Vineet Agrwal Vs ACIT (Karnataka High Court)
Karnataka High Court Quashes Reassessment Notices Issued Beyond ‘Surviving Time’ Post Ashish Agarwal
The Karnataka High Court allowed the writ petitions filed by Vineet Agrawal and Mohinder Pal Singh Swahney, quashing reassessment proceedings for AY 2014–15 on the ground of limitation. The Court held that the impugned orders under Section 148A(d) and consequent notices under Section 148, issued in July 2022, were time-barred, having been issued beyond the legally permissible “surviving time”.
The Court traced the statutory timeline following the Supreme Court’s decision in Union of India v. Ashish Agarwal, which deemed pre-01.04.2021 reassessment notices as show-cause notices under Section 148A(b) and required the Revenue to complete the reassessment process within the balance limitation period. Relying heavily on the Supreme Court’s subsequent ruling in Union of India v. Rajeev Bansal, the High Court reiterated that once the assessee’s reply is received, the Assessing Officer must issue the Section 148 notice within the remaining surviving time, after excluding periods mandated by law.
On facts, the Revenue had supplied information to the assessees in May 2022, replies were filed within time, but the Section 148A(d) orders and Section 148 notices were issued after the surviving limitation had expired. The Department was unable to controvert the dates or demonstrate compliance with the limitation framework laid down by the Supreme Court.
Accordingly, the Court held that the reassessment notices were hopelessly barred by limitation, quashed both the Section 148A(d) orders and Section 148 notices, and set aside all consequential proceedings. The judgment reinforces that post-Ashish Agarwal reassessments must strictly adhere to the “surviving time” doctrine, failing which the proceedings are liable to be struck down.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
