Vishwa Realty Ltd. Vs Assessment Unit (Gujarat High Court)
Vishwa Realty Ltd. challenged the validity of notices issued under Section 148 of the Income Tax Act, 1961, for Assessment Year (AY) 2015-2016. The notices were issued in June 2021 under the provisions of the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (“TOLA”), without following the procedure mandated under Section 148A(b) of the Act, which came into effect on 1 April 2021. A subsequent notice under Section 148A(b) was issued in May 2022 following the Supreme Court’s decision in Union of India v. Ashish Agarwal (2022) 444 ITR 1 (SC).
The petitioner contended that the notices issued in June 2021 were invalid because the mandatory Section 148A(b) procedure had not been followed. The Revenue had issued the original notice under Section 148 for AY 2015-2016 on 25 June 2021, relying on TOLA to extend the time limit up to 30 June 2021. Later, considering the Supreme Court’s direction in Ashish Agarwal, notices issued between July and August 2022 were issued after inviting a reply and following the Section 148A(d) procedure. The petitioner challenged the validity of the notices issued in June 2021.
During the pendency of the petition, similar issues relating to notices for AYs 2013-14 to 2017-18 were considered by Gujarat High Court in Keenara Industries (P.) Ltd vs. ITO ([2023] 147 Com 585), and subsequently taken up before the Supreme Court in Union of India v. Rajeev Bansal (2024) 469 ITR 46 (SC). In Rajeev Bansal, the Supreme Court considered the validity of notices issued under TOLA and Section 149 of the Act and the issue of sanction under Section 155. The Revenue conceded that for AY 2015-16, notices issued on or after 1 April 2021 would have to be dropped, as the period for completion fell outside the timeframe prescribed under TOLA.
