HC Quashes Income Tax Notice for Being Issued Beyond Surviving Time as per SC Order

The Gujarat High Court has quashed an Income Tax reassessment notice, calling it invalid for being issued beyond the time limits set by the Supreme Court.

The petitioner, Shirinbanoo Sarfarazkhan Pathan, challenged a notice issued by the Income Tax Officer under section 148 of the Income Tax Act. The notice was issued on 30.06.2021 during the extended time period as per the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2025 (TOLA). The final order under Section 148A(d), along with the reassessment notice, was issued on 17th August 2022.

The petitioner contended that the notice was time-barred and invalid as per the timelines set by the Supreme Court’s rulings in Union of India v. Ashish Agarwal (2022) and Union of India v. Rajeev Bansal (2024).

The Supreme Court in Union of India v. Ashish Agarwal (2022) treated such notices as new Section 148A(b) show-cause notices, which came into effect from 01.04.2021. The Apex Court in the case of Rajeev Bansal has held that the reassessment notices issued after the surviving period would be considered invalid.

The petitioner submitted that the AO had provided information to the petitioner on May 27, 2022, as per the directions issued by the Supreme Court in the Ashish Agarwal Case, and the petitioner filed a reply within 15 days. Considering the last permissible due date to issue the notice under section 148, read with TOLA, would be 24.06.2022. But the reassessment notice was issued on 17th August 2022.

The High Court agreed with the petitioner and held that the notice issued on 17th August 2022 was beyond the “surviving time”, making it an invalid notice. Based on this, the notice dated 17.08.2022 was quashed and set aside.