Union of India & Ors. Vs Rajeev Bansal (Supreme Court of India)
In Union of India & Ors. vs Rajeev Bansal, the Supreme Court clarified the application of the Taxation and Other Laws Act, 2020 (TOLA) in relation to reassessment proceedings under the Income Tax Act, 1961. The Court ruled that after 1 April 2021, the Income Tax Act must be read in conjunction with its substituted provisions. TOLA continues to apply if actions under the Income Tax Act’s substituted provisions are due for completion between 20 March 2020 and 31 March 2021. The Court emphasized that Section 3(1) of TOLA overrides Section 149 of the Income Tax Act only to extend the time limit for issuing reassessment notices under Section 148.
Additionally, TOLA extends the time for granting sanction under Section 151 in specific scenarios. If the three-year time limit from the end of an assessment year falls between 20 March 2020 and 31 March 2021, authorities under Section 151(i) have until 30 June 2021 to grant approval. Under Section 151(2) of the old regime, the four-year limit falling within this period extends the time for granting approval until 31 March 2021.
Furthermore, the Court’s directions in Ashish Agarwal apply to around 90,000 reassessment notices issued between 1 April 2021 and 30 June 2021. Notices were stayed during this period until assessing officers provided necessary information, and taxpayers had two weeks to respond. The Court also ruled that any reassessment notices issued beyond the surviving period under the Income Tax Act, as extended by TOLA, are time-barred and must be set aside.
