Reassessment Notice Issued Under New Regime Beyond Surviving TOLA Limitation Period Is Time-Barred and Invalid.

The petitioner challenged an order passed under Section 148A(d) and a subsequent notice issued under Section 148 of the Income Tax Act, 1961, dated 28.07.2022 for Assessment Year (AY) 2013-2014.

Originally, a notice was issued under the old regime on 24.06.2021 during the extended time period provided by the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (TOLA).

Following the Supreme Court’s ruling in Ashish Agarwal, this notice was treated as a show-cause notice under Section 148A(b). The Assessing Officer provided information to the assessee on 27.05.2022. After granting extensions for a reply, the final reassessment notice was issued on 28.07.2022.

1. Whether the reassessment notice issued under Section 148 dated 28.07.2022 was barred by limitation considering the "surviving time" principle.

The court applied Section 148 and Section 148A of the Income Tax Act, 1961, as amended by the Finance Act, 2021.

The court relied on the Supreme Court decision in Union of India v. Ashish Agarwal, which converted old notices into new show-cause notices.

The court relied on Union of India v. Rajeev Bansal, which established the "surviving time" theory where the period of limitation is calculated by determining the time remaining for the Revenue to issue a notice as of 01.04.2021, accounting for the stay during the Ashish Agarwal implementation period.

The court also followed its own precedent in Dhanraj Govindram Kella v. ITO, which categorized valid and invalid notices based on specific AY timelines and TOLA.

The court calculated the specific "surviving time" available to the Revenue to issue the Section 148 notice for AY 2013-14. Since the original TOLA-protected notice was issued on 24.06.2021, the Revenue had a limited window (the "surviving time") to issue the final notice after the Ashish Agarwal procedure was completed.

The court determined that the last date for the issuance of the notice under Section 148, per the mathematical application of the Rajeev Bansal principles to these specific dates, was 25.07.2022. Because the impugned notice was issued on 28.07.2022—three days after the expiry of the surviving period—it was deemed to be beyond the permitted period of limitation.

The Court quashed and set aside the order under Section 148A(d) dated 28.07.2022, the notice under Section 148 dated 28.07.2022, and all consequential reassessment proceedings. Rule was made absolute in favor of the petitioner.