Reassessment Notice Issued Under TOLA for AY 2015-16

Reassessment Notice Issued Under TOLA for AY 2015-16 Quashed as Time-Barred Following Rajeev Bansal Precedent

Issue

Whether reassessment proceedings initiated for Assessment Year 2015-16 under Section 148, following the deemed show-cause notice procedure pursuant to Ashish Agarwal, are time-barred and liable to be quashed under Section 149 read with TOLA in light of the Supreme Court’s ruling in Rajeev Bansal.

Facts

Assessment Year: The dispute pertains to Assessment Year 2015-16.
Initial Notice: The Revenue initially issued a reassessment notice under Section 148 on April 5, 2021.
Procedural Re-characterization: Pursuant to the Supreme Court judgment in Union of India v. Ashish Agarwal, the initial Section 148 notice was treated as a show-cause notice under Section 148A(b).
Consequential Proceedings: After receiving the assessee’s reply, the Assessing Officer passed an order under Section 148A(d) and issued a fresh notice under Section 148.
Concession in Rajeev Bansal: In Union of India v. Rajeev Bansal, the Revenue formally conceded that for AY 2015-16, all notices issued on or after April 1, 2021, would not fall within the outer time limit permitted for completion under TOLA (Taxation and Other Laws Amendment Act) and were liable to be dropped.

Decision

The court/tribunal held that for Assessment Year 2015-16, notices issued on or after April 1, 2021, fall outside the permissible extension period under TOLA.
Following the binding concession of the Revenue recorded in the Supreme Court decision in Rajeev Bansal, the reassessment proceedings were held to be time-barred.
The order passed under Section 148A(d) and the consequential notice under Section 148 were quashed.
The issue was decided in favour of the assessee.

Key Takeaways

Strict Limitation for AY 2015-16: Reassessment notices issued on or after April 1, 2021, for AY 2015-16 cannot seek protection under TOLA extensions and are strictly barred by time.
Binding Binding Nature of Supreme Court Concessions: The Revenue is bound by its admissions made before the Supreme Court in Rajeev Bansal regarding the invalidity of reassessments for AY 2015-16 initiated under the new regime on or after April 1, 2021.
Procedural Curbs on Reassessment: Even where the Ashish Agarwal mechanism was followed to convert old Section 148 notices into Section 148A(b) notices, the final proceedings must independently satisfy the statutory time limits set under Section 149 read with TOLA.

HIGH COURT OF BOMBAY

Polypeptide Laboratories (P.) Ltd.

Assistant Commissioner of Income-tax

B.P. Colabawalla and FIRDOSH P. POONIWALLA, JJ.

WRIT PETITION NO. 3990 OF 2022

JULY 6, 2026

Srihari Iyer, Adv. for the Petitioner. Akhileshwar Sharma, Adv. for the Respondent.

ORDER

1. In the above Writ Petition, Rule was issued on 22^nd April 2025 and the same was made returnable peremptorily on 30^th June 2025, at 2.30 p.m., subject to overnight part heard matters. It appears that due to paucity of time, the matter had not reached and has finally come up for final hearing today.

2. The above Writ Petition is filed seeking an appropriate order or direction under Article 226 and / or 227 of the Constitution of India calling for the records of the Petitioner’s case and after examining the legality and validity thereof, to quash and set aside the Notice issued under Section 148 of the Income Tax Act, 1961, dated 29^th July 2022, as well as the Order passed under Section 148A(d) of the Act dated 28^th July 2022.

3. The brief facts to be noted in the present Writ Petition are that initially, the Revenue had issued a Notice under Section 148, dated 5^th April 2021, for Assessment Year 2015-16. After the decision of the Hon’ble Supreme Court in the case of Union of India v. Ashish Agarwal 444 ITR 1 (SC), the Notices issued after 1^st April 2021 and upto 30^th June 2021 were to be treated as Show Cause Notices under Section 148A(b) of the Act. Accordingly, the Notice dated 5^th April 2021 was treated as a Show Cause Notice under Section 148A(b) and thereafter the Order dated 28^th July 2022 was passed under Section 148A(d). Once the order under Section 148A(d) was passed, a fresh Notice was issued on 29^th July 2022.

4. The issue of limitation of these Notices was the subject matter of another decision of the Supreme Court in the case of Union of India v. Rajeev Bansal 469 ITR 46 (SC). In this decision, and more particularly paragraph 19 thereof, the Revenue conceded that for Assessment Year 2015-16, Notices issued on or after 1^st April 2021 will have to be dropped as they will not fall for completion during the period prescribed under The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA). The relevant portion of the decision in Rajeev Bansal (supra) reads thus:

“19. Mr N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue:

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The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA.”

5. In the light of the concession made by the Revenue before the Hon’ble Supreme Court in Rajeev Bansal (supra), we find that the re-assessment proceedings in the present case, pertaining to Assessment Year 2015-16, are clearly time barred.

6. In these circumstances, the above Writ Petition is allowed in terms of prayer clause (i) which reads thus:

“i. This Hon’ble Court be pleased to issue a Writ of Certiorari or a writ in the nature of Certiorari or any other appropriate writ, order or direction under Article 226 and/or 227 of the Constitution of India calling for the records of the Petitioner’s case and after examining the legality and validity thereof quash and set-aside the notice issued u/s. 148 of the Act dated 29.07.2022 and Order passed u/s. 148A(d) of the Act dated 28.07.2022 and sustaining the reassessment proceedings;”

7. Rule is made absolute in the aforesaid terms and the Writ Petition is also disposed of in terms thereof.

8. However, there shall be no order as to costs.

9. 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.