Dharmadev Developers Vs Income Tax Department (Gujarat High Court)
The Gujarat High Court considered a writ petition filed under Article 226 of the Constitution of India challenging a reassessment notice issued under Section 148 of the Income Tax Act, 1961, dated 31.07.2022, along with the consequential order dated 30.05.2023 passed under Section 147 read with Section 144B of the Act. The petitioner contended that the impugned notice was invalid and time-barred.
The facts revealed that the Assessing Officer had earlier issued a notice under Section 148 in June 2021 for Assessment Year 2013–14 by invoking the extended limitation period available under the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (TOLA). Following the decision of the Supreme Court in Union of India v. Ashish Agarwal, such notices issued under the old regime between 01.04.2021 and 30.06.2021 were required to be treated as show cause notices under Section 148A(b) of the Act, which came into force from 01.04.2021.
The High Court noted that the Supreme Court, in Union of India v. Rajeev Bansal, had laid down the governing principle for determining the validity of reassessment notices issued after the Ashish Agarwal directions. The validity of such notices depended on whether the final notice under Section 148 of the new regime was issued within the “surviving time” available under the Act read with TOLA. Any notice issued beyond the surviving limitation period would be time-barred and invalid.
