Reassessment Time-Barred: Gujarat HC Quashes Section 148 Notice Issued Beyond ‘Surviving Time’

The petitioner, Neerav Rameshbhai Shah, challenged a reassessment notice dated 20.07.2022 issued under Section 148 of the Income-tax Act, 1961 for Assessment Year 2017–18. Earlier, the Assessing Officer had issued a notice under Section 148 on 24.06.2021 during the extended period provided under the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020.

In Union of India v. Ashish Agarwal, the said notice was deemed to be a notice under Section 148A(b) of the Act. The Assessing Officer supplied information to the petitioner, granted time to file reply, and thereafter passed an order under Section 148A(d) and issued a fresh notice under Section 148. The petitioner contended that the impugned notice was issued beyond the permissible limitation period, reckoned on the basis of “surviving time” as clarified by the Supreme Court in Union of India v. Rajeev Bansal.

Issue Before Court: Whether a reassessment notice issued under Section 148 of the Income-tax Act after expiry of the “surviving time” available under TOLA, read with the decisions in Ashish Agarwal and Rajeev Bansal, is valid in law.

HC’s Ruling: The Hon’ble High Court held that the reassessment notice dated 20.07.2022 was issued beyond the permissible “surviving time” available to the Revenue. The Court observed that the Assessing Officer had supplied information on 25.05.2022, and even after allowing the statutory response period, the outer limitation for issuance of notice under Section 148 expired on 15.06.2022.

Relying on Rajeev Bansal, the Court reiterated that all reassessment notices issued beyond the surviving limitation period are time-barred and invalid. As the impugned notice was issued after expiry of the surviving time, it was held to be invalid. Thus, the notice and all consequential proceedings were quashed and set aside.

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