Madras High Court
Veena Gupta vs Deputy Commissioner Of Income Tax on 25 November, 2025
Author: C.Saravanan
Bench: C.Saravanan
W.P.No.23691 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 25.11.2025
CORAM :
THE HONOURABLE MR.JUSTICE C.SARAVANAN
W.P.No.23691 of 2022
and
W.M.P.Nos.22632, 22634 and 28153 of 2022
Veena Gupta ... Petitioner
Vs.
Deputy Commissioner of Income Tax,
Non-Corporate Circle 3(1),
Aayakar Bhavan,
121, Mahatma Gandhi Road,
Nungambakkam, Chennai – 600 034.
(Cause Title amended vide Order dated 22.11.2022
made in W.M.P.No.28155 of 2022 in
W.P.No.23691 of 2022) ... Respondent
Writ Petition is filed under Article 226 of the Constitution of India, for
issuance of a Writ of Certiorarifed Mandamus, to call for the entire records
of the Respondent, contained in DIN and Document
No.ITBA/AST/S/91/2022-2023/1044250306(1) dated 28.07.2022, for the
Assessment Year 2016-2017 for PAN No.ADXPG8556H and to quash the
same as without jurisdiction, arbitrary, unjust, unlawful and consequently
forbear the Respondent or its superiors, subordinates, agents from re-
assessing the Petitioner's income for the Assessment Year 2016-2017 under
1/12
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W.P.No.23691 of 2022
Section 147 of the Income Tax Act, 1961.
For Petitioner : Mr.P.Giridharan
For Respondent : Mrs.S.Premalatha
Senior Standing Counsel
ORDER
This case was dismissed vide Order dated 04.11.2025. The operative
portion of the order was dictated in open Court. However, while finalizing
the detailed order, a doubt was entertained as to whether a correct conclusion
was arrived on 04.11.2025 or not.
2. After perusing the documents and the list of dates and events qua
Paragraph No.28 from the decision of the Hon’ble Supreme Court in Union
of India Vs. Ashish Agarwal, (2023) 1 SCC 617 and Paragraph Nos.112
and 114 from the decision of the Hon’ble Supreme Court in Union of India
Vs. Rajeev Bansal, 2024 SCC Online SC 2993, it has been necessary to
recall the order dated 04.11.2025.
3. For a fair disposal of the case, it will be therefore useful to refer to
passage from Paragraph No.28 from Ashish Agarwal case (cited supra) and
Paragraph Nos.112 and 114 from Rajeev Bansal case (cited supra).
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4. For the sake of clarity, Paragraph No.28 from Ashish Agarwal case
(cited supra) is reproduced below:-
“28. In view of the above and for the reasons stated above, the
present Appeals are allowed in part. The impugned common
judgments and orders passed by the High Court of Judicature at
Allahabad in W.T. No. 524/2021 and other allied tax
appeals/petitions, is/are hereby modified and substituted as
under:
(i) The impugned section 148 notices issued to the respective
assessees which were issued under unamended section 148 of
the IT Act, which were the subject matter of writ petitions before
the various respective High Courts shall be deemed to have been
issued under section 148A of the IT Act as substituted by the
Finance Act, 2021 and construed or treated to be show cause
notices in terms of section 148A(b). The assessing officer shall,
within thirty days from today provide to the respective assessees
information and material relied upon by the Revenue, so that
the assessees can reply to the show cause notices within two
weeks thereafter;
(ii) The requirement of conducting any enquiry, if required, with
the prior approval of specified authority under section 148A(a) is
hereby dispensed with as a onetime measure visàvis those notices
which have been issued under section 148 of the unamended Act
from 01.04.2021 till date, including those which have been
quashed by the High Courts. Even otherwise as observed
hereinabove holding any enquiry with the prior approval of
specified authority is not mandatory but it is for the concerned
Assessing Officers to hold any enquiry, if required;
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(iii) The assessing officers shall thereafter pass orders in terms
of section 148A(d) in respect of each of the concerned assessees;
Thereafter after following the procedure as required under
section 148A may issue notice under section 148 (as
substituted);
(iv) All defences which may be available to the assesses
including those available under section 149 of the IT Act and all
rights and contentions which may be available to the concerned
assessees and Revenue under the Finance Act, 2021 and in law
shall continue to be available.”
5. In Rajeev Bansal case (cited supra), the above decision of the Hon’ble
Supreme Court in Ashish Agarwal case (cited supra) was re-
examined. The Hon’ble Supreme Court framed the following questions of
law / issues in Paragraph No.18. Paragraph No.18 from Rajeev Bansal case
(cited supra) is reproduced below:-
“(a) Whether the Taxation and other Laws (Relaxation and
Amendment of Certain Provisions) Act, 2020 and
notifications issued under it will also apply to reassessment
notices issued after April 1, 2021; and
(b) Whether the reassessment notices issued under section
148 of the new regime between July and September 2022 are
valid.”
6. The above questions of law / issues have been answered in
Paragraph No.114 and illustrated in Paragraph No.112 of Rajeev Bansal
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case (cited supra).
7. For the sake of clarity, Paragraph Nos.112 and 114 from Rajeev
Bansal case (cited supra) are extracted hereunder:-
“112. Let us take the instance of a notice issued on May 1,
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 May 1, 2021. After
accounting for all the exclusions, the Assessing Officer will
have sixty-one days (days between May 1, 2021 and June 30,
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 June 18, 2022, the
Assessing Officer will have sixty one days from June 18,
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 August 18, 2022.
114. In view of the above discussion, we conclude that:
(a) After April 1, 2021, the Income Tax Act has to be
read along with the substituted provisions;
(b) Taxation and other Laws (Relaxation and
Amendment of Certain Provisions) Act, 2020 will
continue to apply to the Income-tax Act after April
1, 2021 if any action or proceeding specified
under the substituted provisions of the Income Tax
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Act falls for completion between March 20, 2020
and March 31, 2021;
(c) Section 3(1) of the Taxation and other Laws
(Relaxation and Amendment of Certain
Provisions) Act, 2020 overrides section 149 of the
Income-tax Act only to the extent of relaxing the
time limit for issuance of a reassessment notice
under section 148;
(d) Taxation and other Laws (Relaxation and
Amendment of Certain Provisions) Act, 2020 will
extend the time limit for the grant of sanction by
the authority specified under section 151. The test
to determine whether Taxation and other Laws
(Relaxation and Amendment of Certain
Provisions) Act, 2020 will apply to section 151 of
the new regime is this : if the time limit of three
years from the end of an assessment year falls
between March 20, 2020 and March 31, 2021,
then the specified authority under section 151(i)
has extended time till June 30, 2021 to grant
approval;
(e) In the case of section 151 of the old regime, the
test is : if the time limit of four years from the end
of an assessment year falls between March 20,
2020 and March 31, 2021, then the specified
authority under section 151(2) has extended time
till March 31, 2021 to grant approval;
(f) The directions in Union of India Vs. Ashish
Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC
617] will extend to all the ninety thousand
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reassessment notices issued under the old regime
during the period April 1, 2021 and June 30,
2021;
(g) The time during which the show- cause notices
were deemed to be stayed is from the date of
issuance of the deemed notice between April 1,
2021 and June 30, 2021 till the supply of relevant
information and material by the Assessing Officers
to the assessees in terms of the directions issued
by this court in Union of India Vs. Ashish Agarwal
[(2022) 444 ITR 1 (SC); (2023) 1 SCC 617], and
the period of two weeks allowed to the assessees to
respond to the show-cause notices; and
(h) The Assessing Officers were required to issue the
reassessment notice under section 148 of the new
regime within the time limit surviving under the
Income-tax Act read with the Taxation and other
Laws (Relaxation and Amendment of Certain
Provisions Act, 2020. All notices issued beyond the
surviving period are time barred and liable to be
set aside.”
8. Applying the above ratio, particularly, in the light of the limitation
for issuance of Notice under Section 148 of the Income Tax Act, 1961
(hereinafter referred to as ‘the Act’) prescribed under Section 149 of the Act
read with Section 151 of the Act, it is clear that the Notice that was issued
after 1st April, 2021 under the old regime as it stood till 31.03.2021 has to be
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treated as a Notice under Section 148A(b) of the Act under the new regime in
terms of Paragraph No.28.1 of Ashish Agarwal case (cited supra) and in
terms of Paragraph No.114(g) of Rajeev Bansal case (cited supra).
9. The time during which the aforesaid Notice issued under Section
148 of the Act under the old regime as it stood till 31.03.2021 were deemed
to be stayed from the date of issuance between April 1, 2021 and June 30,
2021 till the supply of relevant information and material by the Assessing
Officers to the assessees in terms of the directions issued by this Court in
Ashish Agarwal case (cited supra), and for a further period of two weeks
for the assessees to respond to the Show Cause Notices as confirmed by
Rajeev Bansal case (cited supra).
10. Relevant dates from the facts of the present case are as follows:-
Assessment Year 2016-2017
Notice / Event Date
Notice under Section 148 of the Act (old regime) 30.06.2021
Ashish Agarwal Case 04.05.2022
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Notice under Section 148A(b) of the Act 20.05.2022
Time granted to issue Notice under Section 148A(b) of 02.06.2022
the Act as per Ashish Agarwal Case (30 days)
Reply given by the Petitioner 03.06.2022
Order under Section 148A(d) of the Act (new regime) 28.07.2022
Notice under Section 148 of the Act (new regime) 28.07.2022
11. Applying the above ratio to the facts of the case it is clear that the
Notice that was issued on 30.06.2021 under Section 148 of the Act under the
old regime as it stood till 31.03.2021 has to be treated as a Notice issued
under Section 148A(b) of the Act in terms of Ashish Agarwal case (cited
supra) and Rajeev Bansal case (cited supra).
12. A Notice under Section 148 of the Act was required to be issued
for reassessment within the time limit surviving under the Taxation and
Other Laws (Relaxation and Amendment of Certain Provisions) [TOLA] Act,
2020. For the Assessment Year 2016-2017, since the income escaping
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assessment is less than Rs.50,00,000/-, the Notice under Section 148 of the
Act ought to have been issued on 31.03.2020. However, by virtue of TOLA
extensions, the said date has been extended up to 30.06.2021.
13. In the light of the ratio in Ashish Agarwal case (cited supra) and
Rajeev Bansal case (cited supra), the Notice issued under Section 148 of the
Act under the old regime on 30.06.2021 is deemed to have been stayed for
thirty days for the Income Tax Department to provide to the respective
assessees information and material relied upon and two weeks thereafter for
the assessees to reply to the Show Cause Notices.
14. In the present case, Notice under Section 148 of the Act under the
old regime itself was issued on the last date of limitation viz., 30.06.2021,
after the exclusions i.e., excluding the thirty days and fourteen days time
period granted by the Hon’ble Supreme Court in Ashish Agarwal case (cited
supra) there is no further time available for the Assessing Officer to issue
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Notice under Section 148 of the Act under the new regime barring the seven
days as provided under the fourth Proviso to Section 149 of the Act as
amended with effect from 01.04.2021. This is evident from the illustration in
Paragraph No.112 of Rajeev Bansal case (cited supra).
15. Therefore, after accounting for all the exclusions, the Assessing
Officer in the present case had no time left for issuance of Notice under
Section 148 of the Act under the new regime. However, applying the fourth
Proviso to Section 149 of the Act as amended with effect from 01.04.2021,
the Assessing Officer had seven days to issue a Notice under Section 148 of
the Act under the new regime.
16. Thus, the Notice under Section 148 of the Act ought to have been
issued within seven days from the date of reply given by the Petitioner on
03.06.2022. In other words, the Notice ought to have been issued on or
before 10.06.2022.
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17. However, in the present case, the Notice under Section 148 of the
Act under the new regime was issued only on 28.07.2022.
18. Thus, the proceedings initiated on 30.06.2021 which were later
substituted by a Notice under Section 148A(b) dated 20.05.2022 which
culminated in the impugned Order passed under Section 148A(d) dated
28.07.2022 and Notice issued under Section 148 dated 28.07.2022 are to be
held to be beyond time.
19. In view thereof, this Writ Petition challenging these two
proceedings deserve to be allowed and is accordingly allowed. No costs.
Connected Writ Miscellaneous Petitions are closed.
25.11.2025
Index : Yes/No
Neutral Citation : Yes/No
nvi
To
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Deputy Commissioner of Income Tax,
Non-Corporate Circle 3(1),
Aayakar Bhavan,
121, Mahatma Gandhi Road,
Nungambakkam, Chennai – 600 034.
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C.SARAVANAN, J.
nvi
and
W.M.P.Nos.22632 and 22634 of 2022
25.11.2025
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