Mohmedmunaf Noormohmed Cambaywala Vs ITO (Gujarat High Court)
Summary: The Gujarat High Court considered a writ petition arising from reassessment proceedings initiated by the Income Tax Department in respect of the petitioner. The proceedings involved notices issued under Section 148 of the Income-tax Act, 1961 under the regime operative prior to 01.04.2021, followed by notices under Section 148A(b) under the amended regime that came into force from 01.04.2021. A subsequent order under Sections 147, 250 and 144B was passed on 21.03.2026. The writ petition was considered by the Division Bench comprising Justice A.S. Supehia and Justice Pranav Trivedi, and judgment was pronounced on 29.04.2026.
The petitioner demonstrated before the Court that the issue concerning notices issued under Section 148 prior to 01.04.2021 and notices under Section 148A(b) introduced by the Finance Act, 2021 with effect from 01.04.2021 had been considered by the Supreme Court in Union of India and others Vs. Rajeev Bansal, reported in 2024 SCC OnLine SC 2693.
The judgment records that, for Assessment Year 2015-16, the Revenue had conceded before the Supreme Court that notices issued on or after 01.04.2021 would have to be dropped because they would not fall within the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA). The Revenue’s submission before the Supreme Court was that, under the amended regime involving Section 148A(b), notices could have been issued only up to 31.03.2022, and that the notices issued in the matter were consequently time-barred. The High Court recorded that the subsequent proceedings, including the order passed under Section 147 read with Sections 250 and 144B dated 21.03.2026, were consequently bad in law.
The High Court noted that the legal position placed before it could not be disputed by the learned Senior Standing Counsel appearing for the Revenue. Since the issue was squarely covered by the Supreme Court’s decision in Rajeev Bansal and by various decisions of the Gujarat High Court, the Court held that the notices challenged in the writ petition and all consequential proceedings were liable to be quashed.
Accordingly, the Gujarat High Court quashed all the notices forming the subject matter of the writ petition as well as all consequential proceedings, including the reassessment order. The writ petition was allowed in terms of the Supreme Court’s decision in Rajeev Bansal and the Rule was made absolute to that extent.
Cases Discussed
- Union of India and others Vs. Rajeev Bansal, 2024 SCC OnLine SC 2693 — followed on the issue concerning the validity and limitation of reassessment notices issued under the pre-01.04.2021 and amended reassessment regimes, including the effect of TOLA.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. Rule. Learned Senior Standing Counsel Mr. Karan Sanghani waives service of notice of rule on behalf of the respondents.
2. Having heard learned Counsels for the parties and perused the record, pertinent is to note that the captioned writ petition is arising out of the proceedings initiated by the Income Tax Department by invoking the provisions of Section 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’ for short), operative prior to 01.04.2021. The subsequent notices are issued by invoking Section 148A(b) of the amended Act, which came into force with effect from 01.04.2021. Subsequently, the order under Section 147 read with Section 250 read with Section 144B of the Act has been passed on 21.03.2026.
3. It is demonstrated before us that the issue pertaining to the notices invoking section 148 of the Act (prior to 01.04.2021) and Section 148A(b) of the Act, amended by the Finance Act, 2021 with effect from 01.04.2021, came up for consideration before the Apex Court in case of Union of India and others Vs. Rajeev Bansal reported in 2024 SCC OnLine SC 2693.
4. For the Assessment Year 2015-2016, the Revenue conceded before the Apex Court that all the notices issued on or after 01.04.2021 will have to be dropped as they will not fall during the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (for short “the TOLA”). The submission was that as per the amended provisions in terms of Section 148A(b) of the Act, the Revenue could have issued notices only upto 31.03.2022, i.e. under the new regime, the notices issued by the Revenue are also time barred. Consequently, the subsequent proceedings including the order passed under Section 147 read with Section 250 read with Section 144B of the Act, dated 21.03.2026, is also bad in law.
5. Heard both the sides. The position of law placed before us could not be disputed by the learned Senior Standing Counsel appearing for the respondent – Revenue. Since the issue is squarely covered by the decision of Apex Court in case of Rajeev Bansal (supra) as well as by various decisions of this court, we, therefore, quash all the notices, subject matter of challenge in the captioned writ petition and all consequential proceedings including the reassessment order passed as above. Hence, the writ petition stands allowed in terms of the decision of the Apex Court in case of Rajeev Bansal (Supra). Rule is made absolute to the aforesaid extent.
