05.2022
22260/20222016-201730.06.2021123.05.2022
996/20232017-201830.06.2021124.05.2022

 

SCA NODue date of filing replyDate 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:-
6387/202309.06.202204.06.202229.07.202222.06.2022
5688/202306.06.2022–27.07.202227.06.2022
22260/202207.06.202206.07.202230.07.202214.06.2022
996/202311.06.202210.06.202219.07.202218.06.2022

 

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 19.05.2022 and therefore, considering 15 days’ time to file reply by the assessee, the due date would be 20.06.2022. The petitioner filed reply on 01.06.2022. The order under section 148A(d) of the Act as well as notice under section 148 of the Act was issued on 31.07.2022. 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 16.06.2022.
8. Learned Senior Standing Counsel Mr. Maunil Yajnik has verified the above dates and could not controvert the same.
9. In view of above, the impugned notice dated 31.07.2022 issued under section 148 of the Act would be invalid notice as the said notice is issued after 20.06.2022 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:
xxx
(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 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 31.07.2022 is hereby quashed and set aside and all consequential proceedings are also quashed and set aside.