[Cites 14, Cited by 0]
Bombay High Court
Guru Udyog Private Limited vs Income Tax Officer Ward 9(3)(1), on 24 February, 2026
Author: B. P. Colabawalla
Bench: B. P. Colabawalla
2026:BHC-OS:5629-DB
2.wp(l).5076.2026.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO.5076 OF 2026
Guru Udyog Private Limited .. Petitioner
Versus
Income Tax Officer,
Ward - 9(3)(1), Mumbai & Ors. .. Respondents
UTKARSH
KAKASAHEB Mr.Dharan Gandhi a/w Aanchal Vyas, Advocates for the
BHALERAO
Digitally signed by
Petitioner.
UTKARSH KAKASAHEB
BHALERAO
Date: 2026.03.05
11:21:35 +0530
Mr.Y. S. Bhate a/w Akanksha Bobhate, Advocates for the
Respondents.
CORAM : B. P. COLABAWALLA &
FIRDOSH P. POONIWALLA, JJ.
DATE : FEBRUARY 24, 2026
P. C.
1. Rule. Respondents waive service. With the consent of
parties, Rule made returnable forthwith and heard finally.
2. The present Petition has been filed primarily challenging
the notice under Section 148 of the Income Tax Act, 1961 ("the IT Act")
dated 30th July 2022 issued by Respondent No.1 seeking to reopen the
Petitioner's assessment for the A.Y.2014-15, the order passed under
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Section 148A(d) of the IT Act dated 30 th July 2022, the order disposing
of objections dated 13 th January 2026, and the consequential
Assessment Order dated 29 th January 2026 passed under Section 147
read with Section 144B of the IT Act for the A.Y.2014-15.
3. The Petitioner had filed its original Return of Income on
29th November 2014 declaring a total income of Rs.5,47,060/-. The case
was selected for scrutiny and an Assessment Order under Section 143(3)
was passed on 19th December 2016.
4. Subsequently, the assessment of the Petitioner for the year
under consideration, i.e. A.Y.2014-15, was reopened vide Notice dated
29th June 2021 issued under Section 148 of the IT Act by the Income Tax
Officer, Ward 10(3), Delhi i.e., Respondent No.3. The said Notice was
undisputedly issued under the old regime i.e., under the law before its
substitution by the Finance Act, 2021.
5. In Union of India V/S Ashish Agarwal [(2022) 444
ITR 1 (SC)], the Hon'ble Supreme Court held that notices of the
present nature were deemed to be a notice under Section 148A(b) of the
IT Act. The Hon'ble Supreme Court issued specific directions,
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mandating that the Assessing Officers shall, within 30 days from the
date of the judgment (4th May 2022), provide the information and
material relied upon by the Revenue to the assessees.
6. Pursuant to the directions in Ashish Agarwal (supra),
Respondent No.3 issued letter/notice dated 17th May 2022 and 18th May
2022 providing information to the Petitioner. The last day to file reply
was 1st June 2022. The Petitioner filed a detailed reply on 1 st June 2022.
In the said reply, the Petitioner specifically objected to the jurisdiction
of the Delhi Officer, pointing out that the Petitioner's registered office
had shifted to Mumbai in 2018, the PAN was migrated, and the return
for A.Y.2020-21 was filed in Mumbai.
7. It appears that accepting the objection regarding
jurisdiction, the proceedings were transferred to Mumbai. Thereafter,
Respondent No.1 (Mumbai Officer) issued a second notice under
Section 148A(b) on 26th July 2022 and passed an order under Section
148A(d) on 30th July 2022 and issued the impugned notice under
Section 148 on the same date, i.e., 30 th July 2022. In the order disposing
of the objections under Section 148A(d) of the IT Act, it has been
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accepted that the jurisdiction was transferred pursuant to the objection
raised by the Petitioner.
8. The entire reassessment proceedings were challenged
before this Court in Writ Petition No.5737 of 2023. This Court, vide its
order dated 1st March 2024, quashed the said notice, holding it to be
barred by limitation. It appears that aggrieved by the said order, the
Respondents preferred a Special Leave Petition before the Hon'ble
Supreme Court. The Hon'ble Supreme Court, vide its order dated 24 th
January 2025, set aside the order of this Court with a direction to follow
the decision of the Hon'ble Apex Court in the case of UOI V/S Rajeev
Bansal [(2024) 469 ITR 46 (SC)].
9. Consequent to the revival of the assessment proceedings,
Respondent No.1 issued a notice under Section 142(1) of the IT Act
dated 15th December 2025, reiterating the allegations and requiring the
Petitioner to furnish various details.
10. The Petitioner, vide its detailed submission dated 7 th
January 2026, filed its objections to the reassessment proceedings. The
primary objection raised was that the notice under Section 148 of the IT
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Act dated 30th July 2022 was barred by limitation based on the
"surviving period" calculation as laid down in the case of Rajeev Bansal
(supra).
11. Respondent No.1, vide order dated 13 th January 2026,
disposed of the said objections. Respondent No.1 rejected the
Petitioner's contention on limitation by invoking the fourth proviso to
Section 148A of the IT Act, claiming that the period of limitation was
extended to 7 days due to the transfer of jurisdiction.
12. Thereafter, further notices were issued, including a detailed
notice under Section 142(1) dated 15 th January 2026. Subsequently, a
Show Cause Notice dated 20th January 2026 was issued proposing an
addition of Rs.50,82,540/-. The Petitioner's request for adjournment
was rejected vide letter dated 23rd January 2026.
13. It is the Petitioner's case that without allowing the
Petitioner sufficient time, Respondent No.1 passed the impugned
Assessment Order under Section 147 read with Section 144B of the IT
Act on 29th January 2026, confirming the addition of Rs.50,82,540/- to
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the Petitioner's income. A notice of demand was also raised on the same
date.
14. In this factual backdrop, Mr. Gandhi, the learned counsel
appearing on behalf of the Petitioner submitted as under:-
(a) The proceedings are time-barred as per the decision of the
Hon'ble Supreme Court in Rajeev Bansal (supra). The
original notice under Section 148 was issued on 29 th June
2021. The time limit under TOLA expired on 30th June 2021.
Thus, the "surviving period" available to the Revenue was
only 2 days.
(b) The Petitioner replied to the show cause notice on 1 st June
2022. Applying the ratio of Rajeev Bansal (supra), the notice
under Section 148 ought to have been issued within 2 days
from the date of the reply. However, the impugned notice
under Section 148 was issued on 30 th July 2022, which is
clearly beyond the limitation period.
(c) The issuance of a second notice under Section 148A(b) on 26 th
July 2022 is bad in law. The Hon'ble Supreme Court in Ashish
Agarwal (supra) granted a specific window of 4 weeks (30
days) for the Revenue to provide material. This period
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expired in early June 2022. The Department cannot issue a
fresh notice in July 2022 to artificially extend the time-
barring dates.
(d) The original notice under Section 148 (dated 29 th June 2021)
and the first Section 148A(b) notice (dated 18 th May 2022)
were issued by the Office in Delhi who had no jurisdiction
over the Petitioner, a fact which was accepted by the
Department by transferring the case. Therefore, the initiation
of proceedings itself was without jurisdiction.
15. Per contra, the learned counsel for the Respondents relied
upon the order disposing of objections dated 13 th January 2026. It was
submitted that since the jurisdiction was transferred to Mumbai, the
time should be reckoned from the date of the second notice issued by
the Mumbai Officer on 26th July 2022. Reliance was placed on the
fourth proviso to Section 148A (as it then stood) to contend that the
Revenue is entitled to an extension of 7 days, and therefore the notice
dated 30th July 2022 is within time.
16. We have heard the learned counsel for the parties. The
primary controversy revolves around the limitation period for issuing
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the notice under Section 148 of the Act in light of the judgment in
Rajeev Bansal (supra). The Hon'ble Supreme Court has categorically
held that the Revenue must issue the notice under Section 148 within
the "surviving period" available under the IT Act read with TOLA.
Further, the Hon'ble Supreme Court has also specified the method to
compute the surviving period. The entire working of the surviving
period hinges on the initial time frames given in the judgment of the
Hon'ble Supreme Court in case of Ashish Agarwal (supra).
18. We find merit in the contention of the Petitioner regarding
the second notice dated 26th July 2022. The Hon'ble Supreme Court in
Ashish Agarwal (supra) exercised its powers under Article 142 to grant
a one-time opportunity to the Revenue to regularize the notices issued
under the old regime. The Court specifically directed the Assessing
Officers to provide information within 30 days from the date of the
judgment (4th May 2022). This timeline was to be strictly followed. The
Department cannot unilaterally issue a second show cause notice under
Section 148A(b) or any other notice on 26 th July 2022, well beyond the 4
week period granted by the Hon'ble Supreme Court, merely to overcome
the limitation or jurisdictional defects or for any other purposes. By
issuing a notice beyond the prescribed period, the time-barring dates
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cannot be extended. This amounts to an artificial extension of time
limits which is not permissible in law. The second notice dated 26 th July
2022 is therefore, bad in law. Even assuming such notice is valid, still
the limitation period has to be counted as per the decision in case of
Rajeev Bansal (supra) i.e., on expiry of 30 days (time given to the
Department to provide material to the assessees) and a further period of
2 weeks which was the time given to the assessees to file its reply. The
second notice which is issued beyond the period for 4 weeks from the
date of the decision in case of Ashish Agarwal (supra), and the due date
to reply to such notice or the date of actual filing of reply to such notice,
cannot be taken into account for computing the surviving period.
19. Regarding the Respondent's reliance on the fourth proviso
to Section 148A for a further extension of 7 days, we are unable to accept
this submission. The Hon'ble Supreme Court in Rajeev Bansal (supra)
have duly considered the proviso and statutory extensions available
under the IT Act including the special extension granted by TOLA.
Having considered the same, the Court derived a specific mechanism to
calculate the "surviving period". The Court has categorically held that
the limitation period has to be counted on expiry of 6 weeks period (4
weeks for the Department to provide material and 2 weeks for the
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assessees to file reply). No further extension based on the fourth proviso
can be granted over and above the mechanism settled by the Hon'ble
Supreme Court, as no such additional time was granted by the Court.
20. To demonstrate that the impugned notice is time-barred, it
would be apposite to set out the timelines in the present case in the
following table:-
Sr.No Date Event
Notice under the erstwhile Section 148 issued by
1. 29.06.2021
Respondent No.3.
Judgment of Hon'ble Supreme Court in Ashish
2. 04.05.2022
Agarwal.
Notice conveying reasons for reopening provided
to the Petitioner pursuant to the judgment in
3. 18.05.2022
Ashish Agarwal and providing a period of two
weeks to the Petitioner to respond.
Last day to file Reply (the Petitioner also filed its
4. 01.06.2022
objections on the said date).
Second Notice under Section 148A(b) read with
5. 26.07.2022
Section 129 issued by Respondent No.1.
6. 30.07.2022 Impugned Notice issued under Section 148.
7. 29.01.2026 Impugned Assessment Order passed.
21. From the table set out above and applying the law laid
down by the Hon'ble Supreme Court in Rajeev Bansal (supra) the
remaining days for conclusion of the procedure for passing of an order
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in terms of Section 148A(d) and issuance of notice under Section 148 of
the Act would be 2 days. As evident from the table above, the surviving
period of 2 day expired on or about 3 rd June 2022 (calculating from the
date of reply/last date to file reply). The impugned notice under Section
148 was issued on 30th July 2022, which is patently beyond the
limitation period prescribed by the Hon'ble Supreme Court. The
issuance of the second notice on 26th July 2022 and time granted in the
said notice upto 28th July 2022 cannot save the proceedings.
22. The Writ Petition accordingly succeeds. Since, we have
allowed the Petition on the ground of limitation, we are not inclined to
delve into the issue of jurisdiction or any other issues, at this stage.
23. In view of the foregoing discussion, the Writ Petition is
allowed in terms of prayer clauses (a) which reads thus:-
"(a) that this Hon'ble Court may be pleased to issue a Writ of
Certiorari or a Writ in the nature of Certiorari or any other
appropriate Writ, Order of direction, calling for the records of
the Petitioner's case and after going into the legality and
propriety thereof, to quash and set aside the said notice under
section 148 of the Act dated 30.07.2022 ("Exhibit K"), Order
under section 148A(d) of the Act dated 30.07.2022 ("Exhibit J")
and show cause notice under section 148A(b) of the Act dated
29.06.2021 ("Exhibit D"), impugned Assessment Order dated
29.01.2026 ("Exhibit O"), notice dated 26.07.2022 (exhibit I1),
the Order disposing objections dated 13.01.2026 ("Exhibit N")
and the consequential notice of demand and penalty notices.
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24. Rule is made absolute in the aforesaid terms, and the Writ
Petition is also disposed of in terms thereof. However, there shall be no
order as to costs.
25. This order will be digitally signed by the Private Secretary/
Personal Assistant of this Court. All concerned will act on production by
fax or email of a digitally signed copy of this order.
[FIRDOSH P. POONIWALLA, J.] [B. P. COLABAWALLA, J.]
FEBRUARY 24, 2026
Utkarsh
