Reassessment Notices Issued Beyond the "Surviving Time" Under TOLA and Ashish Agarwal Framework Are Time-Barred and Invalid.

The Petitioner challenged a reassessment notice issued under Section 148 of the Income Tax Act, 1961 ("the Act") dated August 27, 2022, for Assessment Year 2016-17

Initially, the Assessing Officer issued a notice on May 17, 2021, under the old regime, utilizing time extensions provided by the Taxation and Other Laws (Relaxation of Certain Provisions) Act, 2020 ("TOLA")

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

The Revenue provided information to the Petitioner on June 21, 2022, and the Petitioner replied on July 6, 2022

Subsequently, the Revenue issued an order under Section 148A(d) and the impugned notice under Section 148 on August 27, 2022

Whether the notice issued under Section 148 of the Act dated August 27, 2022, was barred by limitation considering the "surviving time" principle

The Court applied the "surviving time" principle established by the Supreme Court in *Union of India v. Rajeev Bansal* (2024), which dictates that reassessment notices issued under the new regime must be within the limitation period surviving from the TOLA extensions

It also relied on *Union of India v. Ashish Agarwal* (2022) regarding the conversion of old notices to Section 148A(b) notices

And the Gujarat High Court’s prior application of these principles in *Dhanraj Govindram Kella v. ITO* (2025)

Specifically, the "surviving time" is calculated by excluding the period from the initial deemed notice (between April–June 2021) until the supply of information and the two-week response period allowed to the assessee

The Court performed a mathematical verification of the limitation period based on the timelines provided by the Revenue.

For Assessment Year 2016-17, the three-year limitation period originally fell within the TOLA window (March 20, 2020, to June 30, 2021)

Under the *Rajeev Bansal* framework, after accounting for the time stayed during the *Ashish Agarwal* implementation—specifically from the supply of information (June 21, 2022) plus the response period (ending July 6, 2022)—the "surviving time" for the Assessing Officer to issue the actual Section 148 notice expired on August 19, 2022

Since the impugned notice was issued on August 27, 2022, it was eight days beyond the permissible legal window

The Revenue's counsel could not controvert these dates

The Court quashed and set aside the order under Section 148A(d), the notice under Section 148, and all consequential proceedings

Rule was made absolute