Reassessment notice issued on or after April 1, 2021 for AY 2015-16 is time-barred and quashed.

By | July 17, 2026
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Reassessment notice issued on or after April 1, 2021 for AY 2015-16 is time-barred and quashed.

Issue

  • Whether an income escaping assessment notice issued under Section 148 on or after April 1, 2021, relating to Assessment Year 2015-16, is barred by limitation and liable to be set aside.

Facts

  • The Assessee filed a writ petition before the High Court challenging a reassessment notice issued under Section 148 of the Income-tax Act, 1961.

  • The impugned notice was issued by the Assessing Officer for the Assessment Year 2015-16.

  • It was an admitted fact on record that the disputed notice was issued by the Revenue on or after April 1, 2021.

Decision

  • The court held that the impugned notice issued under Section 148 for the Assessment Year 2015-16 was clearly time-barred.

  • The court observed that the reassessment notice was issued on or after the threshold date of April 1, 2021, making it unsustainable under the statutory time limits.

  • Consequently, the court ruled in favor of the Assessee and set aside the impugned Section 148 notice.

Key Takeaways

  • Strict Statutory Time Limits: Reassessment notices must strictly adhere to the limitation timelines prescribed under Section 149; any notice issued beyond the permissible statutory window lacks legal validity.

  • April 1, 2021 Threshold: For Assessment Year 2015-16, a notice issued under Section 148 on or after April 1, 2021, falls outside the standard limitation period for that specific period, resulting in a jurisdictional failure that completely voids the reopening proceedings.

HIGH COURT OF BOMBAY
Bhavik Bhupendra Shah
v.
Assistant Commissioner of Income-tax
B. P. COLABAWALLA and FIRDOSH P. POONIWALLA, JJ.
WRIT PETITION NO. 12482 OF 2025
JUNE  15, 2026
Madhur Agrawal and Atul Jasani for the Petitioner. Ashok Kotangle and Suresh Kabra for the Respondent.
ORDER
1. The above Writ Petition inter alia challenges the Notice issued under Section 148 of the Income Tax Act, 1961. The Assessment Year in question is Assessment Year 2015-16.
2. One of the many grounds on which the above Notice is challenged is that the Jurisdictional Assessing Officer had no jurisdiction to issue the impugned Notice but it was the Faceless Assessing Officer who had to issue the same. In support of this contention, the Petitioner Assessee relied upon the Judgement of this Court in the case of Hexaware Technologies Ltd. v. Asstt. CIT [2024] 464 ITR 430 (Bombay)/(Writ Petition No.1778 of 2023 decided on 3rd May 2024).
3. Following the aforesaid decision in Hexaware Technologies Ltd. (supra), the present Writ Petition came to be allowed and the impugned Notice issued under Section 148 was set aside. Since the challenge to Hexaware Technologies Ltd. (supra) was pending before the Hon’ble Supreme Court, in order not to burden the Revenue to approach the Supreme Court in every matter, we had, while disposing of the Writ Petition, granted an opportunity to the Revenue to revive the above Writ Petition in the event the decision in Hexaware Technologies Ltd. (supra) was set aside by the Hon’ble Supreme Court on this issue.
4. It now transpires that the issue of Hexaware Technologies Ltd. (supra) has been remanded back to the High Court for de novo consideration, especially taking into account the amendment introduced by the Legislature, namely the insertion of Section 147-A, w.e.f. 1st April 2026, having retrospective effect. The Hon’ble Supreme Court also clarified that all the contentions raised before the Supreme Court as well as any other grounds to quash the impugned notices could be urged before the High Court and the Supreme Court had not expressed any opinion on the merits of the controversy.
5. In all the matters that were disposed of by the Hon’ble Supreme Court, there was a batch of Appeals which pertained to Assessment Year 2015-16. In its order dated 4th May 2026, the Hon’ble Supreme Court inter alia recorded a concession on the part of the learned Additional Solicitor General that in Assessment cases pertaining to Assessment Year 2015-16, the Notice issued or proposed to be issued for re-assessment would stand barred by time in light of the view taken by the Hon’ble Supreme Court in UOI v. Rajeev Bansal  (SC)/(2024 SCC Online SC 2693). For the sake of convenience, the order passed by the Hon’ble Supreme Court on 4th May 2026 reads as under :
“ORDER
1. Delay condoned.
2. Leave granted.
3. This batch of civil appeals comprising 103 cases is slightly different than those cases which came to be disposed of by a three Judge Bench of this Court, including both of us (Surya Kant, CJI. and Joymalya Bagchi, J.), vide order dated 10.04.2026 passed in Civil Appeal No. 4716 of 2026 and connected matters.
4. The instant cases were segregated through the abovementioned order on the premise that they may be pertaining to Assessment Year 2015-16. It is fairly conceded by Mr. N. Venkataraman, learned Additional Solicitor General of India, representing the Revenue, that in the assessment cases pertaining to the year 2015-16, the notices issued/proposed to be issued for reassessment would stand barred by time in light of the view taken by this Court in Union of India & Ors. v. Rajeev Bansal, 2024 SCC OnLine SC 2693.
5. There is no quarrel that if the instant cases are found to pertain to Assessment Year 2015-16, then the impugned notices are liable to be struck down outrightly in terms of the concession on behalf of the Department recorded in paragraph 19 (f) of Rajeev Bansal (supra) and reiterated before us by the learned Additional Solicitor General of India.
6. However, if it is found that these cases pertain to an assessment year other than 2015-16, the respondent-assessees shall be entitled to raise all the contentions that have been permitted by this Court vide order dated 10.04.2026. Ordered accordingly.
7. Consequently, keeping in mind the reasons set out in order dated 10.04.2026, the impugned judgment in each appeal is set aside and the instant appeals are disposed of by remitting the matters to the jurisdictional High Courts for redetermination of the issues. As observed above, the High Courts shall firstly determine whether the matters pertain to Assessment Year 2015-16. If it is found to be so, no further adjudicatory exercise shall be required to be undertaken by the High Court, except to declare the notices as being time-barred in light of Rajeev Bansal (supra). However, if it is found that the case does not pertain to Assessment Year 2015-16, then all the issues shall be resolved in terms of the order dated 10.04.2026 passed in Civil Appeal No. 4716 of 2026.
8. Pending application(s), if any, including application(s) for substitution and impleadment/intervention stand closed.”
6. As far as the revival of this Petition is concerned, though the learned Counsel for the Petitioner had certain objections to the revival, we find that the said objections are wholly irrelevant for the present matter. As can be seen from the order of 4th May 2026, if it is found that the matter pertains to Assessment Year 2015-16, no further adjudicatory exercise is required to be taken by the High Court, except to declare the Notice as being time barred in light of the concession made by the Revenue in the case of Rajeev Bansal (supra). In the facts of the present case, it is an admitted fact that the impugned Notice under Section 148 is issued on or after 1st April 2021 and pertains to Assessment Year 2015-16. In these circumstances, we direct that the above Writ Petition stands revived. In the light of the fact that the impugned Notice is issued on or after 1st April 2021 and pertains to Assessment Year 2015-16, we hold that the same is clearly time barred as conceded by the Learned Additional Solicitor General before the Hon’ble Supreme Court in the case of Rajiv Bansal (supra). Accordingly, the Writ Petition succeeds and the impugned Notice issued under Section 148 is set aside. Consequently, any action taken or emanating from the said Notice is also hereby quashed and set aside.
7. Rule is made absolute in the aforesaid terms and the Writ Petition is also disposed of in terms thereof. However, there shall be no order as to costs.
8. This order will be digitally signed by the Private Secretary/Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order.