Reassessment Notice Issued Beyond The Supreme Court Mandated Calculation Period Post-Ashish Agarwal And Rajeev Bansal Ruling Is Invalid As Time-Barred

By | June 13, 2026
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Reassessment Notice Issued Beyond The Supreme Court Mandated Calculation Period Post-Ashish Agarwal And Rajeev Bansal Ruling Is Invalid As Time-Barred

Reassessment Notice Issued Beyond The Supreme Court Mandated Calculation Period Post-Ashish Agarwal And Rajeev Bansal Ruling Is Invalid As Time-Barred

Issue

Whether the reassessment order under Section 148A(d) and the subsequent notice under Section 148, issued on July 29, 2022, for the Assessment Year 2014-15, were legally sustainable or invalid as time-barred under the provisions of the Income-tax Act, 1961, read with the Taxation and Other Laws (Relaxation of Certain Provisions) Act, 2020 (TOLA).

Facts

  • Original Action: The Assessing Officer (AO) initially issued a reassessment notice under the old Section 148 on June 24, 2021, utilizing the extended timelines provided under TOLA for the Assessment Year 2014-15.

  • Supreme Court Intervention: Following the landmark Union of India v. Ashish Agarwal judgment, this original notice was deemed to be a show-cause notice under the newly substituted Section 148A(b).

  • Statutory Compliance: In line with the apex court’s directions, the AO provided the requisite information to the assessee on May 25, 2022, granting 15 days to respond. The assessee timeously submitted its reply on June 7, 2022.

  • Impugned Order & Notice: The AO subsequently passed the order under Section 148A(d) and issued the fresh Section 148 notice on July 29, 2022.

  • Limitation Calculation: Factoring in the dates of the original June 2021 notice and the extension mechanisms under TOLA, as interpreted by the Supreme Court in Ashish Agarwal and clarified in Union of India v. Rajeev Bansal, the absolute limitation period for issuing the final Section 148 notice expired on June 16, 2022.

Decision

  • Held, In Favor of Assessee: The impugned order under Section 148A(d) and the fresh notice under Section 148 dated July 29, 2022, along with all consequential reopening proceedings, are declared invalid and bad in law.

  • Exceeding the Limitation Boundary: Since the recalculated statutory deadline for issuing the reassessment notice was June 16, 2022, the revenue department’s actions on July 29, 2022, clearly fell outside the permitted timeframe.

  • Binding Precedents: The time extension benefits granted to the revenue via TOLA are strictly bounded by the mathematical computations mandated by the Supreme Court in the Rajeev Bansal and Ashish Agarwal cases, leaving no room for administrative delays past the computed deadline.

Key Takeaways

  • Strict Adherence to Timelines: Reassessment proceedings are highly time-sensitive; even when the revenue department is given a lifeline to revive old notices under the Ashish Agarwal mechanism, they must strictly compute and adhere to the revised limitation deadlines.

  • TOLA Extension Limits: The integration of TOLA relaxation periods with the new reassessment regime has a hard stop. If the final Section 148 notice is issued even a single day after the calculated limitation date (June 16, 2022, in this specific matrix), the entire proceeding becomes void ab initio.

  • Interplay of Precedents: The ruling solidifies the application of the Rajeev Bansal judgment, ensuring that the revenue cannot indefinitely stretch timelines under the guise of processing responses received during the regularized Section 148A framework.

HIGH COURT OF GUJARAT
Hina Prakash Shah
v.
Income-tax Officer
A.S. Supehia and Ms. VAIBHAVI D. NANAVATI, JJ.
R/SPECIAL CIVIL APPLICATION NO. 6480 of 2023
JUNE  9, 2026
Jaimin A. Gandhi and Viresh I. Rudalal for the Petitioner. Karan G. Sanghani for the Respondent.
JUDGMENT
A.S. Supehia, 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 order under Section 148A(d) of the Income Tax Act, 1961 (for short “the Act”) dated 29.07.2022, notice under Section 148 of the Act dated 29.07.2022 and consequential reassessment proceedings under Section 147 of the Act 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 24.06.2021 under Section 148 of the Act for the Assessment Year 2014-2015 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 the Apex Court in the case of UOI v. Ashish Agarwal [2022] 138 taxmann.com 64/286 Taxman 183/444 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 Apex Court in the case of UOI v. Rajeev Bansal [2024] 167 taxmann.com 70/301 Taxman 238/469 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 of the Act pursuant to the directions issued by the Apex Court in the case of Ashish Agarwal (supra).
6. This Court in the case of Dhanraj Govindram Kella v. ITO [2025] 177 taxmann.com 194 (Gujarat) (Judgment dated 08.07.2025 rendered in 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 section beyond time’ Hon’ble Rajeev that impugned notice under 148 of the Act is issued the period of ‘surviving as per the direction of Apex Court in case of 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 Apex Court in the case of Ashish Agarwal (supra) on 25.05.2022 and therefore, considering 15 days’ time to file reply by the assessee, the due date would be 09.06.2022. The petitioner filed reply on 07.06.2022. The order under Section 148A(d) of the Act was issued on 29.07.2022. 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 the Apex Court in the case of Ashish Agarwal (supra) as well as Rajeev Bansal (supra), would be 16.06.2022 as original notice under Section 148 [now 148A(b)] was issued on 24.06.2021.
8. Learned Senior Standing Counsel Mr. Karan G. Sanghani has verified the above dates and could not controvert the same.
9. In view of above, the impugned order dated 29.07.2022 issued under Section 148A(d) of the Act, Notice under Section 148 of the Act dated 29.07.2022 and consequent reopening proceedings would be invalid as the said notice is issued after 16.06.2022 as per the decision of the Apex Court in the case of Ashish Agarwal (supra). Therefore, the impugned notice having been issued beyond the ‘surviving time’ would be invalid notice as held by the Apex Court in the 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 [2022] 138 taxmann.com 64/286 Taxman 183/444 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, the present writ petition is allowed. The impugned order under Section 148A(d) of the Act dated 29.07.2022 and Notice under Section 148 of the Act dated 29.07.2022 is hereby quashed and set aside and all consequential proceedings are also quashed and set aside. Rule is made absolute to the aforesaid extent.