Reassessment Notices Issued On or After 1-4-2021 for AY 2015-16 Beyond TOLA Outer Limit Are Void

By | August 29, 2026
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Reassessment Notices Issued On or After 1-4-2021 for AY 2015-16 Beyond TOLA Outer Limit Are Void

Reassessment Notices Issued On or After 1-4-2021 for AY 2015-16 Beyond TOLA Outer Limit Are Void
Issue
Whether notices issued under section 148 and section 148A of the Income-tax Act, 1961 on or after 1-4-2021 for Assessment Year 2015-16, along with consequential reassessment proceedings, are liable to be quashed as barred by limitation under TOLA read with section 149.
Facts
  • Assessment Year: The subject matter of the dispute pertains to Assessment Year (AY) 2015-16.
  • Issuance of Notices: The Revenue issued notices under sections 148 and 148A on or after 1-4-2021 to initiate reassessment proceedings for AY 2015-16.
  • Statutory Framework: The proceedings involved the applicability of time limits under section 149 read with section 3 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA).
  • Legal Challenge: The assessee filed a writ petition challenging the validity of the section 148/148A notices and all consequential proceedings, including the reassessment order, on the ground of limitation.
Decision
  • The notices issued on or after 1-4-2021 for AY 2015-16 were held to be beyond the permissible time limit prescribed under TOLA and section 149.
  • Following the binding precedent of the Supreme Court in Union of India v. Rajeev Bansal 469 ITR 46 (SC) and co-ordinate High Court decisions, the challenged notices and all consequential reassessment orders were quashed.
  • The issue was decided in favour of the assessee.
Key Takeaways
  • Strict Bar of Limitation: Reassessment notices issued under section 148/148A post 1-4-2021 for AY 2015-16 must fall strictly within the extended timelines allowable under TOLA; otherwise, they are barred by limitation.
  • Precedential Authority of Rajeev Bansal: The principles laid down by the Supreme Court in the landmark Rajeev Bansal judgment conclusively govern the validity and time limits of reassessment notices issued under the amended regime post-April 1, 2021.
  • Quashing of Consequential Orders: When the foundational reassessment notice under section 148 is declared void for lack of jurisdiction due to limitation, all subsequent proceedings, including final reassessment orders, automatically fail.
HIGH COURT OF GUJARAT
Mohmedmunaf Noormohmed Cambaywala
v.
Income-tax Officer
A.S. Supehia and Pranav Trivedi, JJ.
R/SPECIAL CIVIL APPLICATION NO. 6159 of 2026†
APRIL  29, 2026
JUDGMENT
A.S. Supehia, J. – Rule. Learned Senior Standing Counsel Mr. Karan Sanghani waives service of notice of rule on behalf of the respondents.
2. Having heard learned Counsels for the parties and perused the record, pertinent is to note that the captioned writ petition is arising out of the proceedings initiated by the Income Tax Department by invoking the provisions of Section 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’ for short), operative prior to 01.04.2021. The subsequent notices are issued by invoking Section 148A(b) of the amended Act, which came into force with effect from 01.04.2021. Subsequently, the order under Section 147 read with Section 250 read with Section 144B of the Act has been passed on 21.03.2026.
3. It is demonstrated before us that the issue pertaining to the notices invoking section 148 of the Act (prior to 01.04.2021) and Section 148A(b) of the Act, amended by the Finance Act, 2021 with effect from 01.04.2021, came up for consideration before the Apex Court in case of Union of India v. Rajeev Bansal (SC)/2024 SCC OnLine SC 2693.
4. For the Assessment Year 2015-2016, the Revenue conceded before the Apex Court that all the notices issued on or after 01.04.2021 will have to be dropped as they will not fall during the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (for short “the TOLA”). The submission was that as per the amended provisions in terms of Section 148A(b) of the Act, the Revenue could have issued notices only upto 31.03.2022, i.e. under the new regime, the notices issued by the Revenue are also time barred. Consequently, the subsequent proceedings including the order passed under Section 147 read with Section 250 read with Section 144B of the Act, dated 21.03.2026, is also bad in law.
5. Heard both the sides. The position of law placed before us could not be disputed by the learned Senior Standing Counsel appearing for the respondent -Revenue. Since the issue is squarely covered by the decision of Apex Court in case of Rajeev Bansal (supra) as well as by various decisions of this court, we, therefore, quash all the notices, subject matter of challenge in the captioned writ petition and all consequential proceedings including the reassessment order passed as above. Hence, the writ petition stands allowed in terms of the decision of the Apex Court in case of Rajeev Bansal (supra). Rule is made absolute to the aforesaid extent.