Delay by Assessee Can’t Validate an Otherwise Invalid S. 148 Notice, When Recovery Proceedings Are Initiated: Bombay HC

The Bombay High Court has held that the delay by assessee cannot validate an otherwise invalid notice under Section 148 of the Income Tax Act, especially when recovery proceedings are initiated. The bench of Justice B. P. Colabawalla and Justice Firdosh P. Pooniwalla has held that mere delay would not validate a notice which is otherwise void in law. Once the Department had unequivocally conceded the legal position before the Supreme Court, relief could not be denied solely on the ground of laches—especially when recovery proceedings had been initiated on the basis of such an invalid notice. The matter arose from a show cause notice issued under Section 148A(b) on 28 March 2022, alleging that income chargeable to tax had escaped assessment for AY 2015–16 in connection with an immovable property transaction. Subsequently, an order under Section 148A(d) was passed on 14 April 2022, holding that it was a fit case to issue a notice under Section 148. Thereafter, the reassessment proceedings culminated in an assessment order dated 19 February 2024 under Sections 147, 144, and 144B, making additions under Section 69 on account of short-term capital gains. A demand notice under Section 156 was also issued, followed by recovery proceedings in July and November 2025. Aggrieved, the petitioner approached the High Court challenging the jurisdictional validity of the notice and all consequential actions. The petitioner contended that the issue was squarely covered by the decision of the Supreme Court in Rajeev Bansal, reported in (2024) 167 taxmann.com 70 (SC). It was pointed out that in paragraph 19(f) of the judgment, the Revenue had categorically conceded that for AY 2015–16, all notices issued on or after 1 April 2021 would have to be dropped as they would not fall for completion within the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA). The petitioner further relied upon the Supreme Court’s subsequent decision in Deepak Steel and Power Ltd., (2025) 174 taxmann.com 144 (SC), wherein the Court reiterated that for AY 2015–16, notices issued after 1 April 2021 were liable to be dropped in light of the Revenue’s earlier concession. The Revenue opposed the writ petition on the ground that the petitioner had already availed the alternate remedy of filing an appeal before the Commissioner of Income Tax (Appeals). It was also argued that the petition suffered from delay and laches. However, the department did not dispute that the impugned notice pertained to AY 2015–16; and the notice under Section 148 was issued on 14 April 2022, i.e., after 1 April 2021. The concession recorded in Rajeev Bansal applied to such notices. The High Court observed that the issue stood conclusively settled by the Supreme Court. It reproduced the Revenue’s concession recorded in Rajeev Bansal: “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.” The Bench also noted that the same position was reiterated in Deepak Steel and Power Ltd. On the issue of delay, the Court held that mere delay would not validate a notice which is otherwise void in law. The Court observed that once the Department had unequivocally conceded the legal position before the Supreme Court, relief could not be denied solely on the ground of laches—especially when recovery proceedings had been initiated on the basis of such an invalid notice. The Court also referred to its earlier decision in Cherian Nallathu Abraham Annamma, (2025) 179 taxmann.com 433 (Bom), where under similar circumstances relating to AY 2015–16, reassessment notices issued after 1 April 2021 were quashed along with consequential orders. The Bombay High Court quashed and set aside the notice dated 14 April 2022 issued under Section 148; set aside the assessment order dated 19 February 2024; and quashed all consequential demand and recovery notices for AY 2015–16. The petitioner undertook to withdraw the appeal pending before the Commissioner of Income Tax (Appeals) within two weeks. The Court accepted the undertaking and clarified that if the present order were to be set aside in appeal, the withdrawn appeal would stand and be decided on merits. Case Details Case Title: Mitra Biswas Versus Income Tax Officer Citation: JURISHOUR-200-HC-2026(BOM) Case No.: Writ Petition (L) No.3068 Of 2026 Date: February 03, 2026 Counsel For Petitioner: Mr.Sham V. Walve A/W Bhavik Chheda I/B Sameer Dalal, Advocates Counsel For Respondent: Ravi Rattesar, Advocate Click Here To Read Order Read More: Executive Circular Can’t Curtail Statutory Limitation U/s 54 of GST Act: Calcutta HC Quashes Rejection of ITC Refund

Delay by Assessee Can’t Validate an Otherwise Invalid S. 148 Notice, When Recovery Proceedings Are Initiated: Bombay HC

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