Reassessment notices for Assessment Year 2015-16 issued after April 1, 2021, are time-barred and invalid.

The petitioner challenged a reassessment notice issued under Section 148 of the Income Tax Act, 1961, for the Assessment Year (AY) 2015-16.

Originally, a notice under the old regime was issued on 30.06.2021, invoking the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance/Act, 2020 (TOLA) to extend the limitation period.

Following the Supreme Court’s decision in Ashish Agarwal, the Department treated the old notice as a show-cause notice under the new Section 148A(b) and subsequently issued a fresh Section 148 notice in July/August 2022.

The petitioner contended that for AY 2015-16, the notices were time-barred under the new legal framework.

1. Whether the reassessment notices issued for Assessment Year 2015-16 after 31.03.2021 are legally valid under the limitation periods prescribed by Section 149 of the Income Tax Act as amended by the Finance Act, 2021.

2. Whether the extension of time granted by TOLA can validate notices for AY 2015-16 where the three-year and six-year limitation periods do not align with the TOLA window.

The court primarily applied Section 149 of the Income Tax Act, 1961 (as amended w.e.f. 01.04.2021), which governs the time limits for issuing reassessment notices.

It relied on the landmark Supreme Court precedent Union of India v. Rajeev Bansal (2024), which clarified the interplay between TOLA and the amended Income Tax provisions, specifically holding that for AY 2015-16, the Revenue’s power to issue notices expired because the relevant timelines did not fall within the "completion period" protected by TOLA.

The court also cited Deepak Steel and Power Ltd v. CBDT (2025), where the Revenue conceded that notices for AY 2015-16 issued after 01.04.2021 must be dropped.

The court reasoned that for AY 2015-16, the three-year limitation period expired on 31.03.2019 (prior to TOLA), and the six-year period expired on 31.03.2022.

Based on the Revenue's own concession recorded by the Supreme Court in Rajeev Bansal, notices for AY 2015-16 issued on or after 01.04.2021 do not fall within the protected window of TOLA for completion.

The court observed that since the impugned Section 148 notices were issued in mid-2022 (following the Ashish Agarwal procedure) and were based on an initial underlying notice issued after 01.04.2021, they are hit by the bar of limitation.

The court noted that multiple High Courts (Delhi, Punjab & Haryana, Rajasthan, Karnataka) and the Supreme Court in subsequent SLPs have consistently quashed notices for this specific assessment year on these grounds.

The court held that all reassessment notices for AY 2015-16 issued on or after 01.04.2021 are invalid as they are time-barred and cannot benefit from the TOLA extensions, following the binding precedent set in Union of India v. Rajeev Bansal.

Rule made absolute.