The Gujarat High Court has quashed over a hundred reassessment notices issued by the Income Tax Department for the Assessment Year 2015–16, citing them as time-barred and issued without due legal sanction.
The bench of Justice Bhargav D. Karia and Justice Pranav Trivedi observed that reassessment notices for AY 2015–16 issued after 01.04.2021, even if during TOLA’s extended period till 30.06.2021, are invalid. The Department’s argument of extended time under TOLA was rejected in light of the Supreme Court’s ruling in Union of India v. Rajeev Bansal (2024), where the Revenue conceded that for AY 2015–16, no notice could survive beyond March 31, 2021.
The Income Tax Department had issued reassessment notices under Section 148 post April 1, 2021, for AY 2015–16 relying on TOLA, which extended statutory timelines due to COVID-19 disruptions. However, effective 01.04.2021, a new procedure under Section 148A was introduced, mandating pre-notice inquiry and opportunity to be given to the taxpayer.
The Supreme Court in Union of India v. Ashish Agarwal held that all reassessment notices issued after April 1, 2021, under the old regime were to be treated as deemed notices under the new Section 148A(b). Accordingly, the Department issued fresh notices post-Ashish Agarwal, but their validity was challenged on multiple legal grounds, including limitation and absence of proper sanction.
The Gujarat High Court relied heavily on Rajeev Bansal and Deepak Steel and Power Ltd v. CBDT (2025), both of which clearly affirmed the time-barred nature of such notices and recorded the Revenue’s concession that AY 2015–16 falls outside the reassessment window post the Finance Act, 2021.
The Court noted similar decisions from Delhi, Punjab & Haryana, Rajasthan, and Karnataka High Courts, strengthening the legal position that such notices are unsustainable.
Consequently, the Court quashed all the impugned notices issued under Section 148 for AY 2015–16 and made the rule absolute, bringing relief to over 100 petitioners represented by senior counsels including Mr. Tushar Hemani, Mr. S.N. Soparkar, Mr. Manish J. Shah, and others.
Case Details
Case Title: Narendra Maganlal Purohit Versus DCIT
Case No.: R/Special Civil Application No. 17443 Of 2022
Date: 14/07/2025
Counsel For Petitioner: Tushar Hemani Senior Advocate
Counsel For Respondent: Maithili D Mehta, Senior Standing Counsel
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