Notices issued under Income Tax provisions after statutory deadlines are invalid and subject to quashing under the Act.

JUDGMENT :

BHARGAV D. KARIA, J.

1. Heard learned advocate Mr. Jaimin A. Gandhi for the petitioner and learned Senior Standing Counsel Ms. Maithili D. Mehta for the respondents.

2. The petitioner has challenged notices issued under section 148 of the Income Tax Act, 1961 (for short “the Act”) for the Assessment Year 2015-2016 under the old regime in view of TOLA without issuing notice under section 148A(b) as required to be issued with effect from 01.04.2021.

3. Notice under section 148 under Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 [(2020) 422 ITR (St.) 116] (For short “TOLA”) was issued on 30.06.2021 whereas notice under section 148A(b) of the Act after judgment in case of Union of India and others v. Ashish Agarwal, (2022) 444 ITR 1 (SC) was issued on 30.05.2022. However, it is the case of the petitioner that such notice has not been served upon the petitioner.

4. The respondent Assessing Officer has issued notice under section 148 of the Act after 31.03.2021 on the pretext that due to operation of TOLA, time limit for issuance of notice would be extended upto 30.06.2021.

5. Thereafter, considering the decision of Hon’ble Apex Court in case of Ashish Agarwal (supra), notice issued under section 148 between 01.04.2021 and 30.06.2021 for Assessment Year 2015-2016 was deemed to be notice under section 148A(b) of the Act which has come into operation with effect from 01.04.2021 and thereafter as per the direction issued by the Hon’ble Apex Court in case of Ashish Agarwal (supra) department has issued the notices under section 148 of the Act between the month of July,2022 and August, 2022 after following the procedure of inviting reply and passing order under section 148A(d) of the Act.

6. The petitioners challenged such notices issued by the respondent Assessing Officer for Assessment Year 2015-2016 pursuant to the order of Hon’ble Apex Court in case of Ashish Agarwal (supra).

7. During the pendency of these petitions, similar notices which were issued for Assessment Years 2013-2014 to 2017-2018 came up for consideration on the ground of delay as well as on the ground of getting valid sanction before this Court and other High Courts. This Court in case of Keenara Industries (P) Ltd. vs. ITO, [2023] 147 Taxamann.com 585 (Guj) allowed such petitions.

8. The matter was carried to Hon’ble Supreme Court. Hon’ble Supreme Court in case of Union of India v. Rajeev Bansal, (2024) 469 ITR 46 (SC) decided the issues raised with regard to delay as per the provisions of section 149 of the Act which has come into operation after 01.04.2021 as well as validity of sanction granted under section 155 of the Act.

9. During the course of hearing before the Hon’ble Apex Court, Revenue conceded to the effect that so far as Assessment Year 2015-2016 is concerned, Revenue could not have issued the notices under section 3(1) of TOLA as considering the time period as prescribed under section 149 of the Act with effect from 01.04.2021, three years would be over on 31.03.2019 which is prior to coming into force of TOLA and six years would be completed on 31.03.2022 which is after operation of TOLA. In such circumstances, notices for Assessment Year 2015-2016 are held to be invalid by Hon’ble Apex Court in case of Rajeev Bansal (supra).

10. The Hon’ble Apex Court followed the decision of Rajeev Bansal (supra) in case of Deepak Steel and Power Ltd vs. Central Board of Direct Taxes, [2025] 174 Taxmann.com 144 (SC) and after recording the concession of the learned advocate for the d