ITAT Rajkot Quashes Time-Barred Reassessment Notice on Surviving Limitation

Bapa Sitaram Coal Vs ITO (ITAT Rajkot)

Only Two Days Survived on the Limitation Clock; Revenue Could Not Take an Extra Month: Reassessment & ₹51.29 Lakh Addition Quashed

The Rajkot ITAT has quashed reassessment proceedings for AY 2017-18 because the consequential notice u/s 148 issued under the new reassessment regime was beyond the surviving period of limitation available to the Revenue after giving effect to the Supreme Court decisions in Union of India v. Ashish Agarwal and Union of India v. Rajeev Bansal.

The original notice under the old reassessment regime was issued on 29.06.2021. Since the extended limitation under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 expired on 30.06.2021, only two days remained on the limitation clock. After applying the permissible exclusions under the Supreme Court’s directions, the consequential notice was required to be issued by 11.06.2022. The notice was actually issued on 12.07.2022 and was therefore time-barred.

The assessee, Bapa Sitaram Coal, filed its return for AY 2017-18 declaring a total income of ₹18,16,310. The AO subsequently received information from the Investigation Wing at Surat alleging that the assessee had made cumulative cash payments of ₹51,29,000 to Shree Padmavati Tradelink, a proprietary concern of Shri Niranjan Rameshchandra Laheru, towards the purchase of coal.

Since the alleged cash transactions were not commensurate with the particulars disclosed in the assessee’s return, reassessment proceedings were initiated. The old-regime notice u/s 148 was issued on 29.06.2021 during the extended TOLA period.

Following the Supreme Court decision in Ashish Agarwal [2022] 444 ITR 1 (SC), that notice was treated as a deemed show-cause notice u/s 148A(b) under the new reassessment regime. The relevant information was furnished to the assessee on 21.05.2022, the order u/s 148A(d) was passed on 10.07.2022, and the consequential notice u/s 148 was issued on 12.07.2022.

During the reassessment proceedings, the assessee denied having entered into any transaction with Shree Padmavati Tradelink during FYs 2015-16 or 2016-17. It explained that its business commenced only on 16.08.2016 and that no ledger account of the alleged supplier existed because no transaction had taken place with that party.

The AO rejected the explanation. According to him, the assessee had failed to substantiate its version concerning purchases, return of goods or sales through corroborative evidence. He treated the alleged cash payment of ₹51.29 lakh as unexplained expenditure u/s 69C, applied Section 115BBE and completed the assessment u/s 147 read with Section 144B. The CIT(A) confirmed the addition.

Before the Tribunal, the assessee challenged the reopening on the ground of limitation. It contended that the old notice having been issued on 29.06.2021, only two days survived between that date and 30.06.2021. The consequential notice under the new regime was required to be issued within that surviving time after allowing only the exclusions authorised by law. On the assessee’s computation, the final date was 11.06.2022, whereas the notice was issued on 12.07.2022.

Reliance was placed upon Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70, wherein the Supreme Court explained the effect of the legal fiction created by Ashish Agarwal.

In Rajeev Bansal, the Supreme Court held that the legal fiction stopped the limitation clock on the date on which the old-regime notice was issued. The period between the deemed notice and the supply of information to the assessee was required to be excluded. The time granted to the assessee for responding to the notice was also excludable. Once those exclusions ended, the limitation clock restarted, and the AO was required to complete the remaining procedure within the balance or surviving period.

The surviving period is computed by counting the number of days between the date of the old-regime notice and 30.06.2021. Therefore, an old notice issued on 29.06.2021 carried only two days of remaining life. The directions in Ashish Agarwal did not create an entirely fresh limitation period for the Department.

The Tribunal also relied upon the jurisdictional Gujarat High Court decision in Dhanraj Govindram Kella [2025] 177 taxmann.com 194 (Gujarat). The High Court held that each reassessment notice must be separately tested by examining the date of the old TOLA notice, the date of supply of information, the time allowed for objections, the date of the order u/s 148A(d) & the date of the consequential notice u/s 148.

Where the consequential notice was issued beyond the surviving period calculated in accordance with Rajeev Bansal, the notice was invalid and all subsequent proceedings were liable to be quashed.

Applying these principles, the ITAT held that the notice issued on 12.07.2022 was beyond the permissible surviving period. The issue was squarely covered by the Supreme Court and the jurisdictional Gujarat High Court. The reassessment proceedings were consequently quashed.

Since the reassessment failed at the jurisdictional stage, the Tribunal did not adjudicate the merits of the addition, including the assessee’s contentions that the addition was based solely on an unverified third-party statement, no opportunity of cross-examination was granted, no evidence established the receipt of cash by the assessee, and the addition could result in duplication because the goods had allegedly been returned. These issues were treated as academic.

The appeal was accordingly allowed and the addition of ₹51.29 lakh u/s 69C read with Section 115BBE ceased to survive.

Author’s Comment

The ruling demonstrates that Ashish Agarwal saved the old reassessment notices only through a carefully constructed legal fiction. It did not provide the Department with an unlimited fresh period to complete the procedure under Sections 148A & 148.

The date of the original TOLA notice is crucial. A notice issued near the end of the extended period carries only the few days remaining up to 30.06.2021. Permissible statutory exclusions may pause the clock, but they cannot refill it.

The Gujarat High Court ruling in Dhanraj Govindram Kella also draws an important distinction. For AYs such as 2017-18, approval under Section 151(i) may remain valid because the consequential notice traces its genesis to the TOLA notice. Nevertheless, the notice must still satisfy the separate test of surviving limitation. Thus, a notice may possess valid sanction and yet remain invalid because it was issued too late.

The principle is best stated in one sentence: Ashish Agarwal stopped the limitation clock; it did not replace a clock with only two days remaining by a brand-new one.

Cases Discussed

• Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70
• Union of India Vs Ashish Agarwal [2022] 444 ITR 1 (SC)
• Dhanraj Govindram Kella Vs ITO [2025] 177 taxmann.com 194 (Gujarat)

FULL TEXT OF THE JUDGMENT/ORDER OF ITAT RAJKOT

1. Aforesaid appeal filed by the assessee, pertaining to Assessment Year (AY) 2017-18, is directed against the order passed under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by Commissioner of Income-tax (Appeals), dated 25.02.2026, which in turn arises out of an assessment order passed by the Assessing Officer u/s 147 r.w.s. 144B of the Act, on 25.05.2023.

2. The grounds of appeal raised by the assessee are as follows:

1. On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in initiating re-assessment proceedings u/s 148 of the Act.

2. On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in upholding the validity of the reassessment proceedings, without appreciating that the reopening was initiated merely on the basis of suspicion and uncorroborated third-party statements, thereby rendering the reassessment order void ab initio.

3. On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in sustaining the addition of Rs. 51,29,000/- as unexplained expenditure u/s 69C r.w.s 115BBE of the Act.

4. On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in relying upon the statement of a third party without affording the assessee an opportunity of cross-examination, thereby violating the principles of natural justice.

5. On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in holding that receipts of a third person constitute the sales of the assessee, without bringing any cogent material or credible evidence on record to substantiate such a finding.

6. On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in confirming the addition based solely on the unverified statement of Shri Niranjan Rameshchandra Laheru, without any independent evidence, ignoring that no material exists to prove cash receipt by the assessee and that the said person was merely attempting to shift his own tax liability.

7. On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in not considering that the assessee has already returned the goods and hence, the addition of same amount will result in double addition.

8. On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in confirming invocation of section 115BBE of the Act.

9. On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in sustaining the initiating penalty proceedings u/s 271AAC (1) of the Act.

10. It is prayed that the addition made by the Assessing Officer may kindly be deleted in full, having due regard to the facts of the case and the settled position of law.

11. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.

3. The relevant material facts, as culled out from the material on record, are as follows. The assessee e-filed return of his income for assessment year (A.Y.) 2017-18 on 07.11.2017, declaring therein total income of Rs. 18,16,310/-. Thereafter, AO was in receipt of credible information from O/o the ADIT (Inv.), Unit-4, Surat to the effect that during the previous year corresponding to assessment year 2017-18, the assessee has made cumulative cash payment of Rs. 51,29,000/-, to Shree Padmavati Tradelink, Prop. Concern of Shri Niranjan Rameshchandra Laheru (PAN:- ACFPL4608L) (i.e. the seller) against purchase of coal. However, particulars of return of the assessee do not commensurate with the transaction carried out by him in cash with the seller. Therefore,the case was reopened by issue of notice u/s 148 of the Act on 12.07.2022 after following due procedure as per the Act. The assessee, vide notice under section 142(1) of the Income-tax Act, 1961, was asked to furnish various details viz. details of transactions entered with Shree Padmavati Trade Link Prop. Shri Niranjan Rameshchandra Laheru and nature of the transactions entered.

4. In response, assessee submitted it’s reply. However, assessing officer issued again notice to the assessee to explain the transaction. In response, assessee submitted it’s written submission before the assessing officer which are reproduced below:

“The assessee has denied any transactions during the F.Y.2016-17 with Shree Padmavati Tradelink, Prop. Shri Niranjan Rameshchandra Laheru”.With reference to the captioned subject, I MILAN MANSHUKHBHAI ERANIYA partner of BAPA SITARAM COAL humbly submit my reply as under: 1. Non submission of cash book for F.Y. 2015-16. We have already mentioned in our previous reply submission dated 22.04.2023 that we have started our business from 16/08/2016 (as per PAN card date) so we do not made any transaction in F.Y. 2015-16, business itself not started so not any cash transaction as well as financial transaction made during the F.Y. 2015-16 so, cash book of F.Y. 2015-16 is not require to prepared. 2. Non submission of ledger of Shree Padmavati Tradelink, Prop. Shri Niranjan Rameshchandra Laheru – We do not have any transaction with the above mentioned person in FY 2015-16 or FY 2016-17 hence, we have not submitted ledger of the same.”

5. However, assessing officer rejected the contention of the assessee and noted that assessee has not been able to prove with corroborative evidence his claim of purchase, sale/return and are not just insufficient but also defy the facts, logic and business prudence. In view of the above, the assessing officer made addition of the cumulative amount of Rs. 51,29,000/-, as unexplained expenditure u/s.69C r.w.s. 115BBE of the Act.

6. Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before the Ld. CIT(A), who has confirmed the action of the assessing officer, therefore, assessee is in further appeal before the Tribunal.

7. Learned Counsel for the assessee, argued that assessee’s case is covered by the judgment of the Hon’ble Supreme Court in the case of Union of India v. Rajeev Bansal, [2024] 167taxmann.com 70/301, as the notice under section 148 of the Act was not issued within surviving period, and notice u/s 148 is barred by limitation. The ld.Counsel submitted that date of notice under section 148 under TOLA was 29.06.2021, therefore, number of days of surviving time available till 30th June 2021, is 2 days. The date of providing information under section 148A(b) of the Act was 21.05.2022. The date of order, under section 148A(d) of the Act was 10.07.2022. The date of final notice under section 148 of the Act is 12.07.2022. However, the said final notice should have been issued on or before 11.06.2022, hence, notice under section 148 of the Act, is clearly barred by limitation, therefore, assessment order should be quashed, for this ld.Counsel for the assessee, relied on the judgment of the Hon’ble Supreme Court in the case of Union of India v. Rajeev Bansal (supra), wherein it was held as follows:

“108. The Income-tax Act read with TOLA extended the time limit for issuing reassessment notices under section 148, which fell for completion from 20 March 2020 to 31 March 2021, till 30 June 2021. All the reassessment notices under challenge in the present appeals were issued from 1 April 2021 to 30 June 2021 under the old regime. Ashish Agarwal (supra) deemed these reassessment notices under the old regime as show cause notices under the new regime with effect from the date of issuance of the reassessment notices. The effect of creating the legal fiction is that this Court has to imagine as real all the consequences and incidents that will inevitably flow from the fiction. East End Dwellings Co. Ltd. v. Finsbury Borough Council [1952] AC 109. [Lord Asquith, in his concurring opinion, observed: “If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it.”] Therefore, the logical effect of the creation of the legal fiction by Ashish Agarwal (supra) is that the time surviving under the Income-tax Act read with TOLA will be available to the Revenue to complete the remaining proceedings in furtherance of the deemed notices, including issuance of reassessment notices under section 148 of the new regime. The surviving or balance time limit can be calculated by computing the number of days between the date of issuance of the deemed notice and 30 June 2021.

109. If this Court had not created the legal fiction and the original reassessment notices were validly issued according to the provisions of the new regime, the notices under section 148 of the new regime would have to be issued within the time limits extended by TOLA. As a corollary, the reassessment notices to be issued in pursuance of the deemed notices must also be within the time limit surviving under the Income-tax Act read with TOLA. This construction gives full effect to the legal fiction created in Ashish Agarwal (supra) and enables both the assesses and the Revenue to obtain the benefit of all consequences flowing from the fiction. See State of A P v. A P Pensioners Association [2005] 13 SCC 161. [This Court observed that the “legal fiction undoubtedly is to be construed in such a manner so as to enable a person, for whose benefit such legal fiction has been created, to obtain all consequences flowing therefrom.”]

110. The effect of the creation of the legal fiction in Ashish Agarwal (supra) was that it stopped the clock of limitation with effect from the date of issuance of Section 148 notices under the old regime [which is also the date of issuance of the deemed notices]. As discussed in the preceding segments of this judgment, the period from the date of the issuance of the deemed notices till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra) has to be excluded from the computation of the period of limitation. Moreover, the period of two weeks granted to the assesses to reply to the show cause notices must also be excluded in terms of the third proviso to Section 149.

111. The clock started ticking for the Revenue only after it received the response of the assessee to the show causes notices. After the receipt of the reply, the assessing officer had to perform the following responsibilities: (i) consider the reply of the assessee under section 149A(c); (ii) take a decision under section 149A(d) based on the available material and the reply of the assessee; and (iii) issue a notice under section 148 if it was a fit case for reassessment. Once the clock started ticking, the assessing officer was required to complete these procedures within the surviving time limit. The surviving time limit, as prescribed under the Income-tax Act read with TOLA, was available to the assessing officers to issue the reassessment notices under section 148 of the new regime.

112. Let us take the instance of a notice issued on 1 May 2021 under the old regime for a relevant assessment year. Because of the legal fiction, the deemed show cause notices will also come into effect from 1 May 2021. After accounting for all the exclusions, the assessing officer will have sixty-one days [days between 1 May 2021 and 30 June 2021] to issue a notice under section 148 of the new regime. This time starts ticking for the assessing officer after receiving the response of the assessee. In this instance, if the assessee submits the response on 18 June 2022, the assessing officer will have sixty-one days from 18 June 2022 to issue a reassessment notice under section 148 of the new regime. Thus, in this illustration, the time limit for issuance of a notice under section 148 of the new regime will end on 18 August 2022.

8. On the other hand, the Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity.

9. We have carefully considered the facts of the case, the submission of the Learned Counsel for the assessee and Ld. DR for the Revenue and evidences on record. A chart showing the surviving period as per the judgment of the Hon’ble Supreme Court in the case of Union of India v. Rajeev Bansal (supra), is reproduced below:

SUMMARY CHART

From the above chart, we note that notice under section 148 of the Act, under TOLA was issued on 29.06.2021, therefore, number of days of surviving time available till 30th June 2021, is 2 days. The date of providing information under section 148A(b) of the Act was 21.05.2022. The date of order, under section 148A(d) of the Act was 10.07.2022. The date of final notice under section 148 of the Act is 12.07.2022. However, the said final notice should have been issued on or before 11.06.2022, hence, notice under section 148 of the Act, is clearly barred by limitation, and the issue therefore, is covered in favour of the assessee, by the judgment of the Hon’ble Supreme Court in the case of Union of India v. Rajeev Bansal (supra).

10. The same view was upheld by the Hon’ble jurisdictional High Court of Gujarat, in the case of Dhanraj Govindram Kella [2025] 177 taxmann.com 194 (Gujarat), where it was held that where impugned notices under section 148 for Assessment years 2013-14, 2014-15, 2016-17 and 2017-18 were issued beyond period of ‘surviving time’ as per direction of Supreme Court in Union of India v. Rajeev Bansal [2024] 167taxmann.com 70/301, such notices would be invalid. The detailed findings of the Hon’ble court are reproduced below:

“59. Having heard the learned advocates for the respective parties and having considered the rival submissions and on perusal of decisions in cases of Ashish Agarwal (supra) and Rajeev Bansal (supra) of the Hon’ble Apex Court, short questions which arise for consideration is (i) whether the approval granted by the Principal Commissioner of Income Tax for passing of order under section 148A(d) and issuance of notice under section 148 under the new regime is valid or not considering the provision of section 151 which has been amended with effect from 1st April, 2021 and(ii) whether notice issued under section 148 of the Act would be time barred and invalid or not.

60. In order to answer the above issues, it would be germane to summarise the undisputed facts emerging from the record.

1) For Assessment Years 2013-2014 to 2017-2018 admittedly notices under section 148 was issued after 1st April, 2021 by respondent authority by taking recourse to the provisions of TOLA.

2) With effect from 1st April, 2021 the entire procedure for issuance of reassessment notice under section 148 has undergone a change by replacing the old procedure under sections 147 to 151 by new procedure under section 147 to 151 including the insertion provision of section 148A providing an opportunity of hearing to the petitioners in consonance with the decision of the Hon’ble Apex Court in case of GKN Driveshafts India Ltd. v. ITO reported in [2002] 125 Taxman 963/259 ITR 19 (SC).

3) The Hon’ble Apex Court in case of Ashish Agarwal (supra) has come to the conclusion that notices issued under TOLA under provision of section 148 of old regime would be an invalid notice and therefore, by exercise of jurisdiction under Article 142 of the Constitution of India, and in order to save 90,0000 such notices issued by the Revenue, the Hon’ble Apex Court directed to consider such notices as notices issued under section 148A(b) of the Act under new regime with further direction to provide necessary information within 30 days from the date of decision i.e. 04.05.2022 to the respective assessees so as to enable them to file objections as provided under the section 148A(b) of the Act and thereafter directed the Revenue to pass order under section 148A(d) and issue notice under section 148 of the Act under the new regime.

4) The Hon’ble Apex Court at the time of issuance of directions also directed that such issuance of notices shall be governed by the time limit prescribed in section 149(1) which has been amended with effect from 1st April, 2021 under the new regime.

5) Therefore, assessee raised objections that such notice issued under section 148 of the Act pursuant to the directions issued by Hon’ble Apex Court in case of Ashish Agarwal (supra) would be time barred and such notices also would be without valid approval of the specified authority as per provision of section 151 which has been amended with effect from 1st April, 2021 under the new regime.

6) On challenge to such notices, various High Courts have held that such notices would be time barred considering the same being hit by the provisions of section 149 of the Act under the new regime and some of the High Courts also held that notices were invalid for want of approval by the specified authority as required under section 151(ii) of Act under the new regime, as such notices were admittedly issued beyond the period of three years from the end of relevant assessment year.

7) The Hon’ble Apex Court was therefore, once again approached by the Revenue challenging such orders passed by several High Courts. The Hon’ble Apex Court in order to resolve the issues raised with regard to considering as to whether the notices issued under section 148 under new regime pursuant to the directions issued by Hon’ble Apex Court in case of Ashish Agarwal (supra) would be time barred or not and whether such notices would be valid or invalid notice for want of approval of the specified authority as per provision of section 151 of Act under the new regime or not and by order passed in case of Rajeev Bansal (supra), the Hon’ble Apex Court has issued the direction and in compliance to such directions, this group of petitions which which were awaiting decision of Hon’ble Apex Court are now required to be disposed of.

61. Therefore, in view of above dictum of law, the directions issued by the Hon’ble Apex Court in case of Ashish Agarwal (supra) and further explained in case of Rajeev Bansal (supra) are to be followed and implemented in letter and spirit.

62. Therefore, taking the first issue raised by the petitioners for consideration that there is no approval of the specified authority as per provision of section 151 of the new regime is required to be considered in light of the decision in case of Rajeev Bansal (supra).

63. Contention of the petitioners that date of notices under section 148 issued as per the direction of Hon’ble Apex Court in case of Ashish Agarwal(supra) is to be considered as the relevant date to apply the provisions of section 151 for approval of the specified authority seems to be very attractive at the first blush however, if decision of Hon’ble Apex Court in case of Rajeev Bansal (supra) is read and re-read, in detail comprehensively and in wholesome manner, we are of the opinion that such contentions raised on behalf of the petitioners is required to be rejected outright for the following reasons:

1) Hon’ble Apex Court in case of Rajeev Bansal (supra) has considered the aspect of sanction of the specified authority in paragraph nos. 73 to 81 in detail. On perusal of paragraph no. 73 to 81, Hon’ble Apex Court has referred to notice under section 148 of Act under the new regime pursuant to the directions issued in case of Ashish Agarwal (supra) and has considered the same along with the provisions of TOLA.

2) After considering the mandatory requirement of grant of sanction by the appropriate authority which is a precondition for the Assessing Officer to assume jurisdiction under section 148 of the Act to issue notice for reassessment, in paragraph no. 77, Hon’ble Apex Court referred to the provisions of TOLA wherein it is categorically observed that: “The test to determine whether Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 will apply to section 151 of the new regime is this : if the time limit of three years from the end of an assessment year falls between March 20, 2020 and March 31, 2021, then the specified authority under section 151(i) has an extended time till June 30, 2021 to grant approval. In the case of section 151 of the old regime, the test is : if the time limit of four years from the end of an assessment year falls between March 20, 2020 and March 31, 2021, then the specified authority under section 151(2) has time till March 31, 2021 to grant approval. The time limit for section 151 of the old regime expires on March 31, 2021 because the new regime comes into effect on April 1, 2021.”

3) In view of above observations there is no confusion as tried to have been raised on behalf of the petitioners that the date of notice under section 148 i.e. 29.07.2022 issued between July, 2022 and September, 2022 has to be considered being notice issued beyond three years forgetting the fact that such notices have the genesis in notice issued on or before 30.06.2021 under TOLA and when Hon’ble Apex Court has observed as above and further explained in paragraph no.78 by giving example for Assessment Year 20172018 for obtaining approval of the specified authority by observing that “…three years time limit for Assessment Year 2017-2018 falls for completion on March 31, 2021 which falls during the time period of March 20,2020 and March, 31, 2021 contemplated under section 3(1) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and as such, authority specified under section 151(i) of the new regime can grant sanction till June 30, 2021.” Therefore, notice issued under section 148 issued between July, 2022 and September, 2022 is nothing but substitution of the notices which were issued under TOLA by the respondent between 1st April, 2021 and 30th June, 2021. This is further fortified by directions of the Hon’ble Apex Court to exclude the period from 30th June, 2021 till 4th May, 2022 date of decision in case of Ashish Agarwal (supra) and exclusion of the time till the information is provided to the assessees as required under section 148A(b) of the Act and further exclusion of 15 days for filing reply or raising objections by the assessee so as to see that order under 148A(d) and notice under section 148 is issued between surviving time as per TOLA i.e. from the date of issuance of notices under TOLA till 30th June, 2021 as explained by Hon’ble Apex Court in paragraph nos. 94 to 112 in case of Rajeev Bansal (supra).

64. Considering the observations and directions issued by the Hon’ble Apex Court in case of Rajeev Bansal (supra)and applying the same to the facts of the case, we are of the opinion that approval granted by the specified authority as per section 151(i) of the Act for issuance of order under 148A(d) and notice under section 148 of the Act is valid and therefore, contention of the petitioners is not tenable in view of facts of the case.

65. The alternative contention of the petitioner as to whether notices would be valid notice or invalid notice considering ‘surviving time’ between the date of the issuance of notices under TOLA and 30th June, 2021 or not is required to be considered and for that each matter has to be considered separately on the basis of the facts of case considering the date of issuance of notices under section 148 under TOLA by the Revenue and thereafter date of supplying information to the assessee and date of passing of order under section 148A(d) and date of issuance of notice under section 148 of the Act so as to consider whether issuance of notice under section 148 of the Act is within ‘surviving time’ as per the direction of Hon’ble Apex Court in case of Rajeev Bansal (supra) or not.

66. So far as Assessment Years 2013-2014 and 2014-2015 are concerned, the period of three years from the end of the assessment year would be over prior to 20.03.2020 and the period of six years would be over between 20.03.2020 and 30.06.2021. Therefore, the notices issued under section 148 of the Act under old regime between 01.04.2021 and 30.06.2021 as per TOLA, will be a valid notice if the notice under section 148 of the Act under new regime is issued within the period of ‘surviving time’ as per the directions issued by Hon’ble Apex Court in case of Rajeev Bansal (supra). For the Assessment Years 2016-2017 and 2017-2018 are concerned, the notice issued under section 148 of the Act under old regime between 01.04.2021 and 30.06.2021 under TOLA would be considered to be issued within three years from the end of the relevant assessment year as three years would complete within the period of 20.03.2020 and 30.06.2021.

67. Therefore, in facts of these petitions, following data is required to be considered to find out ‘surviving time’ to decide as to whether the impugned notices under section 148 of the Act issued under the new regime as per the decision of Hon’ble Apex Court in case of Ashish Agarwal (supra) would be valid notice or not in view of the decision of Hon’ble Apex Court in case of Rajeev Bansal (supra):

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68. It is apparent from the above details that impugned notice under section 148 of the Act is issued beyond the period of ‘surviving time’ as per the direction of Hon’ble Apex Court in case of Rajeev Bansal (supra)and therefore, such notices would be invalid notices.

69. The impugned notices issued under section 148 of the Act are accordingly quashed and set aside being invalid having been issued beyond the ‘surviving time’. Accordingly, impugned orders passed under section 148A(d) of the Act would also not survive and are accordingly, quashed and set aside. Subsequent proceedings, if any, undertaken by the respondent would not survive and are also quashed and set aside.

70. Rule is made absolute to the aforesaid extent. No order as to costs.”

11. As the issue is squarely covered in favour of the assessee by the judgement of the Hon’ble Supreme Court in the case of Rajeev Bansal (supra), and issue is also covered in favour of the assessee by the judgement of Hon’ble jurisdictional High Court of Gujarat, in the case of Dhanraj Govindram Kella (supra) and there is no change in facts and law and the Revenue is unable to produce any material to controvert the aforesaid findings of the Hon’ble Supreme Court. Respectfully, following the binding judgments of the Hon’ble Supreme Court and Hon’ble jurisdictional High Court of Gujarat, in the case of Dhanraj Govindram Kella (supra), we quash the reassessment proceedings and allow the appeal of the assessee.

12. As the reassessment itself is quashed, all other issues on merits of the additions, in the impugned assessment proceedings, are rendered academic and infructuous.

13. In the result, the appeal filed by the assessee is allowed.

Order is pronounced in the open Court on 10/09/2026.