The Gujarat High Court has quashed reassessment notices for Assessment Year (AY) 2013-14, 14-15 , 16-17, 17-18 issued beyond surviving time.
The bench of Justice Bhargav D. Karia and Justice Pranav Trivedi has observed that reassessment notice under section 148 of the Income Tax Act is issued beyond the period of ‘surviving time’ as per the direction of Apex Court in case of Rajeev Bansal and therefore, such notices would be invalid notices.
The petitioners/assessee have challenged the notice issued under section 148 and order passed under section 148A(d) of the Income Tax Act, 1961for the Assessment Years 2013-2014, 2014-2015, 2016-2017, 2017-2018.
The petitioners have challenged notices and orders mainly on two issues.
Firstly, notices are time barred under section 149(1)(b) of the Income Tax Act
Secondly, the notices are issued without proper sanction under section 151 of the Income Tax Act.
Section 3(1) of TOLA empowers the Central Government to extend the time limit beyond March 31, 2021, by notification. Accordingly, in pursuance of such powers, the Central Government issued various notifications extending the time limit upto June 30, 2021 whereby it was provided that if the time prescribed for passing of any order or issuance of any notice, sanction, or approval fell for completion or compliance from March 20, 2020 to March 31, 2021; and if the completion or compliance of such action could not be made during the stipulated period, then the time limit for completion or compliance of such action was extended to June 30, 2021.
The notification issued by the Central Government under section 3(1) of TOLA contained an explanation that provisions of section 147 to 151 of the Income Tax Act prior to April 1, 2021 (old regime) shall be applied to reassessment proceedings initiated under them between April 1,2021 and June 30,2021.
Accordingly Notification No.20 of 2021 dated March 31, 2021 [(2021) 432 ITR (St.) 141] and Notification No.38 of 2021 dated April 27,2021 [(2021) 434 ITR (St.)11] directed and permitted the Assessing Officers to apply the provisions of the old regime for reassessment notices to be issued after coming into force of the Finance Act, 2021 with amendment with effect from April 1, 2021.
Hence the reassessment notices were issued between April 1, 2021, and 30th June 2021 under the provisions of section 148 of the old regime for A.Y.2013-14 to A.Y. 2017-18.
The assessee challenged the notices issued after 1st April, 2021 for reassessment on the ground that such notices could not have been issued under the old regime in view of coming into force of amendment brought by the Finance Act, 2021.
The court noted that 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).
The court stated that 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.
The court held that the reassessment notices issued under section 148 of the Act are accordingly quashed and set aside as 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.
Case Details
Case Title: Dhanraj Govindram Kella Versus Income Tax Officer, Ward (2)
Case No.: R/Special Civil Application No. 6387 Of 2023
Date: 08/07/2025
Counsel For Petitioner: Hiren J Trivedi
Counsel For Respondent: Mr Varun K Patel, Ms Maithili D Mehta And Mr Karan Sanghani, Senior Standing Counsel
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