AI Drafter 
TaxTMI 
TaxTMI 
2025 (11) TMI 1170
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....n record and marked "X" for identification. 3. The Petitioner is permitted to amend the Writ Petition in terms of the draft handed in. Re-verification is dispensed with. The amendment shall be carried out within a period of 1 week from today and the amended copy of the Petition shall be served on the advocates for the Revenue. 4. Rule. Respondents waive service. With the consent of parties, Rule made returnable forthwith and heard finally. 5. By this Petition, the Petitioner challenges a notice dated 27 July 2022 issued under Section 148 of the Income-tax Act, 1961 ("the Act"), the subsequent notices dated 9 October 2025 and 14 October 2025 issued under Section 142(1) of the Act, and the show cause notice dated 18 October 2025 issued by Respondent No. 1, inter alia on the ground that the notice under Section 148 of the Act is issued beyond the period of limitation, and therefore, all subsequent notices will also be bad in law. 6. The brief facts of the case are this. For the year under consideration, i.e. the A.Y. 2014-15, the Petitioner filed his return of income on 29 September 2014 declaring a total income of Rs. 64,86,660/- in respect of which no scrutiny assessment....
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....ction granted is bad in law; (vi) the jurisdictional Assessing Officer lacked jurisdiction to issue the impugned notice and pass the impugned order; and (vii) even on merits of the case no income had escaped assessment. 9. After hearing the parties, the impugned notice dated 27th July 2022 was quashed by this Court vide its order dated 1 March 2024 solely on the ground that the notice was barred by limitation. This was done by relying on its earlier judgment in Godrej Industries v. ACIT [160 taxmann.com 13(Bom)]. All other grounds canvassed by the Petitioner were kept open by this Court. 10. Being aggrieved by the order of this Court, Respondent No. 1 filed a Special Leave Petition before the Hon'ble Supreme Court on 24 January 2025 being SLP No. 5515 of 2025. This SLP was disposed off vide order dated 24 February 2025 in terms of the findings given in UOI v. Rajeev Bansal [(469) ITR 46 (SC)]. 11. The Petitioner submitted that the present Petition challenges the validity of the reassessment proceedings on the grounds which were not disposed off and expressly kept open in Writ Petition No. 130 of 2024 as well as on the ground of limitation having regard to....
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....be untenable for the reasons set out from page 8 of the show cause notice. 15. For the sake of convenience and more particularly to understand the argument of limitation, the sequence of events and the relevant dates detailed hereinbefore are tabulated as under:- Sr.No. Date Event 1. 29-06-2021 Notice under erstwhile section 148 [deemed to be a notice under new section 148A(b)] 2. 04-05-2022 Judgment of the Hon'ble Supreme Court in Ashish Agarwal 3. 25-05-2022 Notice conveying reasons for reopening provided to the Petitioner pursuant to the judgment in Ashish Agarwal and providing a period of two weeks to the Petitioner to respond 4. 03-06-2022 Reply filed by the Petitioner to the notice under section 148A(b) 5. 08-06-2022 The two weeks' time granted elapsed. 6. 17-06-2022 Second reply filed by the Petitioner to the notice issued under section 148A(b) 7. 25-06-2022 Third reply filed by the Petitioner to the notice issued under section 148A(b) 8. 26-07-2022 Order passed under section 148A(d) 9. 27-07-2022 Notice issued under section 148 10. 09-10-2025 Notice under section 142(1) ....
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....e date of the issuance till 4 May 2022. The Court further extended this limitation and stated that the show cause notices were deemed to have been stayed not only upto 4 May 2022 but till the date when the Assessing Officer provided the relevant information and material to the Assessee in terms of the directions issued in its judgment in Ashish Agarwal (supra). The Court further noted that the provisos to Section 149 allows the exclusion of time allowed to an Assessee to respond to the show cause notice under Section 148A(b) to compute the period of limitation. The Hon'ble Supreme Court therefore summarized that the total time that is excluded for computation of the period of limitation within which the notice is to be issued as encompassing the time during which the show cause notices were effectively stayed, that is, from the date of the original notice under Section 148 till the supply of the relevant information or material by the Assessing Officers to the Assessee in terms of the directions in Ashish Agarwal and a further period of two weeks to allow to the Assessee to respond to the show cause notice. The effect of this conclusion of the Supreme Court was that the time surviv....
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.... the ten year time limit available in Section 149 of the Act for issuing a notice under Section 148 of the Act and contends that the notice issued on 27 July 2022 is within such time. Secondly, the Respondent relies on the period available for passing the order under Section 148A(d), viz., within one month from the end of the month in which the reply is received and since the replies were received on 3 June 2022, 17 June 2022 and 25 June 2022, one month from the end of the month would be 31 July 2022, and therefore, contended that the order under Section 148A(d) and the notice under Section 148 of the Act are within time. 20. We have heard the learned Counsel for the parties. We have also perused the papers and proceedings in the above Writ Petition. In view of the controversy involved, it is necessary to refer to the judgment of the Hon'ble Supreme Court in Rajeev Bansal (supra) which held as under:- "...49. The first proviso to Section 149(1)(b) requires the determination of whether the time limit prescribed under section 149(1)(b) of the old regime continues to exist for the assessment year 2021-2022 and before. Resultantly, a notice under Section 148 of the new regi....
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....Agarwal (supra). To summarize, the combined effect of the legal fiction and the directions issued by this Court in Ashish Agarwal (supra) is that the show cause notices that were deemed to have been issued during the period between 1 April 2021 and 30 June 2021 were stayed till the date of supply of the relevant information and material by the assessing officer to the assessee. After the supply of the relevant material and information to the assessee, time begins to run for the assesses to respond to the show cause notices. 107. The third proviso to Section 149 allows the exclusion of time allowed for the assesses to respond to the show cause notice under section 149A(b) to compute the period of limitation. The third proviso excludes "the time or extended time allowed to the assessee." Resultantly, the entire time allowed to the assessee to respond to the show cause notice has to be excluded for computing the period of limitation. In Ashish Agarwal (supra), this Court provided two weeks to the assesses to reply to the show cause notices. This period of two weeks is also liable to be excluded from the computation of limitation given the third proviso to Section 149. Hence, ....
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....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. 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 thi....
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....preconditions is invalid as it affects the jurisdiction of the assessing officer. Therefore, the reassessment notices issued under section 148 of the new regime, which are in pursuance of the deemed notices, ought to be issued within the time limit surviving under the Income-tax Act read with TOLA. A reassessment notice issued beyond the surviving time limit will be time-barred..." (emphasis supplied) 21. Subsequently several High Courts have considered the judgment in Rajeev Bansal while dealing with the issue of the surviving period. The Delhi High Court in Ram Balaram Buildhome (P.) Ltd (supra) while considering the issue held as under:- "...65. Thus, in the facts of the present case, the last date for issuance of notice under Section 148 of the Act for AY 2013-14 under the statutory framework, as was existing prior to 01.04.2021 was 31.03.2020, that is, six years from the end of the relevant assessment year. 66. By virtue of Section 3(1) of TOLA time for completion of specified acts, which fell during the period 20.03.2020 to 31.12.2020 were extended till 30.06.2021. Thus, the notice dated 01.06.2021 was issued twenty-nine days prior to the expiry ....
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....LA 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....
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....of the Act and the proceedings. Since the law laid down by the Hon'ble Supreme Court in Union of India v. Rajeev Bansal, 2024 SCC OnLine SC 2693 is a settled law, it is binding on this Court. I am therefore unable to take a contra view in the light of the aforesaid decision of the Hon'ble Supreme Court in Union of India v. Rajeev Bansal, 2024 SCC OnLine SC 2693..." 24. Based on the above, we observe that a notice under Section 148 of the Act cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice relying on the first proviso to Section 149 of the Act. Hence, the submission of the Respondent that a period of ten years is available to issue the notice under Section 148 of the Act is misconceived. 25. Further, we find that the second ground was urged before this Court in the case of Gurpreet Singh (supra) where the Court records the argument of the Respondent [in paragraph 7(vii)] that the order under Section 148A(d) is to be passed within one month from the end of the month in which the reply has been received, specifically rejected the same in paragraph 18 as Section 148A(d) does not gov....