[Cites 13, Cited by 0]
Bombay High Court
Pratibha Syntex Limited vs Deputy Commissioner Of Income Tax ... on 13 March, 2026
Author: B. P. Colabawalla
Bench: B. P. Colabawalla
2026:BHC-OS:6713-DB
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
TRUSHA
TUSHAR
MOHITE ORDINARY ORIGINAL CIVIL JURISDICTION
Digitally signed by
TRUSHA TUSHAR
MOHITE
Date: 2026.03.17
15:07:11 +0530 WRIT PETITION (L) NO.8759 OF 2026
Pratibha Syntex Limited .. Petitioner
Versus
Deputy Commissioner of Income Tax, Circle 3(2)(1),
Mumbai & Others .. Respondents
Mr.Dharan V. Gandhi a/w Ms.Aanchal Vyas, Advocates for the
Petitioner.
Mr.Arjun Gupta (V.C.), Advocate for the Respondents.
CORAM: B. P. COLABAWALLA &
FIRDOSH P. POONIWALLA, JJ.
DATE: MARCH 13, 2026
P. C.
1. Rule. Rule made returnable forthwith. Respondents waive
service. By consent of the parties, the Writ Petition is taken up for final
hearing.
2. By this Petition under Article 226 of the Constitution of India,
the Petitioner challenges the validity of the notice dated 19.03.2024 issued
under section 148A(b), the order dated 04.04.2024 passed under section
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148A(d), and the consequential notice dated 04.04.2024 issued under section
148 of the Income Tax Act, 1961 ("the Act") for the Assessment Year ("AY")
2013-14.
3. The short issue that arises for consideration in the present
Petition is whether the impugned notices and order are barred by limitation
in terms of the first proviso to section 149(1) of the Act.
4. The learned Counsel appearing for the Petitioner submits that
the impugned proceedings for AY 2013-14 are time-barred. In this regard, he
relies upon the first proviso to section 149(1) of the Act to contend that for
Assessment Year 2021-22 and earlier years, no notice under Section 148 can
be issued if such notice could not have been issued at that time, on account of
it being beyond the time limit specified under the provisions of section 149(1)
(b) of the Act as they stood immediately before the commencement of the
Finance Act, 2021. He submits that under the unamended provisions, i.e.,
prior to 01.04.2021 ("old regime"), the maximum time limit for reopening an
assessment was six years from the end of the relevant Assessment Year. For
AY 2013-14, the six-year period expired on 31.03.2020. Further, such time
was extended till 30.06.2021 by the Taxation and Other Laws (Relaxation
and Amendment of Certain Provisions) Act 2020 ("TOLA"). The present
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notice under section 148 is dated 04.04.2024 and is therefore, barred by
limitation. In support of this contention, the learned Counsel placed heavy
reliance on the judgment of the Hon'ble Supreme Court in the case of Union
of India v. Rajeev Bansal [2024] 469 ITR 46 (SC).
5. Per contra, the learned Counsel for the Respondents supports
the impugned notices. He submits that under the amended section 149(1)(b)
of the Act, a notice under Section 148 can be issued up to ten years from the
end of the relevant Assessment Year if the income escaping assessment
amounts to Rs. 50,00,000/- or more. He contends that since the alleged
escapement in the present case exceeds the monetary threshold, the notice
issued in 2024 for AY 2013-14 is within the ten-year window provided by the
new law. He relied upon paragraph 48 of the decision in the case of Rajeev
Bansal (supra) to submit that one has to look at the law as on the date of
issuance of the notice. Consequently, the learned counsel submitted that
there is no merit in the above Writ Petition and the same be dismissed.
6. We have heard the learned Counsel for the parties and perused
the record. To appreciate the controversy, it is necessary to reproduce
section 149(1) of the Act, along with the first proviso, as substituted by the
Finance Act, 2021, and as amended by Finance Act, 2023:
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"149. Time limit for notice.
(1) No notice under section 148 shall be issued for the relevant
assessment year,--
(a) if three years have elapsed from the end of the relevant
assessment year, unless the case falls under clause (b);
(b) if three years, but not more than ten years, have elapsed from
the end of the relevant assessment year unless the Assessing
Officer has in his possession books of account or other
documents or evidence which reveal that the income chargeable
to tax, represented in the form of--
(i) an asset;
(ii) expenditure in respect of a transaction or in relation to an
event or occasion; or
(iii) an entry or entries in the books of account,
which has escaped assessment amounts to or is likely to amount
to fifty lakh rupees or more:
Provided that no notice under section 148 shall be issued at any
time in a case for the relevant assessment year beginning on or
before 1st day of April, 2021, if a notice under section 148 or
section 153A or section 153C could not have been issued at that
time on account of being beyond the time limit specified under
the provisions of clause (b) of sub-section (1) of this section or
section 153A or section 153C, as the case may be], as they stood
immediately before the commencement of the Finance Act,
2021."
(emphasis supplied)
7. Section 149(1)(b) of the Act provides time of 10 years from the
end of the relevant Assessment Year for issuance of notice under section 148
of the Act. However, the same is subject to the first proviso. A plain reading
of the first proviso to section 149(1) makes it clear that it acts as a restriction
on the retrospective application of the extended ten-year limitation period. It
mandates that for any Assessment Year beginning on or before 01.04.2021, a
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notice under section 148 cannot be issued at any time, if such notice could
not have been issued at such time under section 149(1)(b) of the Act, as it
stood immediately before the commencement of the Finance Act, 2021 (i.e.,
the provisions as they stood before the Finance Act, 2021). In the present
case we are not concerned with sections 153A and 153C of the Act, as
reference to such provisions would arise only in search or requisition cases. It
is undisputed that the said sections are not relevant here.
8. Moreover, this issue is no longer res integra. The Hon'ble
Supreme Court in Union of India v. Rajeev Bansal (supra) has interpreted the
first proviso to section 149(1). The relevant observations of the Supreme
Court in paragraphs 46, 49 and 53 are reproduced below:
" 46. The ingredients of the proviso could be broken down
for analysis as follows: (i) no notice under section 148 of the
new regime can be issued at any time for an assessment year
beginning on or before 1 April 2021; (ii) if it is barred at the
time when the notice is sought to be issued because of the "time
limits specified under the provisions of" 149(1)(b) of the old
regime. Thus, a notice could be issued under section 148 of the
new regime for assessment year 2021-2022 and before only if
the time limit for issuance of such notice continued to exist
under section 149(1)(b) of the old regime.
...
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
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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.
...
53. The position of law which can be derived based on the
above discussion may be summarized thus: (i) Section 149(1) of
the new regime is not prospective. It also applies to past
assessment years; (ii) The time limit of four years is now
reduced to three years for all situations. The Revenue can issue
notices under section 148 of the new regime only if three years
or less have elapsed from the end of the relevant assessment
year; (iii) the proviso to Section 149(1)(b) of the new regime
stipulates that the Revenue can issue reassessment notices for
past assessment years only if the time limit survives according to
Section 149(1)(b) of the old regime, that is, six years from the
end of the relevant assessment year; and (iv) all notices issued
invoking the time limit under section 149(1)(b) of the old regime
will have to be dropped if the income chargeable to tax which
has escaped assessment is less than Rupees fifty lakhs."
9. Thus, the Hon'ble Supreme Court has categorically held that a
notice could be issued under section 148 of the new regime for Assessment
Year 2021-2022 and before, only if the time limit for issuance of such notice
continued to exist under section 149(1)(b) of the old regime. If, at any
particular point of time, after the new regime has kicked in, the Department
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could not have issued a notice under section 148 of the Act, due to the
limitation of section 149(1)(b) of the Act prior to the amendment by Finance
Act, 2021 i.e., the old regime, then at such point of time no notice under
section 148 can be issued under the new regime as well. This benefit is for AY
2021-22 and earlier assessment years.
10. In so far as the reliance of the learned Counsel for the
Respondents on paragraph 48 of the judgement in the case of Rajeev Bansal
(supra) is concerned, it may be noted that there is no quarrel with the
proposition that the notices have to be judged according to the law existing
on the date the notice is issued. That is the settled law. However, the law as
on the date of issuance of notice under section 148, includes not only section
149(1)(b) but also the first proviso to section 149(1). Further, the Hon'ble
Supreme Court in Rajeev Bansal (supra) itself has in paragraphs 49 and 53
given its findings relating to the first proviso, which we have reproduced
above. Therefore, this argument does not support the case of the Revenue,
and, on the contrary, assists the Petitioner herein.
11. Now, this brings us to the next question, i.e. what is the time
limit to issue a notice under section 149(1)(b) of the old regime. Under the old
regime, the maximum time limit for reopening an assessment under Section
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149(1)(b) was six years from the end of the relevant Assessment Year. For the
Assessment Year 2013-14, the six-year period expired on 31.03.2020.
Further, as rightly pointed out by the learned Counsel for the Petitioner, such
period was extended, first till 31.03.2021 by TOLA. Until 31.03.2021 the old
regime applied. This period was further extended from 01.04.2021 till
30.06.2021 by TOLA. Notices issued under section 148 of the Act between
01.04.2021 and 30.06.2021 were subject matter of litigation in the case of
Union of India v. Ashish Agarwal [2022] 444 ITR 1 (SC) and in the case of
Rajeev Bansal (supra). The later decision has laid down a mechanism by the
name "surviving period" to determine the validity of the notice under section
148 of the Act in terms of limitation. Admittedly no notice under section 148
was issued in the present case between 01.04.2021 and 30.06.2021.
12. In a nutshell, after 30.06.2021, no notice under section 148
could have been issued for reopening the assessment for AY 2013-14. We
may hasten to add that notices issued under section 148 of the Act, between
01.04.2021 till 30.06.2021, which were the subject matter of litigation in the
case of Ashish Agrawal (supra), and where such notices were deemed to be
notices issued under section 148A(b) of the Act, and where pursuant to the
decision in the case of Ashish Agrawal (supra), fresh notices were issued
under section 148 of the Act, the same are governed by the decision in the
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case of Rajeev Bansal (supra) and not the present order.
13. Applying the ratio of Rajeev Bansal (supra) to the facts of the
present case, it is evident that for AY 2013-14, the time limit for issuance of
notice under Section 148 was latest by 30 th June 2021. In the present case,
the notice is issued on 4th April 2024 and has certainly expired as on
19.03.2024 and as on 04.04.2024. Consequently, by virtue of the first proviso
to section 149(1), the Revenue is barred from issuing the notice under section
148 of the Act under the new regime, notwithstanding the ten-year period
provided in section 149(1)(b) after its amendment by Finance Act of 2021.
14. The Writ Petition is, accordingly, allowed in terms, of prayer
clause (a), which reads as under:
"(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 or 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 Impugned Notice
dated 19.03.2024 issued under Section 148A(b) (Exhibit B), the
Impugned Order dated 04.04.2024 passed under Section
148A(d) (Exhibit C), the Impugned Notice dated 04.04.2024
issued under Section 148 (Exhibit D); and all subsequent
proceedings, including notices under Section 143(2) and 142(1).
15. 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.
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16. 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.]
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