Mayurkumar Babubhai Patel Vs ACIT (Gujarat High Court)
Gujarat High Court Quashes Income Tax Reassessment Notices for AY 2015-16
The Gujarat High Court, in the case of Mayurkumar Babubhai Patel Vs. ACIT and allied petitions, has quashed notices issued under Section 148 of the Income Tax Act, 1961, for the Assessment Year (AY) 2015-16. The core of the challenge revolved around the timeline of these reassessment notices, particularly in light of pronouncements by the Supreme Court. The petitions specifically contested two sets of notices: initial notices dated March 31, 2021, and subsequent notices issued under Section 148A(b) after May 4, 2022.
Initially, notices dated March 31, 2021, were issued to the assessees. However, following the Supreme Court’s decision in Union of India vs. Ashish Agarwal [(2022) 444 ITR 1 (SC)], which provided clarity on the validity of reassessment notices post the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, the Assessing Officer issued fresh notices under Section 148A(b) of the Act after May 4, 2022. This action rendered the challenge to the original March 31, 2021, notices infructuous, as the department had effectively superseded them with new proceedings based on the Apex Court’s directives.
The crucial aspect of the High Court’s decision hinged on a subsequent Supreme Court ruling in Deepak Steel and Power Ltd vs. Central Board of Direct Taxes [[2025] 174 taxmann.com 144 (SC)]. In this case, the Supreme Court explicitly noted a concession made by the Revenue during the proceedings of Union of India vs. Rajeev Bansal [469 ITR 46 SC]. The concession, recorded in paragraph 19(f) of the Rajeev Bansal judgment, stated that “for the assessment year 2015-2016, all notices issued on or after April 1, 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.” Based on this acknowledgment by the Revenue, the Supreme Court in Deepak Steel and Power Ltd proceeded to quash the impugned notices that were dated after April 1, 2021, for AY 2015-16.
