Issuance of Reassessment Notice Under Income Tax Act Beyond Limitation Under TOLA: Gujarat HC Quashes It as Time-Barred [Read Order]
The Court held that both the original notice dated 30.06.2021 and the subsequent notice dated 27.07.2022 were beyond the permissible time limit and thus invalid
![Issuance of Reassessment Notice Under Income Tax Act Beyond Limitation Under TOLA: Gujarat HC Quashes It as Time-Barred [Read Order]](https://images.taxscan.in/h-upload/2025/07/09/2061823-issuance-of-reassessment-notice-reassessment-notice-reassessment-notice-under-income-tax-act-taxscan.webp "Issuance of Reassessment Notice Under Income Tax Act Beyond Limitation Under TOLA: Gujarat HC Quashes It as Time-Barred [Read Order]")
The High Court of Gujarat quashed reassessment notices issued under Section 148 of the Income Tax Act,1961 on the ground that they were time-barred under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act (TOLA). Tyrone Patrick Lemos, petitioner-assessee, filed the income tax return for Assessment Year (AY) 2013-14 on 28.04.2016. A notice under...
The High Court of Gujarat quashed reassessment notices issued under Section 148 of the Income Tax Act,1961 on the ground that they were time-barred under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act (TOLA).
Tyrone Patrick Lemos, petitioner-assessee, filed the income tax return for Assessment Year (AY) 2013-14 on 28.04.2016. A notice under Section 148 was issued on 30.06.2021 under the TOLA Act.
After the Supreme Court's decision in Union of India vs. Ashish Agarwal, the respondent issued a notice under Section 148A(b) on 21.05.2022 and passed an order under Section 148A(d) on 27.07.2022, alleging that income of ₹1.80 crore had escaped assessment. A fresh notice under Section 148 was also issued on the same day.
The petitioner challenged both the order under Section 148A(d) and the notice issued under Section 148.
The petitioner counsel, pointed out that the Supreme Court in Union of India v. Rajeev Bansal had overturned the Gujarat High Court’s earlier decision in Keenara Industries Pvt. Ltd. and laid down the procedure for assessing the validity of notices issued under TOLA between 31.03.2021 and 30.06.2021.
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He argued that since the notice in this case was issued on 30.06.2021, only one day remained to issue a valid notice after giving the petitioner time to respond. As per the Ashish Agarwal ruling, the petitioner submitted the reply on 06.06.2022, so the department had time only until 13.06.2022 to issue a valid notice.
However, the notice under Section 148 was issued on 27.07.2022, making it time-barred. As a result, the original notice dated 30.06.2021 also became invalid.
He referred to key paragraphs of the Rajeev Bansal judgment, where the Supreme Court clarified that reassessment notices must be issued within the permitted time under the Income Tax Act read with TOLA, and any notice issued beyond that period would be invalid.
The department counsel did not dispute the dates and admitted that the notice dated 27.07.2022 was time-barred and that the earlier notice dated 30.06.2021 was also invalid.
Justice Bhargav D Karia and Justice Pranav Trivedi observed that the notice dated 30.06.2021 left only one day for issuing a valid notice under Section 148 after giving 14 days to the petitioner to respond, as required by the Supreme Court’s ruling in Ashish Agarwal.
Since the petitioner filed the reply on 06.06.2022, the last date to issue the notice was 13.06.2022. However, the notice under Section 148 was issued much later, on 27.07.2022, making it time-barred. As a result, the earlier notice dated 30.06.2021 was also held to be invalid.
The Court allowed the petition on this ground and quashed both the notices dated 27.07.2022 and 30.06.2021. No order was passed as to costs.
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