Section 148 notices issued beyond the surviving time under TOLA are time-barred and invalid.

The respondent Assessing Officer (AO) originally issued a notice dated 10.06.2021 under Section 148 of the Income Tax Act, 1961 ("the Act") for Assessment Year 2013-2014, utilizing the extension provided by the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (TOLA).

Following the Supreme Court’s decision in Union of India v. Ashish Agarwal, this notice was treated as a show-cause notice under the newly inserted Section 148A(b).

The Revenue provided the requisite information to the petitioner on 26.05.2022, with the deadline for a reply being 10.06.2022.

The AO subsequently passed an order under Section 148A(d) on 20.07.2022 and issued a new notice under Section 148 on 21.07.2022.

The petitioner challenged these proceedings, alleging they were time-barred under the "surviving time" principle established by the Supreme Court.

1. Whether the reassessment notice issued under Section 148 of the Act is valid or time-barred under the "surviving time" framework established in Union of India v. Rajeev Bansal.

The court applied Sections 148 and 148A of the Income Tax Act, 1961, alongside the provisions of TOLA 2020.

It relied on the Supreme Court’s ruling in Union of India v. Ashish Agarwal, which deemed old-regime notices as notices under Section 148A(b) of the new regime.

The court applied the "surviving time" principle from Union of India v. Rajeev Bansal, which dictates that the Revenue must issue reassessment notices within the time remaining from the original limitation period (as extended by TOLA) after excluding the period during which proceedings were deemed stayed by judicial intervention.

The court also followed its own precedent in Dhanraj Govindram Kella v. Income Tax Officer.

The court calculated the "surviving time" available to the Revenue to issue a valid Section 148 notice.

The original notice was issued on 10.06.2021, and the TOLA extension for that period ended on 30.06.2021, leaving a "surviving time" of 21 days.

Under the Rajeev Bansal framework, the limitation period was stayed from the date of the deemed notice until 15 days after the Revenue supplied the relevant information to the assessee.

In this case, information was supplied on 26.05.2022, and the 15-day response period expired on 10.06.2022.

Consequently, the Revenue had 21 additional days from 10.06.2022—until 01.07.2022—to issue the Section 148 notice.

Since the AO passed the Section 148A(d) order on 20.07.2022 and issued the Section 148 notice on 21.07.2022, both actions occurred after the expiry of the surviving limitation period.

The court allowed the petition, quashing the order under Section 148A(d) dated 20.07.2022, the notice under Section 148 dated 21.07.2022, and all consequential reassessment proceedings.

Rule was made absolute.