Bombay High Court

Hitesh Ramniklal Shah vs Assistant Commissioner Of Income Tax ... on 11 November, 2025

Author: B. P. Colabawalla

Bench: B. P. Colabawalla

        2025:BHC-OS:20957-DB


                                                                                        1.wp.4164.2025.doc



                               IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                    ORDINARY ORIGINAL CIVIL JURISDICTION


                                             WRIT PETITION NO.4164 OF 2025

                       Hitesh Ramniklal Shah                                              .. Petitioner

                               Versus

                       Assistant Commissioner of Income Tax-23(1),
                       Mumbai & Ors.                                                      .. Respondents
          Digitally
          signed by
          UTKARSH
UTKARSH   KAKASAHEB
KAKASAHEB BHALERAO
BHALERAO Date:
          2025.11.14
                            Mr.P. J. Pardiwalla, Senior Advocate a/w Jeet Kamdar
          15:13:39
          +0530
                            i/b Atul Jasani, Advocates for the Petitioner.

                            Ms.Mamta Omle, Advocate for the Respondents.

                                                CORAM           : B. P. COLABAWALLA &
                                                                  AMIT S. JAMSANDEKAR, JJ.

                                                DATE            : NOVEMBER 11, 2025

                       P. C.

1. At the outset, Mr.Pardiwalla, the learned senior counsel

appearing on behalf of the Petitioner, tenders a draft amendment to

substitute paragraph 12 of the above Writ Petition. This amendment is

necessitated because the statement made in paragraph 12 is factually

incorrect. It is to correct that mistake the amendment is sought.

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2. Considering this is an amendment which does not in any

way change the nature of the Writ Petition, and also considering that it

is an amendment sought at the pre-admission stage, we do not find any

impediment in allowing the said amendment. Accordingly, the draft

amendment tendered to the Court is taken on record and marked "X"

for identification.

3. The Petitioner is permitted to amend the Writ Petition in

terms of the draft handed in. Re-verification is dispensed with. The

amendment shall be carried out within a period of 1 week from today

and the amended copy of the Petition shall be served on the advocates

for the Revenue.

4. Rule. Respondents waive service. With the consent of

parties, Rule made returnable forthwith and heard finally.

5. By this Petition, the Petitioner challenges a notice dated 27

July 2022 issued under Section 148 of the Income-tax Act, 1961 ("the

Act"), the subsequent notices dated 9 October 2025 and 14 October

2025 issued under Section 142(1) of the Act, and the show cause notice

dated 18 October 2025 issued by Respondent No.1, inter alia on the

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ground that the notice under Section 148 of the Act is issued beyond the

period of limitation, and therefore, all subsequent notices will also be

bad in law.

6. The brief facts of the case are this. For the year under

consideration, i.e. the A.Y. 2014-15, the Petitioner filed his return of

income on 29 September 2014 declaring a total income of

Rs.64,86,660/- in respect of which no scrutiny assessment was made.

Respondent No.1 issued a notice dated 29 June 2021 under the

unamended provisions of Section 148 of the Act, after obtaining the

approval of the Principal Commissioner of Income Tax, Mumbai-19. The

Petitioner filed his return of income on 18 November 2021 in response

to the notice issued under Section 148 of the Act declaring the same

income that was declared in the original return of income.

7. After the judgment of the Hon'ble Supreme Court in UOI

V/S Ashish Agarwal [444 ITR 1 (SC)] delivered on May 4, 2022,

Respondent No.1 issued a notice dated May 25, 2022 under Section

148A(b) of the Act and called upon the Petitioner to furnish his reply

within two weeks to show cause as to why a notice under Section 148 of

the Act should not be issued to the Petitioner. In reply thereto, the

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Petitioner filed a letter dated June 3, 2022 requesting Respondent No.1

to drop the reopening proceedings. A further reply was filed on 17 June

2022 inter alia pointing out that the notice is time barred as per Section

149 of the Act; that there was no information with Respondent No.1

which suggested that income chargeable to tax has escaped assessment;

and submissions were made on the merits to demonstrate that no

income has escaped assessment. The Petitioner filed another reply on 25

June 2022 pointing out that the same information was already

considered while seeking to reassess the income for the A.Y. 2015-16

and, hence, the reopening for the A.Y. 2014-15 should be dropped.

However, Respondent No.1 passed an order under Section 148A(d)

dated 26 July 2022 rejecting the submissions of the Petitioner and

issued the impugned notice dated 27 July 2022 under Section 148 of the

Act.

8. Being aggrieved by this action, the Petitioner filed Writ

Petition No.130 of 2024 challenging the validity of the notice dated 27

July 2022 issued under Section 148 of the Act on the following

grounds:- (i) the notice dated 29 th June 2021 issued under Section 148

of the Act cannot be deemed to be a notice issued under Section 148A(b)

of the Act; (ii) The impugned notice dated 27 th July 2022 issued under

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Section 148 of the Act is barred by limitation as per Section 149 of the

Act; (iii) that there exists no 'information' as contemplated in Section

148 of the Act; (iv) the order under Section 148A(d) of the Act is bad in

law; (v) the sanction granted is bad in law; (vi) the jurisdictional

Assessing Officer lacked jurisdiction to issue the impugned notice and

pass the impugned order; and (vii) even on merits of the case no income

had escaped assessment.

9. After hearing the parties, the impugned notice dated 27 th

July 2022 was quashed by this Court vide its order dated 1 March 2024

solely on the ground that the notice was barred by limitation. This was

done by relying on its earlier judgment in Godrej Industries v. ACIT

[160 taxmann.com 13(Bom)]. All other grounds canvassed by the

Petitioner were kept open by this Court.

10. Being aggrieved by the order of this Court, Respondent No.1

filed a Special Leave Petition before the Hon'ble Supreme Court on 24

January 2025 being SLP No.5515 of 2025. This SLP was disposed off

vide order dated 24 February 2025 in terms of the findings given in

UOI v. Rajeev Bansal [(469) ITR 46 (SC)].

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11. The Petitioner submitted that the present Petition

challenges the validity of the reassessment proceedings on the grounds

which were not disposed off and expressly kept open in Writ Petition

No.130 of 2024 as well as on the ground of limitation having regard to

the interpretation placed by the Supreme Court in its judgment in

Rajeev Bansal (Supra) on Section 149 read with the Taxation and Other

Laws (Relaxation and Amendment of Certain Provisions) Act, 2020

[TOLA].

12. In view of the order passed by the Hon'ble Supreme Court

on 24th January 2025, Respondent No. 1 issued a notice dated 9 October

2025 under Section 142(1) of the Act to the Petitioner to provide details

in connection with the assessment for the A.Y.2014-15 on or before 14

October 2025 and referred to the assessment being revived consequent

to the judgment of the Supreme Court in Rajeev Bansal (supra). In

response thereto, the Petitioner filed letters dated 13 October 2025 and

14 October 2025 pointing out the effect of the judgment of the Supreme

Court in Ashish Agarwal (supra) and the effect of the "surviving period"

as per the judgment of the Supreme Court in Rajeev Bansal (supra)

specifying that the notice dated 27 July 2022 issued under Section 148

of the Act fell beyond the "surviving period" as per the judgment of

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Rajeev Bansal (supra), and hence, the reopening proceedings should be

dropped and Respondent No.1 is precluded from issuing the notice

under Section 142(1) of the Act.

13. Thereafter, Respondent No.1 issued another notice dated 14

October 2025 also under Section 142(1) of the Act to the Petitioner to

provide details in connection with the assessment for the A.Y. 2014-15

on or before October 17, 2025. In this notice, Respondent No.1 noted the

Petitioner's objections as to limitation but held that prima facie the

notice and the ensuing proceedings appear to be within the

relaxation/extension framework under TOLA. He also called upon the

Petitioner to file a brief note setting out its contentions. Accordingly, the

Petitioner filed a letter dated 17 October 2025 pointing out that the

reopening under Section 147 of the Act is not sustainable as it is barred

by limitation in terms of Section 149 of the Act read with TOLA as

interpreted by the Supreme Court in its judgment in Rajeev Bansal

(supra).

14. Respondent No.1 thereafter issued a show cause notice

dated 18 October 2025 fixing the hearing on 24 October 2025 to explain

why the proposed additions should not be made for the A.Y.2014-15

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before finalizing the assessment. In this notice, Respondent No.1 dealt

with the Petitioner's objections on limitation and found the same to be

untenable for the reasons set out from page 8 of the show cause notice.

15. For the sake of convenience and more particularly to

understand the argument of limitation, the sequence of events and the

relevant dates detailed hereinbefore are tabulated as under:-

           Sr.         Date                              Event
          No.

          1.      29-06-2021           Notice under erstwhile section 148
                                       [deemed to be a notice under new section
                                       148A(b)]

          2.      04-05-2022           Judgment of the Hon'ble Supreme Court
                                       in Ashish Agarwal

          3.      25-05-2022           Notice conveying reasons for reopening
                                       provided to the Petitioner pursuant to the
                                       judgment in Ashish Agarwal and providing
                                       a period of two weeks to the Petitioner to
                                       respond

          4.      03-06-2022           Reply filed by the Petitioner to the notice
                                       under section 148A(b)

          5.      08-06-2022           The two weeks' time granted elapsed.

          6.      17-06-2022           Second reply filed by the Petitioner to the
                                       notice issued under section 148A(b)

          7.      25-06-2022           Third reply filed by the Petitioner to the
                                       notice issued under section 148A(b)

          8.      26-07-2022           Order passed under section 148A(d)

                                     NOVEMBER 11, 2025
Utkarsh





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          9.     27-07-2022            Notice issued under section 148

          10.    09-10-2025            Notice under section 142(1)

          11.    13-10-2025            Reply filed by the Petitioner
                 &
                 14-10-2025

          12.    14-10-2025            Notice under section 142(1)

          13.    17-10-2025            Reply filed by the Petitioner

          14.    18-10-2025            Show cause notice issued by Respondent

16. Although multiple grounds are raised in the present writ

petition, we propose to confine ourselves to the challenge to the notice

under Section 148 of the Act on the ground that the same is barred by

limitation in view of the first proviso to the substituted Section 149(1) as

interpreted by the Hon'ble Supreme Court.

17. In this backdrop, the learned senior counsel for the

Petitioner urged that the Hon'ble Supreme Court in its judgment in the

case of Rajeev Bansal (supra) accepted the contention that had found

favour with this Court in Godrej Industries (supra) that to test the

validity of the notice under Section 148 issued after 1 April 2021, the law

in force on that date would have to be applied. The Supreme Court also

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held that applying this principle to test whether a notice under Section

148 is issued within the period of limitation one would have to give

effect to the terms of the first proviso to Section 149(1)(b). The first

proviso to Section 149(1)(b) enacts that a notice issued after 1 April 2021

has to be issued within such time as was permissible under the

unamended Section 149(1)(b). Thus, for Assessment Year 2014-15, the

notice under Section 148 under the unamended section provisions could

have been issued in terms of Section 149(1)(b) by 31 March 2021. On

this basis, Counsel urged that as the impugned notice is dated 27 July

2022, the same is beyond the period of limitation. It was further

submitted that the Supreme Court thereafter held that in order to

construe whether the notice was issued within the period of limitation

one would have to give effect to the provisions of TOLA as well as the

judgment of the Hon'ble Supreme Court in Ashish Agarwal and the

requirements of the provisos to Section 149. The Court held that during

the period from the date of issuance of the deemed notice under Section

148A(b) and the date of the judgment in Ashish Agarwal (supra), [i.e.

from 29th June 2021 to 4th May 2022] the Assessing Officers were

deemed to have been prohibited from passing a reassessment order, and

thus, the show cause notices were deemed to have been stayed by an

order of the Supreme Court from the date of the issuance till 4 May

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2022. The Court further extended this limitation and stated that the

show cause notices were deemed to have been stayed not only upto 4

May 2022 but till the date when the Assessing Officer provided the

relevant information and material to the Assessee in terms of the

directions issued in its judgment in Ashish Agarwal (supra). The Court

further noted that the provisos to Section 149 allows the exclusion of

time allowed to an Assessee to respond to the show cause notice under

Section 148A(b) to compute the period of limitation. The Hon'ble

Supreme Court therefore summarized that the total time that is

excluded for computation of the period of limitation within which the

notice is to be issued as encompassing the time during which the show

cause notices were effectively stayed, that is, from the date of the

original notice under Section 148 till the supply of the relevant

information or material by the Assessing Officers to the Assessee in

terms of the directions in Ashish Agarwal and a further period of two

weeks to allow to the Assessee to respond to the show cause notice. The

effect of this conclusion of the Supreme Court was that the time

surviving under the Act read with TOLA that will be available to the

revenue to issue the reassessment notice under Section 148 of the new

regime will have to be calculated by computing the number of days

between the date of the issuance of the deemed notice, till 30 June 2021,

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and accordingly, the reassessment notices to be issued must be within

the time limit surviving. Thus, in the present case it would be within two

days of the furnishing of the reply by the Petitioner.

18. The Petitioner submitted that the 'surviving period' is

required to be computed to determine the validity of the notice issued

under Section 148. The surviving period is calculated by taking into

account the number of days between the erstwhile notice under Section

148 of the Act (i.e. 29 June 2021) and 30 June 2021 which is to be

excluded. Hence, based on the facts of the Petitioner's case 2 days will

be added to the time granted to the Petitioner to respond to the deemed

show cause notice i.e. 8 June 2022. Therefore, for the notice to fall

within the surviving period it would have to be issued before 10 June

2022. However, in the present case the notice under Section 148 of the

Act is issued on 27 July 2022 which is clearly beyond the surviving

period. Further, the Petitioner submitted that it furnished its reply

within the time prescribed and did not ask for any additional time to file

its reply, and therefore, no further period can be excluded while

computing the period of limitation. However, on a demurer, even

assuming that the date of the last reply filed by the Petitioner is to be

considered, i.e., 25 June 2022, yet the notice under Section 148 of the

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Act would have to be issued by 27 June 2022. As the impugned notice is

issued on 27 July 2022 it is beyond the surviving period as

contemplated in Rajeev Bansal (supra). The Petitioner has also placed

reliance on the judgment of this Court in Gurpreet Singh V/S DCIT

[176 taxmann.com 673 (Bom)], the Delhi High Court judgment in

Ram Balram Buildhome (P.) Ltd V/S ITO [477 ITR 133 (Del)]

the Gujarat High Court in Dhanraj Govindram Kella V/S ITO [177

taxmann.com 194 (Guj)], and the Madras High Court in

Mrs.Thulasidass Prabavathi V/S ITO [174 taxmann.com 508

(Mad)] to substantiate their argument.

19. The Respondent on the other hand has sought to justify the

impugned notices on two grounds. The first is that the notice is issued

within the ten year time limit available in Section 149 of the Act for

issuing a notice under Section 148 of the Act and contends that the

notice issued on 27 July 2022 is within such time. Secondly, the

Respondent relies on the period available for passing the order under

Section 148A(d), viz., within one month from the end of the month in

which the reply is received and since the replies were received on 3 June

2022, 17 June 2022 and 25 June 2022, one month from the end of the

month would be 31 July 2022, and therefore, contended that the order

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under Section 148A(d) and the notice under Section 148 of the Act are

within time.

20. We have heard the learned Counsel for the parties. We have

also perused the papers and proceedings in the above Writ Petition. In

view of the controversy involved, it is necessary to refer to the judgment

of the Hon'ble Supreme Court in Rajeev Bansal (supra) which held as

under:-

"...49. The first proviso to Section 149(1)(b) requires the determination of whether the time limit prescribed under section 149(1)(b) of the old regime continues to exist for the assessment year 2021-2022 and before. Resultantly, a notice under Section 148 of the new regime cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice. This also ensures that the new time limit of ten years prescribed under section 149(1)

(b) of the new regime applies prospectively. For example, for the assessment year 2012-2013, the ten year period would have expired on 31 March 2023, while the six year period expired on 31 March 2019. Without the proviso to Section 149(1)(b) of the new regime, the Revenue could have had the power to reopen assessments for the year 2012-2013 if the escaped assessment amounted to Rupees fifty lakhs or more. The proviso limits the retrospective operation of Section 149(1)(b) to protect the interests of the assesses..

******

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...105. A direction issued by this Court in the exercise of its jurisdiction under Article 142 is an order of a court. The third proviso to Section 149 of the new regime provides that the period during which the proceedings under section 148A are stayed by an order or injunction of any court shall be excluded for computation of limitation. During the period from the date of issuance of the deemed notice under section 148A(b) and the date of the decision of this Court in Ashish Agarwal (supra), the assessing officers were deemed to have been prohibited from passing a reassessment order. Resultantly, the show cause notices were deemed to have been stayed by order of this Court from the date of their issuance (somewhere from 1 April 2021 till 30 June 2021) till the date of decision in Ashish Agarwal (supra), that is, 4 May 2022

106. In Ashish Agarwal (supra), this Court directed the assessing officers to provide relevant information and materials relied upon by the Revenue to the assesses within thirty days from the date of the judgment. A show cause notice is effectively issued in terms of Section 148A(b) only if it is supplied along with the relevant information and material by the assessing officer. Due to the legal fiction, the assessing officers were deemed to have been inhibited from acting in pursuance of the Section 148A(b) notice till the relevant material was supplied to the assesses. Therefore, the show cause notices were deemed to have been stayed until the assessing officers provided the relevant information or material to the assesses in terms of the direction issued in Ashish Agarwal (supra). To summarize, the combined effect of the legal fiction and the directions issued by this Court in Ashish Agarwal (supra) is that the show cause notices that were deemed to have been issued during the period between 1 April 2021 and 30 June 2021 were stayed till the date of supply of the relevant information and

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material by the assessing officer to the assessee. After the supply of the relevant material and information to the assessee, time begins to run for the assesses to respond to the show cause notices.

107. The third proviso to Section 149 allows the exclusion of time allowed for the assesses to respond to the show cause notice under section 149A(b) to compute the period of limitation. The third proviso excludes "the time or extended time allowed to the assessee." Resultantly, the entire time allowed to the assessee to respond to the show cause notice has to be excluded for computing the period of limitation. In Ashish Agarwal (supra), this Court provided two weeks to the assesses to reply to the show cause notices. This period of two weeks is also liable to be excluded from the computation of limitation given the third proviso to Section 149. Hence, the total time that is excluded for computation of limitation for the deemed notices is: (i) the time during which the show cause notices were effectively stayed, that is, from the date of issuance of the deemed notice between 1 April 2021 and 30 June 2021 till the supply of relevant information or material by the assessing officers to the assesses in terms of the directions in Ashish Agarwal (supra); and (ii) two weeks allowed to the assesses to respond to the show cause notices

b. Interplay of Ashish Agarwal with TOLA

108. The Income-tax Act read with TOLA extended the time limit for issuing reassessment notices under section 148, which fell for completion from 20 March 2020 to 31 March 2021, till 30 June 2021. All the reassessment notices under challenge in the present

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appeals were issued from 1 April 2021 to 30 June 2021 under the old regime. Ashish Agarwal (supra) deemed these reassessment notices under the old regime as show cause notices under the new regime with effect from the date of issuance of the reassessment notices. The effect of creating the legal fiction is that this Court has to imagine as real all the consequences and incidents that will inevitably flow from the fiction. East End Dwellings Co. Ltd. v. Finsbury Borough Council [1952] AC 109. [Lord Asquith, in his concurring opinion, observed: "If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it."] Therefore, the logical effect of the creation of the legal fiction by Ashish Agarwal (supra) is that the time surviving under the Income-tax Act read with TOLA will be available to the Revenue to complete the remaining proceedings in furtherance of the deemed notices, including issuance of reassessment notices under section 148 of the new regime. The surviving or balance time limit can be calculated by computing the number of days between the date of issuance of the deemed notice and 30 June 2021.

109. If this Court had not created the legal fiction and the original reassessment notices were validly issued according to the provisions of the new regime, the notices under section 148 of the new regime would have to be issued within the time limits extended by TOLA. As a corollary, the reassessment notices to be issued in pursuance of the deemed notices must also be within the time limit surviving under the Income-tax Act read with TOLA. This construction gives full effect to the legal fiction created in Ashish

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Agarwal (supra) and enables both the assesses and the Revenue to obtain the benefit of all consequences flowing from the fiction.

110. The effect of the creation of the legal fiction in Ashish Agarwal (supra) was that it stopped the clock of limitation with effect from the date of issuance of Section 148 notices under the old regime [which is also the date of issuance of the deemed notices]. As discussed in the preceding segments of this judgment, the period from the date of the issuance of the deemed notices till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra) has to be excluded from the computation of the period of limitation. Moreover, the period of two weeks granted to the assesses to reply to the show cause notices must also be excluded in terms of the third proviso to Section 149.

111. The clock started ticking for the Revenue only after it received the response of the assesses to the show causes notices. After the receipt of the reply, the assessing officer had to perform the following responsibilities: (i) consider the reply of the assessee under section 149A(c); (ii) take a decision under section 149A(d) based on the available material and the reply of the assessee; and

(iii) issue a notice under section 148 if it was a fit case for reassessment. Once the clock started ticking, the assessing officer was required to complete these procedures within the surviving time limit. The surviving time limit, as prescribed under the Income-tax Act read with TOLA, was available to the assessing officers to issue the reassessment notices under section 148 of the new regime.

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112. Let us take the instance of a notice issued on 1 May 2021 under the old regime for a relevant assessment year. Because of the legal fiction, the deemed show cause notices will also come into effect from 1 May 2021. After accounting for all the exclusions, the assessing officer will have sixty-one days [days between 1 May 2021 and 30 June 2021] to issue a notice under section 148 of the new regime. This time starts ticking for the assessing officer after receiving the response of the assessee. In this instance, if the assessee submits the response on 18 June 2022, the assessing officer will have sixty-one days from 18 June 2022 to issue a reassessment notice under section 148 of the new regime. Thus, in this illustration, the time limit for issuance of a notice under section 148 of the new regime will end on 18 August 2022.

113. In Ashish Agarwal (supra), this Court allowed the assesses to avail all the defences, including the defence of expiry of the time limit specified under section 149(1). In the instant appeals, the reassessment notices pertain to the assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018. To assume jurisdiction to issue notices under section 148 with respect to the relevant assessment years, an assessing officer has to: (i) issue the notices within the period prescribed under section 149(1) of the new regime read with TOLA; and (ii) obtain the previous approval of the authority specified under section 151. A notice issued without complying with the preconditions is invalid as it affects the jurisdiction of the assessing officer. Therefore, the reassessment notices issued under section 148 of the new regime, which are in pursuance of the deemed notices, ought to be issued within the time limit surviving under the Income-tax Act read with TOLA. A reassessment notice issued beyond the surviving time limit will be time- barred..."

(emphasis supplied)

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21. Subsequently several High Courts have considered the

judgment in Rajeev Bansal while dealing with the issue of the surviving

period. The Delhi High Court in Ram Balaram Buildhome (P.) Ltd

(supra) while considering the issue held as under:-

"...65. Thus, in the facts of the present case, the last date for issuance of notice under Section 148 of the Act for AY 2013-14 under the statutory framework, as was existing prior to 01.04.2021 was 31.03.2020, that is, six years from the end of the relevant assessment year.

66. By virtue of Section 3(1) of TOLA time for completion of specified acts, which fell during the period 20.03.2020 to 31.12.2020 were extended till 30.06.2021. Thus, the notice dated 01.06.2021 was issued twenty-nine days prior to the expiry of period of limitation for issuing a notice under Section 148 of the Act as was extended by TOLA. As noted above, the period from 01.06.2021, the date of issuance of notice, and 04.05.2022, being the date of decision of the Supreme Court in Ashish Agarwal (supra) is required to be excluded by virtue of the third proviso to Section 149(1) of the Act.

67. Additionally, the period from the date of decision in Ashish Agarwal (supra) till the date of providing material, as required to the accompanied with a notice under Section 148A(b) of the Act, is required to be excluded. Thus, the period between 04.05.2022 to 30.05.2022, the date on which the AO had issued the notice under Section 148A(b) of the Act in furtherance of his earlier notice dated 01.06.2021, is also required to be excluded by virtue of the third proviso to Section 149(1) of the Act as held by the Supreme Court in Rajeev Bansal (supra).

68. In addition to the above, the time granted to the petitioner to respond to the notice dated 30.05.2022 - the period of two weeks -is also required to be excluded by virtue of the third proviso to Section 149(1) of the Act. The petitioner had furnished its response

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to the notice under Section 148A(b) of the Act on 13.06.2022. Thus, the period of limitation began running from that date.

69. As noted above, by virtue of TOLA, the AO had period of twenty-

nine days limitation left on the date of commencement of the reassessment proceedings, which began on 01.06.2021, to issue a notice under Section 148 of the Act. The said notice was required to be accompanied by an order under Section 148A(d) of the Act. Thus, the AO was required to pass an order under Section 148A(d) of the Act within the said twenty-nine days notwithstanding the time stipulated under Section 148A(d) of the Act. This period expired on 12.07.2022.

70. Since the period of limitation, as provided under Section 149(1) of the Act, had expired prior to issuance of the impugned notice on 30.07.2022. The said is squarely beyond the period of limitation..."

22. The Gujarat High Court in Dhanraj Govindram Kella

(supra) while considering the issue held as under:-

"...65. The alternative contention of the petitioner as to whether notices would be valid notice or invalid notice considering 'surviving time' between the date of the issuance of notices under TOLA and 30 th June, 2021 or not is required to be considered and for that each matter has to be considered separately on the basis of the facts of case considering the date of issuance of notices under section 148 under TOLA by the Revenue and thereafter date of supplying information to the assessee and date of passing of order under section 148A(d) and date of issuance of notice under section 148 of the Act so as to consider whether issuance of notice under section 148 of the Act is within 'surviving time' as per the direction of Hon'ble Apex Court in case of Rajeev Bansal (supra) or not.

66. 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

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is issued within the period of 'surviving time' as per the directions issued by Hon'ble Apex Court in case of Rajeev Bansal (supra). 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.

67. Therefore, in facts of these petitions, following data is required to be considered to find out 'surviving time' to decide as to whether the impugned notices under section 148 of the Act issued under the new regime as per the decision of Hon'ble Apex Court in case of Ashish Agarwal (supra) would be valid notice or not in view of the decision of the Hon'ble Apex Court in case of Rajeev Bansal (supra):

          SCA NO          AY          Date of notice     No of days of    Date        of
                                      under section      surviving        providing
                                      148     under      time             information
                                      TOLA               available till   under section
                                                         30.06.2021       148A(b)
          6387/2023       2013-       17.06.2021         13               26.05.2022

          5688/2023       2014-       09.06.2021         21               23.05.2022

          22260/2022      2016-       30.06.2021         1                23.05.2022

          996/2023        2017-       30.06.2021         1                24.05.2022




          SCA NO         Due date of Date          of Date      of     Last    date   for
                         filing reply reply:-         order under      issuance of notice
                                                      section          under section 148
                                                      148A(d) and      as per surviving
                                                      notice under     time:-
                                                      section
                                                      148:-
          6387/2023      09.06.2022     04.06.2022     29.07.2022      22.06.2022
          5688/2023      06.06.2022     -              27.07.2022      27.06.2022


                                    NOVEMBER 11, 2025
Utkarsh





                                                                       1.wp.4164.2025.doc



           22260/2022     07.06.2022    06.07.2022     30.07.2022    14.06.2022
           996/2023       11.06.2022    10.06.2022     19.07.2022    18.06.2022

68. It is apparent from the above details that impugned notice under section 148 of the Act is issued beyond the period of 'surviving time' as per the direction of Hon'ble Apex Court in case of Rajeev Bansal (supra)and therefore, such notices would be invalid notices..."

23. The Madras High Court in Mrs.Thulasidass Prabavathi

(supra), while considering the issue held as under:-

"...17. Dealing with almost an identical situation pursuant to the decision of the Hon'ble Supreme Court in Union of India v. Rajeev Bansal, 2024 SCC OnLine SC 2693, the Delhi High Court quashed the notice dated 31.03.2021 issued to the assessee under Section 148 of the Act and the proceedings. Since the law laid down by the Hon'ble Supreme Court in Union of India v. Rajeev Bansal, 2024 SCC OnLine SC 2693 is a settled law, it is binding on this Court. I am therefore unable to take a contra view in the light of the aforesaid decision of the Hon'ble Supreme Court in Union of India v. Rajeev Bansal, 2024 SCC OnLine SC 2693..."

24. Based on the above, we observe that a notice under Section

148 of the Act cannot be issued if the period of six years from the end of

the relevant assessment year has expired at the time of issuance of the

notice relying on the first proviso to Section 149 of the Act. Hence, the

submission of the Respondent that a period of ten years is available to

issue the notice under Section 148 of the Act is misconceived.

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25. Further, we find that the second ground was urged before

this Court in the case of Gurpreet Singh (supra) where the Court

records the argument of the Respondent [in paragraph 7(vii)] that the

order under Section 148A(d) is to be passed within one month from the

end of the month in which the reply has been received, specifically

rejected the same in paragraph 18 as Section 148A(d) does not govern

the computation of time as contemplated in terms of Section 149 of the

Act. The said paragraph 18 is reproduced hereunder:-

"...18. The said contention is fundamentally misconceived. A notice under Section 148 of the IT Act accompanied by an order under Section 148A(d) is required to be issued within the time stipulated under Section 149 of the IT Act. Section 148A(d) does not govern the computation of time as contemplated in terms of Section 149 of the IT Act. The entire process under Section 148A(a) to (d) and the issuance of notice under Section 148 has to be completed within the total time available in terms of Section 149(1) of the IT Act for issuance of notice under Section 148. A notice issued under Section 148 of the IT Act which is beyond the time line stipulated under Section 149(1) is non-complaint and invalid. The timeline under Section 148A(d) is for the Assessing Officer to comply with the stipulations and the streamlining contemplated under Section 148A. This is primarily to bring in transparency and accountability into the system and is intended for the benefit of the assessees. However to suggest that Section 148A(d) extends the time limit under Section 149(1) and/or has a bearing on the time under Section 149(1) is a submission which is misconceived and lacks legal sanctity."

emphasis supplied

26. After considering the above exclusion period, we observe

that the remaining days for conclusion of the procedure for passing of

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an order in terms of Section 148A(d) and issuance of the notice under

Section 148 of the Act would be two days. In the present case, whichever

way we see it, the period of two days would expire on 10 June 2022 or

27 June 2022 respectively and, therefore, the notice under Section 148

of the Act issued on 27 July 2022 is time barred, inasmuch as it is issued

much after the surviving period. We concur with the judgments of the

co-ordinate bench in Gurpreet Singh (supra), of the Delhi High Court in