Case Law Details
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action rendered the challenge to the original March 31, 2021, notices infructuous, as the department had effectively superseded them with new proceedings based on the Apex Court’s directives.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.
Applying this binding judicial precedent, the Gujarat High Court observed that the notices in the present petitions, though some were dated March 31, 2021, were admittedly issued or served upon the petitioners after April 1, 2021. Furthermore, the subsequent notices under Section 148A(b), issued after the Ashish Agarwal decision, were admittedly issued after March 31, 2022. Consequently, on both grounds—the issuance date being on or after April 1, 2021, for AY 2015-16, and the subsequent notices being issued after March 31, 2022—the notices under Section 148 of the Act, dated July 27, 28, or 29, 2022, were deemed time-barred. Relying on the clear concession made by the Revenue before the Supreme Court, the High Court allowed the petitions and quashed the impugned notices, bringing relief to the assessees.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. Heard learned advocate Mr. B.S.Soparkar for the petitioner and learned Senior Standing Counsel Ms. Maithili Mehta and Mr. Varun K. Patel for the respondents in the respective petitions.
2. This group of petitions are filed challenging the notices issued under section 148 of the Income Tax Act, 1961 [for short ‘the Act’] for the Assessment Year 2015-16.
3. In Special Civil Application Nos. 3154 of 2022 and 4001 of 2022, notice dated 31.03.2021 issued by the respondent-Assessing Officer for A.Y. 2015-16 is under challenge.
4. It appears that the respondent-Assessing Officer, considering the issuance of notice dated 31.03.2021 being issued upon the petitioner-assessee on 01.04.2021 after the decision of the Hon’ble Apex Court in case of Union of India vs. Ashish Agarwal reported in (2022) 444 ITR 1 (SC), issued notice under section 148A(b) of the Act after 04.05.2022 (the date of the decision) and thereafter, passed an order under section 148A(d) along with notice under section 148 of the Act on 27/28/29.07.2022 in the respective
matters.
5. The petitioners have therefore, challenged such notices in Special Civil Application Nos. 21369/2022, 18099/2022, 17499/2022 and 17654/2022.
6. Thus, two sets of notices are under challenge so far as Special Civil Application Nos. 3154/2022 and 18099/2022 in case of Mayurkumar Babubhai Patel and in Special Civil Application Nos. 4001/2022 and 17499/2022 in case of Sujal Rajeshkumar Patel.
7. In view of the above facts, Special Civil Application Nos. 3154/2022 and 4001/2022 in case of Mayurbhai Babubhai Patel and Sujal Rajeshkumar Patel respectively would become infructuous in view of the notices being issued under section 148A(b) of the Act by the respondent-Assessing Officer. The challenge in these petitions would become infructuous in view of the fact that the respondent-Assessing Officer has issued the notice under section 148A(b) of the Act. Therefore, the notices challenged in Special Civil Application No. 3154/2022 and 4001/2022 are held to be infructuous and are accordingly quashed and set aside.
8. Therefore, we are left with the issue as to whether the notice issued under section 148A(b) of the Act by the respondent- Assessing Officer in remaining four petitions would survive in view of the decision of the Apex Court in case of Union of India vs. Rajeev Bansal reported in 469 ITR 46 SC or not?
9. Learned advocate Mr. B.S.Soparkar for the petitioner referred to and relied upon the subsequent order/decision of the Hon’ble Apex Court in case of Deepak Steel and Power Ltd vs. Central Board of Direct Taxes reported in [2025] 174 taxmann.com 144 (SC) wherein, the Hon’ble Apex Court, after recording the concession of the learned advocate for the department and in view of the concession given before the Apex Court by learned advocate appearing for the Revenue as recorded in para 19(f) of the judgement in case of Rajeev Bansal (supra), has quashed and set aside the notice issued after 31.03.2021 under section 148A(b) of the Act for A.Y. 201516 as under:
“1. Leave granted.
2. These appeals arise from the order passed by the High Court of Orissa at Cuttack in Writ Petition (C) Nos. 2446 of 2023, 2543 of 2023 dated 1.2.2023 and 2544 of 2023 dated 10.02.2023 respectively by which the High Court disposed of the original writ petitions in the following terms:-
“1. The memo of appearance filed by Mr. S. S. Mohapatra, learned Senior Standing Counsel for Revenue Department on behalf of Opposite Parties is taken on record.
2. In view of the order passed by this Court on 1st December, 2022 in a batch of writ petitions of which W.P.(C) No.9191 of 2022 (Kailash Kedia v. Income Tax Officer) was a lead matter and the subsequent order dated 10th January, 2023 passed in W.P.(C) No.36314 of 2022 (Shiv Mettalicks Pvt. Ltd., Rourkela v. Principal Commissioner of Income Tax, Sambalpur), the Court declines to entertain the present writ petition, but leaves it open to the Petitioner to raise all grounds available to the Petitioner in accordance with law 17:51:47 IST Reason: including the grounds urged in the present petition at the appropriate stage as explained by the Court in those orders.
3. The writ petition is disposed of in the above terms.”
3. We heard Mr. Saswat Kumar Acharya, the learned counsel appearing for the appellants(assessee) and Mr. Chandrashekhar, the learned counsel appearing for the revenue.
4. The learned counsel appearing for the revenue with his usual fairness invited the attention of this Court to a three judge bench decision of this Court in Union of India and Ors. v. Rajeev Bansal, reported in 2024 SCC OnLine SC 2693, more particularly, paragraph 19(f) which reads thus:-
“19. (f) The Revenue concedes 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.”
5. As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, all notices issued on or after 1st April, 2021 will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provisions Act, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021.
6. In view of the aforesaid, in such circumstances referred to above the original writ petition nos.2446 of 2023, 2543 of 2023 and 2544 of 2023 respectively filed before the High Court of Orissa at cuttack stands allowed.
7. The impugned notice therein stands quashed and set aside.
8. The relief in terms of prayer (a) is granted.
9. The appeals stand disposed of in the above terms.
10. Pending application(s), if any, stand disposed of.
10. Similar orders are also passed by the Apex Court in the following cases:
- Assistant Commissioner of Income Tax, Circle 19(1) and ors vs. Nehal Ashit Shah in Special Leave Petition (Civil) Diary No. 57209/2024;
- The Income Tax Officer Ward 1(2) Jaipur vs. R.K.Build Creations Private Limited in Special Leave Petition (Civil) Diary No. 59625/2024.
11. The Delhi High Court has also passed the similar order in following cases:
- Bhagwan Sahai Sharma Deputy Commissioner of Income Tax reported in [2025] 174 taxmann.com 14 (Delhi)
- Lalit Gulati vs. Assistant Commissioner of Income Tax reported in [2025] 174 com 273 (Delhi);
12. The Punjab and Haryana High Court has taken similar decision in following case:
13. Rajasthan High Court has taken similar decision in following case:
14. Karnataka High Court has taken similar decision in following case:-
15. Considering the facts of the case, it is not in dispute that the respondent-Assessing Officer has issued the notice under section 148A(b) of the Act after the period of six years were over on 31.03.2022. As observed by the Hon’ble Apex Court in case of Deepak Steel and Power Ltd(Supra) and in view of the concession made by the Revenue before the Apex Court for the Assessment Year 201516, all the notices issued on or after 01.04.2021 will have to be dropped as they would not fall for completion during the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and therefore, nothing further is required to be adjudicated in the matters as the notice so far as the present petitions are concerned, though dated 31.03.2021, admittedly have been issued after 01.04.2021.
16. It is also not in dispute that the notices under section 148A(b) have been issued pursuant to the decision of the Hon’ble Apex Court in Ashish Agarwal (supra) dated 04.05.2022 admittedly after 31.03.2022. Therefore, on both counts, the notices issued under section 148 of the Act dated 27/28/29.07.2022 would be time barred.
17. In view of the above, the petitions succeed and are accordingly allowed. Impugned notices issued under section 148 of the Act in Special Civil Application Nos. 21369/2022, 18099/2022, 17499/2022, 17654/2022 are hereby quashed and set aside. The petitions are accordingly disposed of.
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