Polypeptide Laboratories Pvt. Ltd. Vs ACIT (Bombay High Court)
The Bombay High Court allowed a writ petition challenging the notice dated 29.07.2022 issued under Section 148 of the Income-tax Act, 1961, and the order dated 28.07.2022 passed under Section 148A(d) for Assessment Year 2015-16.
The petitioner sought quashing of the reassessment proceedings initiated under Articles 226 and 227 of the Constitution of India.
The Court noted that the Revenue had initially issued a notice under Section 148 dated 05.04.2021 for AY 2015-16. Following the Supreme Court’s decision in Union of India vs. Ashish Agarwal (2022) 138 taxmann.com 64 (SC), notices issued between 01.04.2021 and 30.06.2021 were to be treated as show cause notices under Section 148A(b). Accordingly, the notice dated 05.04.2021 was treated as a notice under Section 148A(b), after which an order under Section 148A(d) was passed on 28.07.2022, followed by a fresh notice under Section 148 dated 29.07.2022.
The High Court observed that the issue of limitation had subsequently been considered by the Supreme Court in Union of India vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC). Referring to paragraph 19 of that judgment, the Court noted the Revenue’s concession before the Supreme Court that, for Assessment Year 2015-16, all notices issued on or after 01.04.2021 would have to be dropped as they would not fall for completion within the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA).
In light of that concession, the High Court held that the reassessment proceedings pertaining to AY 2015-16 were clearly time-barred.
Accordingly, the Court allowed the writ petition, quashed the notice issued under Section 148 dated 29.07.2022 and the order passed under Section 148A(d) dated 28.07.2022 sustaining the reassessment proceedings, made the rule absolute, and disposed of the writ petition. No order as to costs was passed.
Cases Discussed
- Union of India vs. Rajeev Bansal (Supreme Court), [2024] 167 taxmann.com 70 (SC)
- Union of India vs. Ashish Agarwal (Supreme Court), (2022) 138 taxmann.com 64 (SC)
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. In the above Writ Petition, Rule was issued on 22nd April 2025 and the same was made returnable peremptorily on 30th June 2025, at 2.3o p.m., subject to overnight part heard matters. It appears that due to paucity of time, the matter had not reached and has finally come up for final hearing today.
2. The above Writ Petition is filed seeking an appropriate order or direction under Article 226 and / or 227 of the Constitution of India calling for the records of the Petitioner’s case and after examining the legality and validity thereof, to quash and set aside the Notice issued under Section 148 of the Income Tax Act, 1961, dated 29th July 2022, as well as the Order passed under Section 148A(d) of the Act dated 28th July
3. The brief facts to be noted in the present Writ Petition are that initially, the Revenue had issued a Notice under Section 148, dated 5th April 2021, for Assessment Year 2015-16. After the decision of the Hon’ble Supreme Court in the case of Union of India vs. Ashish Agarwal (2022) 138 com 64 (SC), the Notices issued after 1st April 2021 and upto 3oth June 2021 were to be treated as Show Cause Notices under Section 148A(b) of the Act. Accordingly, the Notice dated 5th April 2021 was treated as a Show Cause Notice under Section 148A(b) and thereafter the Order dated 28th July 2022 was passed under Section 148A(d). Once the order under Section 148A(d) was passed, a fresh Notice was issued on 29th July 2022.
4. The issue of limitation of these Notices was the subject matter of another decision of the Supreme Court in the case of Union of India vs. Rajeev Bansal [2024] 167 com 70 (SC). In this decision, and more particularly paragraph 19 thereof, the Revenue conceded that for Assessment Year 2015-16, Notices issued on or after 1st April 2021 will have to be dropped as they will not fall for completion during the period prescribed under The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA). The relevant portion of the decision in Rajeev Bansal (Supra) reads thus:
“19. Mr N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue:
a. …………
b. ………..
c. …………
d. …………
e. …………..
f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA.”
5. In the light of the concession made by the Revenue before the Hon’ble Supreme Court in Rajeev Bansal (Supra), we find that the reassessment proceedings in the present case, pertaining to Assessment Year 2015-16, are clearly time barred.
6. In these circumstances, the above Writ Petition is allowed in terms of prayer clause (i) which reads thus:
“i. This Hon’ble Court be pleased to issue a Writ of Certiorari or a writ in the nature of Certiorari or any other appropriate writ, order or direction under Article 226 and/or 227 of the Constitution of India calling for the records of the Petitioner’s case and after examining the legality and validity thereof quash and set-aside the notice issued u/s. 148 of the Act dated 29.07.2022 and Order passed u/s. 148A(d) of the Act dated 28.07.2022 and sustaining the reassessment proceedings; “
7. Rule is made absolute in the aforesaid terms and the Writ Petition is also disposed of in terms thereof.
8. However, there shall be no order as to costs.
9. 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.
