Reassessment Notice Issued Under New Regime Beyond Surviving Time Limit Prescribed Under TOLA Is Time-Barred

The petitioner challenged an order passed under Section 148A(d) and a consequential notice issued under Section 148 of the Income Tax Act, 1961, dated 22.07.2022 for Assessment Year 2014-2015

Initially, the respondent issued a notice on 21.06.2021 under the old regime, leveraging the extension provided by the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance/Act, 2020 (TOLA)

Following the Supreme Court's mandate in Ashish Agarwal, this notice was treated as a show-cause notice under the new Section 148A(b)

Information was provided to the petitioner on 26.05.2022, and the final reassessment notice was issued on 22.07.2022

The petitioner contended the notice was time-barred under the "surviving time" principle

Whether the notice issued under Section 148 of the Act dated 22.07.2022 was barred by limitation considering the "surviving time" available to the Revenue after the Ashish Agarwal judgment

The Court applied the "surviving time" principle established by the Supreme Court in Union of India v. Rajeev Bansal

This principle dictates that for reassessment notices issued under the transition from the old to the new regime (post-Ashish Agarwal), the Assessing Officer must issue the Section 148 notice within the specific number of days remaining (the "surviving time") in the limitation period as it stood on the date of the original TOLA notice

The Court further relied on its own coordinate bench decision in Dhanraj Govindram Kella v. ITO, which interpreted the computation of these timelines for Assessment Years 2013-14 and 2014-15

The Court calculated the specific limitation period for the petitioner’s case. The original notice under the old regime was issued on 21.06.2021, leaving 9 days of "surviving time" before the TOLA deadline of 30.06.2021

Following the procedure in Rajeev Bansal, the "stay" on the limitation period was lifted once the Revenue provided information (26.05.2022) and the mandatory two-week response period for the assessee expired (08.06.2022)

Consequently, adding the 9 days of surviving time to 09.06.2022, the last date for the Revenue to validly issue the Section 148 notice was 18.06.2022

Since the impugned notice was issued on 22.07.2022, it fell outside the surviving period

The Revenue could not controvert these factual dates

The Court quashed and set aside the order under Section 148A(d) dated 22.07.2022, the notice under Section 148 dated 22.07.2022, and all consequential reassessment proceedings. Rule was made absolute