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

The petitioner challenged a reassessment notice issued on June 30, 2021, under Section 148 of the Income Tax Act, 1961, for Assessment Year (AY) 2015-16

The Revenue issued the notice under the "old regime" (pre-April 1, 2021), relying on the Taxation and Other Laws (Relaxation of Certain Provisions) Act, 2020 (TOLA) to extend the limitation period

Following the Supreme Court’s decision in Ashish Agarwal, the notice was treated as a show-cause notice under the new Section 148A(b), and a subsequent order under Section 148A(d) was passed followed by a fresh notice under Section 148 in mid-2022

The petitioner contended that for AY 2015-16, even with TOLA, the notice was time-barred under the new regime

1. Whether the reassessment notice issued for Assessment Year 2015-16 after April 1, 2021, is barred by limitation under the amended provisions of the Income Tax Act

2. Whether the extension of time granted by TOLA can override the limitation periods for Assessment Year 2015-16 as interpreted by the Supreme Court in Rajeev Bansal

Section 149 of the Income Tax Act, 1961 (as amended by the Finance Act, 2021), which governs the time limits for issuing reassessment notices

The Supreme Court precedent in Union of India v. Rajeev Bansal (2024), which clarified that for AY 2015-16, the three-year limit expired on March 31, 2018, and the six-year limit expired on March 31, 2021, meaning TOLA could not extend the deadline beyond the latter date

Deepak Steel and Power Ltd v. CBDT (2025), where the Revenue conceded that notices for AY 2015-16 issued after April 1, 2021, must be dropped

The court reasoned that for AY 2015-16, the window for reopening assessments under the new regime is restricted by the specific limitation timelines established in Section 149

Since the six-year limitation period for AY 2015-16 ended on March 31, 2021, any notice issued on or after April 1, 2021, falls outside the permissible completion period, even when considering the relaxations offered by TOLA

The court noted that the Revenue had already made a formal concession before the Supreme Court in the Rajeev Bansal case, admitting that notices for AY 2015-16 issued after the transition to the new regime (April 1, 2021) were invalid

Applying this logic to the present facts, the court found the impugned notice for the same assessment year to be structurally and legally identical to those already declared invalid by higher forums

Following the mandates of the Supreme Court in Rajeev Bansal and Deepak Steel, the High Court quashed and set aside the impugned notice. The writ petition was allowed, and the Rule was made absolute