Prolife Industries Limited Vs ITO (Gujarat High Court)
Conclusion: Since the last date, or the “surviving time,” for issuing a valid notice under Section 148 for this specific case was June 17, 2022 and the actual notice was issued on August 24, 2022, it was clearly barred by limitation.
Held: AO issued a notice under section 148 for AY 2014–15, invoking the extended limitation period under TOLA, 2020. In light of the Supreme Court’s ruling in Union of India v. Ashish Agarwal (2022) 444 ITR 1 (SC), such notices issued between 01.04.2021 and 30.06.2021 were deemed as notices under section 148A(b). Subsequently, in Union of India v. Rajeev Bansal (2024) 469 ITR 46 (SC), the Supreme Court clarified that the validity of such notices depends on the “surviving time” between the original notice (under TOLA) and 30.06.2021. This principle was followed by the Gujarat High Court in Dhanraj Govindram Kella v. ITO (SCA No. 6387 of 2023, decided on 08.07.2025), which held that notices beyond the “surviving time” would be invalid. The core of the dispute was the calculation of the final deadline for issuing this notice. This calculation involved a complex interplay between the original time limits, the extensions granted by the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (TOLA), and the specific methodology laid down by the Supreme Court in the Rajeev Bansal case. It was held that after applying the calculation methodology mandated by the Supreme Court, the court determined that the last date, or the “surviving time,” for issuing a valid notice under Section 148 for this specific case was June 17, 2022. Since the actual notice was issued on August 24, 2022, it was clearly barred by limitation. The time-barred notice was declared invalid and was consequently quashed, rendering the entire reassessment proceeding void.
