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Facts
The assessee challenged reassessment proceedings initiated under Section 147 of the Income Tax Act for Assessment Years 2015-16, 2016-17, and 2017-18. The original notices under Section 148 were issued after April 1, 2021, and subsequent orders under Section 148A(d) and fresh notices under Section 148 were issued, leading to assessment orders. The assessee argued that these proceedings were time-barred based on Supreme Court pronouncements regarding the 'surviving time' for completing reassessment actions after the COVID-19 related extensions.
Held
The Tribunal, relying on Supreme Court judgments in Ashish Agarwal, Rajeev Bansal, and Deepak Steel and Power Limited, along with jurisdictional High Court rulings, held that the initial notices under Section 148 and all subsequent proceedings for all assessment years were time-barred and without jurisdiction. The Supreme Court's explicit directions on calculating the 'surviving time' were deemed to override the procedural provisions of Section 148A(d), and the Assessing Officer failed to adhere to these shortened limitation periods.
Key Issues
Whether reassessment proceedings initiated for Assessment Years 2015-16 to 2017-18 were validly commenced within the prescribed time limits, considering the Supreme Court's clarifications on 'surviving time' under the Income Tax Act read with the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.
Sections Cited
147, 148, 148A(b), 148A(d), 144B, 149(1)(b), 149, 68, 151, Article 142
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Income Tax Appellate Tribunal, AHMEDABAD “D” BENCH, AHMEDABAD
Before: MS. SUCHITRA KAMBLE & SHRI NARENDRA PRASAD SINHA
O R D E R PER SHRI NARENDRA PRASAD SINHA, AM: These three appeals filed by the assessee are directed against the separate orders of the National Faceless Appeal Centre (NFAC), Delhi (in short “the CIT(A)”), all dated 30.03.2025, for the Assessment Years (A.Y.) 2015-16, 2016-17 & 2017-18 respectively.
As the issue involved in the three appeals are identical, all the matters were heard together and are being disposed of vide this common order for the sake of convenience. The common issue in all the appeals is the validity of proceeding initiated under Section 147 of the Income Tax , 1229 & 1230/Ahd/2025 (Assessment Years: 2015-16, 2016-17 & 2017-18) Waves Tradeline Private Limited vs. ITO Page 2 of 18 Act, 1961 (hereinafter referred to as ‘the Act’). We will first take up the appeal for the A.Y. 2015-16.
The brief facts of the case are that the assessee had filed its return of income for the A.Y. 2015-16 on 30.09.2015 declaring income of Rs.12,36,700/-. The case was taken up for reassessment proceeding by issue of notice under Section 148 of the Act on 07.06.2021. Thereafter, as per the direction of Hon’ble Supreme Court in the case of Union of India and Ors. vs Ashish Agarwal (Civil Appeal No.3005/2022) dated 04.05.2022, the Assessing Officer had issued notice under Section 148A(b) of the Act on 25.05.2022. Subsequently, the order under Section 148A(d) of the Act was passed on 30.08.2022 and a fresh notice under Section 148 of the Act was issued on 30.08.2022. The assessment was completed under Section 147 read with Section 144B of the Act on 30.05.2023 at total income of Rs.364,12,29,313/-.
4. Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the first appellate authority which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed.
5. The assessee is now in second appeal before us. The following grounds have been taken in this appeal: -
“1. The Ld. CIT(A) has erred in law and facts while disallowing appellant ground that the Ld. AO has not granted opportunity of being heard before passing assessment order u/s.147 read with section 144B as the Ld. AO , 1229 & 1230/Ahd/2025 (Assessment Years: 2015-16, 2016-17 & 2017-18) Waves Tradeline Private Limited vs. ITO Page 3 of 18 has given show cause notice on 15-05-2023 for huge addition of Rs.363,99,92,643/- and due date of reply of the notice was 18-05-2023. The Ld. AO has given only three days to reply Show cause notice for such huge addition which shows that the Ld. AO has not given proper opportunity of being heard to the appellant which is against the principal of natural justice, and on the basis of facts and law the assessment order passed without giving proper opportunity of being heard to appellant is bad in law and required to be quashed.
2. The Ld. CIT(A) has erred in law as well as in facts while confirming the order u/s.148A(d) passed by the Ld. AO and notice issued u/s.148 on the basis of unexplained cash credit in appellant bank accounts and hence, it is assets falling u/s.149(1)(b) of the IT Act, whereas appellant in inquiry proceeding submitted evidence that the amount credited in bank account of appellant is received against sales of goods and not unexplained cash credit. Even though the Ld. A.O. has passed Order u/s.148A(d) ignoring the law and facts submitted in inquiry proceeding and issued notice u/s.148 for income escaping assessment on purely guess work. The Ld. A.O. has failed to discharge his onus of proof to establish the proper reason for initiation of scrutiny u/s.147 on basis of order u/s.148A(d) and merely on assumption arrived on opinion by neglecting the facts and law of cases. Therefore, the LD A.O. has erred in law as well as facts while passing order u/s.148A(d) and initiating income escaping assessment by issuing notice u/s.148. The order passed u/s.148A(d) is bad in law as thus, order passed u/s.147 on that basis for income escaping assessment is also bad in law.
3. The Ld. CIT (A) has erred on law and fact while confirming the addition of Rs.363,99,92,643/ on account of unexplained cash credit u/s.68 for amount received from Orange Tradex Pvt. Ltd., S & H Chemicals & Kriss Enterprise in appellant bank account in assessment order. The Ld. A.O. has totally ignored the facts and submission by appellant in assessment proceeding and has failed to discharge his burden of proof to establish the addition and passed unspeaking order by merely relying on the information received from DDIT(Inv) & order u/s.148A(d). The Id. AO has reproduced the information received from DDIT(Inv.) and order or AO u/s.148A(d) in his order and no contention against assessee submission and evidence was mentioned in his assessment order. The Ld. AO has passed assessment order based on assumption and without establishment and justification of addition. The Ld. A.O has added cash credit sales of assessee to the above mentioned three parties without considering corresponding purchase and Further, the Ld. CIT (A) Has not considered appellant submission of facts, law and evidence in appellate proceeding and merely on conjuncture and surmises accepted AO contention for addition in assessment And on the basis of fact and law of case, the addition confirmed by Ld. CIT(A) of Rs.363,99,62,643/- in assessment order is bad in law and facts and required to be deleted.
, 1229 & 1230/Ahd/2025 (Assessment Years: 2015-16, 2016-17 & 2017-18) Waves Tradeline Private Limited vs. ITO Page 4 of 18 4. The appellant reserves the right to delete, add, alter, and/or modify the grounds of appeal either before or during the course of hearing of the appeal.”
6. The assessee has also raised an additional ground which is as under: -
In view of decision of Supreme Court in case of Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70/301 Taxman 238/469 ITR 46, reopening notice issued on 30.08.2022 was time barred and, thus, original notice issued on 07.06.2021 was invalid.
Shri Sudhir Mehta, Ld. AR of the assessee, submitted that the additional legal ground taken by the assessee goes to the root of the matter and, therefore, this issue may be decided first. He submitted that the original notice under Section 148 of the Act was issued on 07.06.2021, which was barred by limitation. He explained that this notice issued on 07.06.2021 was within the extended time limit as per Taxation and Other Laws Ordinance, 2020 (TOLA). The Ld. AR has drawn our attention to the judgement of Hon’ble Supreme Court in the case of Deepak Steel and Power Limited vs. CBDT, 174 taxmann.com 144 (SC) wherein it was held that for the A.Y. 2015-16 all notices issued on or after 01.04.2021 would have to be dropped as they would not fall for completion during period prescribed under TOLA. Reliance was also placed on the decision of Hon’ble Gujarat High Court in the case of Narendra Maganlal Purohit & Others vs. DCIT in Special Civil Application No.17443/2022 dated 14.07.2025.
Shri Ashesh R. Rewar, the Ld. CIT-DR, on the other hand, relied upon the order of the lower authorities.
, 1229 & 1230/Ahd/2025 (Assessment Years: 2015-16, 2016-17 & 2017-18) Waves Tradeline Private Limited vs. ITO Page 5 of 18 9. We have considered the submissions of the assessee and perused the materials on record. The assessee has contended that reopening proceeding for A.Y. 2015-16 was barred by limitation and the jurisdiction assumed by the Assessing Officer was contrary in law in the light of binding decision of Hon’ble Supreme Court in the cases of Union of India vs. Rajeev Bansal, 167 taxamann.com 70 (SC), Union of India vs. Ashish Agarwal, 444 ITR 1 (SC) and Deepak Steel and Power Limited (supra) as well as the judgement of jurisdictional Gujarat High Court in the case of Narendra Maganlal Purohit & Others (supra). There is no dispute in the fact that the first notice under Section 148 of the Act for A.Y. 2015-16 was issued on 07.06.2021. The Hon’ble Supreme Court in the case of Deepak Steel and Power Limited (supra) while deciding on the issue of notice under Section 148 of the Act for the A.Y. 2015-16 has held as under:
The learned counsel appearing for the revenue with his usual fairness invited the attention of this Court to a three judge bench decision of this Court in Union of India v. Rajeev Bansal 2024 SCC On Line SC 2693/[2024] 167 taxmann.com 70/301 Taxman 238/469 ITR 46 (SC), more particularly, paragraph 19(f) which reads thus: -
“19. (f) The Revenue concedes that for the assessment year 2015- 2016, all notices issued on or after April 1. 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020."
As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, all notices issued on or after 1 April, 2021 will have to be dropped as they would not fall for completion during period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provisions 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021. [Emphasis supplied.] , 1229 & 1230/Ahd/2025 (Assessment Years: 2015-16, 2016-17 & 2017-18) Waves Tradeline Private Limited vs. ITO Page 6 of 18 10. The Hon’ble Supreme Court has thus held that all notices issued on or after 1 April, 2021 for the A.Y. 2015-16 will have to be dropped as they would not fall for completion during period prescribed under TOLA. Further, the Delhi and Bombay High Courts in H.A. Share and Brokers (P.) Ltd. v. ITO [2025] 176 taxmann.com 665 (Delhi) and Cherian Nallathu Abraham Annamma v. ΙΤΟ [2025] 179 taxmann.com 433 (Bom.) respectively have applied the same principle: that any notice issued under section 148 or deemed to be issued under section 148A(b) for AY 2015- 16 after 01.04.2021 is void ab initio. The jurisdictional Gujarat High Court in Narendra Maganlal Purohit v. DCIT, (supra) has also followed the ratio of Rajeev Bansal (supra) and held that such notices are without authority of law. The deeming fiction created in Union of India v. Ashish Agarwal (2022) 444 ITR 1 (SC) cannot by any stretch extend or revive the period of limitation prescribed under section 149 nor can it validate a notice which is barred at its inception.
In the present case, the original notice u/s 148 of the Act for A.Y. 2015-16 was issued on 07.06.2021 i.e. after 01.04.2021. In view of the binding position of law as held by the Hon’ble Supreme Court as well as the Jurisdictional High Court discussed above, the said notice is time- barred and without jurisdiction. Consequently, all subsequent action of the Assessing Officer including notice u/s 148A(b) of the Act dated 25.05.2022, order u/s 148A(d) of the Act dated 30.08.2022, subsequent notice u/s 148 of the Act dated 30.08.2022 and the assessment order passed u/s 147 of the Act dated 30.05.2023, on the foundation of invalid notice, cannot be survive. Accordingly, the assessment order passed u/s 147 read with Section 144B of the Act dated 30.05.2023 is quashed. The ground taken by the assessee is allowed.
, 1229 & 1230/Ahd/2025 (Assessment Years: 2015-16, 2016-17 & 2017-18) Waves Tradeline Private Limited vs. ITO Page 7 of 18 12. Since the appeal of the assessee is allowed on the ground of jurisdiction, the other grounds as taken in this appeal have become infructuous. and 1230/Ahd/2025 (A.Ys. 2016-17 & 2017-18)
The assessee in these appeals has challenged the validity of proceeding under Section 148 of the Act for the two years. According to the assessee, notice issued u/s 148 of the Act for both the years was barred by limitation. The additional legal ground taken by the assessee in for the A.Y.2016-17 is as under: -
“ADDITIONAL GROUNDS:
Assessing Officer issued a reopening notice on 23-04-2021 for assessment year 2016-17 and pursuant to decision of Supreme Court in case of Union of India v. Ashish Agarwal [2022] 138 taxmann.com 64/286 Taxman 183/444 ITR 1, issued a fresh notice on 27-08-2022 and in view of decision of Supreme Court in case of Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70/301 Taxman 238/469 ITR 46, reopening notice issued on 27-08-2022 was time barred and, thus, original notice issued on 23-04-2021 was invalid.
The additional legal ground taken by the assessee in for the A.Y.2017-18 is identical to the ground as taken in the A.Y. 2016-17.
, 1229 & 1230/Ahd/2025 (Assessment Years: 2015-16, 2016-17 & 2017-18) Waves Tradeline Private Limited vs. ITO Page 8 of 18 15. The Ld. AR submitted that the initial notice u/s 148 of the Act for both the years was issued on 23.04.2021, which was within the extended time limit as per TOLA. As per the decision of Hon’ble Supreme Court in the case of Union of India vs. Ashish Agarwal (2023) (1 SSC 617), all the notices issued u/s 148 of the Act during the period from 01.04.2021 to 30.06.2021, were deemed to be notice issued u/s 148A(b) of the Act, as amended by the Finance Act 2021. Further, directions were issued to supply the materials within 30 days and grant further 15 days’ time to the assessee to reply to such notice before passing the order u/s 148A(d) of the Act. The Ld. AR explained that in the present case, the assessee was supplied materials on 25.05.2022 and on 27.05.2022 for the A.Y. 2016-17 and A.Y. 2017-18 respectively, in terms of Section 148A(b) of the Act. The assessee had submitted its reply on 15.06.2022 and on 17.06.2022 for the A.Y. 2016-17 and A.Y. 2017-18 respectively. Thereafter, the order u/s 148A(d) of the Act was passed by the Assessing Officer on 26.08.2022 for both the years. According to the assessee, the orders u/s 148A(d) of the Act dated 26.08.2022 and the fresh notices u/s 148 of the Act issued on 27.08.2022, were barred by limitation.
The Ld. AR explained that as per the decision of Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal (2024) 167 taxmann.com 70 (SC), the order u/s 148A(d) of the Act was required to be passed and notice u/s 148 of the Act under the new regime was required to be issued within the time limit surviving under the Income Tax Act read with TOLA. He explained that since the original notices u/s 148 of the Act were issued on 23.04.2021, the Assessing Officer had only sixty-eight-day surviving limit under the Income Tax Act read with TOLA. Therefore, new notice u/s 148 of the Act was required to be issued within , 1229 & 1230/Ahd/2025 (Assessment Years: 2015-16, 2016-17 & 2017-18) Waves Tradeline Private Limited vs. ITO Page 9 of 18 sixty-eight days, from the date of response of the assessee to the notice u/s 148A(b) of the Act. The Ld. AR submitted that as the notices u/s 148 of the Act for the two years were issued in this case beyond the time limit surviving under the Income Tax Act read with TOLA, the same were barred by limitation.
Per contra, Shri Ashesh R. Rewar, Ld. CIT-DR relied upon the orders of the lower authorities. He submitted that as per provision of section 148A(d) of the Act, the AO was required to pass the order under that section within a period of one month from the end of the month in which the reply of the assessee to the show cause notice u/s 148A(b) of the Act, was received. The Ld. CIT-DR explained that the order u/s 148A(d) passed in this case was within the time limit as prescribed under the Act and the notices u/s 148 of the Act were also issued within the time period. Therefore, there was no infirmity with the notice of the AO. The Ld. CIT-DR further submitted that the limitation date will start from the actual date of response filed by the assessee and not from the due date of response by the assessee. In this regard he had drawn our attention to observation made in para-112 of the judgement of the Hon’ble Supreme Court in the case of Rajeev Bansal (supra).
We have carefully considered the rival submissions. It will be relevant to tabulate the chronology of the events in the present case, which is as under: - , 1229 & 1230/Ahd/2025 (Assessment Years: 2015-16, 2016-17 & 2017-18) Waves Tradeline Private Limited vs. ITO Page 10 of 18
Assessment Year 2016-17 2017-18
Notice under Section 148 of the Act [Pre- 23.04.2021 23.04.2021 judgement dated 04.05.2022 rendered in the case of Union of India v. Ashish Agarwal]
Surviving period/days before expiry of 68 days 68 days limitation on 30.06.2021 [Number of days computed by following formula: 30.06.2021 less date on which initial notice under Section 148 was issued]
Notice under Section 148A(b) of the Act 25.05.2022 27.05.2022
Date on which reply was required to be filed 15.06.2022 17.06.2022 as per notice issued under Section 148A(b) of the Act
Date on which reply was filed by the 15.06.2022 17.06.2022 assessee in response to the notice under Section 148A(b) of the Act
Last date to issue notice under Section 22.08.2022 24.08.2022 148 of the Act after considering the surviving period [15.06.2022/17.06.2000 + 68 days]
Order under Section 148A(d) of the Act 26.08.2022 26.08.2022 passed on Notice under Section 148 of the Act issued 27.08.2022 27.08.2022 on Applicability of Rajiv Bansal judgement Yes. Barred by Yes. Barred by (Yes/No) Time Time Limitation Limitation 27.08.2022 , 1229 & 1230/Ahd/2025 (Assessment Years: 2015-16, 2016-17 & 2017-18) Waves Tradeline Private Limited vs. ITO Page 11 of 18 19. The contention of the assessee is that the Assessing Officer was required to pass order under Section 148A(d) of the Act and also issue notice under Section 148 of the Act within the surviving period of sixty- eight days of filing its reply on 15.06.2022 and 17.06.2022 for the A.Y. 2016-17 and A.Y. 2017-18 respectively. Thus, the Assessing Officer had time limit till 22.08.2022 and 24.08.2022 for the A.Y. 2016-17 and A.Y. 2017-18 respectively, to take these actions. However, for both the years, the order under Section 148A(d) of the Act was passed on 26.08.2022 and the notice under Section 148 of the Act was issued on 27.08.2022 i.e. beyond the period of sixty-eight days from its reply and thus the notices were barred by limitation.
The Hon’ble Supreme Court, in the case of Ashish Agarwal (supra), had directed that all the notices u/s 148 of the Act issued under the old provision shall be treated as show cause notice issued u/s 148A(b) of the Act of the new provisions. Further, the Hon’ble Court had directed the assessing officers to supply the assesses with the relevant material and information relied upon by the Revenue within thirty days from the date of the judgment. The effect of this direction was summarized by the Apex Court in the case of Rajeev Bansal [2024] 167 taxmann.com 70/301 Taxman 238/469 ITR 46 (SC) as under:
…..To summarize, the combined effect of the legal fiction and the directions issued by this Court in Ashish Agarwal (supra) is that the show cause notices that were deemed to have been issued during the period between 1 April 2021 and 30 June 2021 were stayed till the date of supply of the relevant information and material by the assessing officer to the assessee. After the supply of the relevant material and information to the assessee, time begins to run for the assesses to respond to the show cause notices. [Emphasis supplied.] , 1229 & 1230/Ahd/2025 (Assessment Years: 2015-16, 2016-17 & 2017-18) Waves Tradeline Private Limited vs. ITO Page 12 of 18 21. The interplay of the directions in the case of Ashish Agrawal with TOLA was examined by the Hon’ble Supreme Court in the case of Rajeev Bansal (supra). The Hon’ble Court had held that only the time surviving under the Income Tax Act read with TOLA will be available to the Revenue to complete the remaining proceedings in furtherance of such deemed notice, including issuance of notice u/s 148 of the new regime. The surviving or balance time limit was required to be calculated by computing the number of days between the date of issuance of deemed notice and 30th June, 2021. The reasoning and the relevant part of the judgement of the Court is as under:
The effect of the creation of the legal fiction in Ashish Agarwal (supra) was that it stopped the clock of limitation with effect from the date of issuance of Section 148 notices under the old regime [which is also the date of issuance of the deemed notices]. As discussed in the preceding segments of this judgment, the period from the date of the issuance of the deemed notices till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra) has to be excluded from the computation of the period of limitation. Moreover, the period of two weeks granted to the assesses to reply to the show cause notices must also be excluded in terms of the third proviso to Section 149.
The clock started ticking for the Revenue only after it received the response of the assesses to the show causes notices. After the receipt of the reply, the assessing officer had to perform the following responsibilities: (i) consider the reply of the assessee under Section 149A(c); (ii) take a decision under Section 149A(d) based on the available material and the reply of the assessee; and (iii) issue a notice under Section 148 if it was a fit case for reassessment. Once the clock started ticking, the assessing officer was required to complete these procedures within the surviving time limit. The surviving time limit, as prescribed under the Income Tax Act read with TOLA, was available to the assessing officers to issue the reassessment notices under Section 148 of the new regime.
Let us take the instance of a notice issued on 1 May 2021 under the old regime for a relevant assessment year. Because of the legal fiction, the deemed show cause notices will also come into effect from 1 May 2021. After accounting for all the exclusions, the assessing officer will have sixty-one days [days between 1 May 2021 and 30 June , 1229 & 1230/Ahd/2025 (Assessment Years: 2015-16, 2016-17 & 2017-18) Waves Tradeline Private Limited vs. ITO Page 13 of 18 2021] to issue a notice under Section 148 of the new regime. This time starts ticking for the assessing officer after receiving the response of the assessee. In this instance, if the assessee submits the response on 18 June 2022, the assessing officer will have sixty-one days from 18 June 2022 to issue a reassessment notice under Section 148 of the new regime. Thus, in this illustration, the time limit for issuance of a notice under Section 148 of the new regime will end on 18 August 2022.
In Ashish Agarwal (supra), this Court allowed the assesses to avail all the defences, including the defence of expiry of the time limit specified under Section 149(1). In the instant appeals, the reassessment notices pertain to the assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018. To assume jurisdiction to issue notices under Section 148 with respect to the relevant assessment years, an assessing officer has to: (i) issue the notices within the period prescribed under Section 149(1) of the new regime read with TOLA; and (ii) obtain the previous approval of the authority specified under Section 151. A notice issued without complying with the preconditions is invalid as it affects the jurisdiction of the assessing officer. Therefore, the reassessment notices issued under Section 148 of the new regime, which are in pursuance of the deemed notices, ought to be issued within the time limit surviving under the Income Tax Act read with TOLA. A reassessment notice issued beyond the surviving time limit will be time-barred. [Emphasis supplied.]
The Hon’ble Supreme Court had thus categorically held that the assessing officers were required to issue the reassessment notice under Section 148 of the new regime within the time limit surviving under the Income Tax Act read with TOLA and that all notices issued beyond the surviving period were time barred and liable to be set aside. This time-line was also demonstrated in para 112 of the order with an illustration. The Apex Court had held (in para-110) that the period from the date of the issuance of the deemed notices till the supply of relevant information and material by the assessing officers to the assesses was to be excluded from the computation of the period of limitation. Further, the period of two weeks granted to the assesses to reply to the show cause notice was also be excluded in terms of the third proviso to Section 149. Thus, what was mandated to be excluded was only a period of two , 1229 & 1230/Ahd/2025 (Assessment Years: 2015-16, 2016-17 & 2017-18) Waves Tradeline Private Limited vs. ITO Page 14 of 18 weeks allowed to the assessee to reply to the show cause notice. There is no stipulation in the direction that if the assessee takes more than two weeks to respond to the show cause notice, then that additional time period will also be excluded for computation of period of limitation.
In the present case, the original notice u/s 148 of the Act was issued on 23.04.2021 which was treated as deemed notice u/s 148A(b) of the Act. Since this notice was issued on 23.04.2021, the surviving time period available to the Assessing Officer to complete the further proceedings, including the issue of notice u/s 148 of the Act, was sixty-eight days only. Accordingly, the Assessing Officer was required to pass the order a u/s 148A(d) of the Act and also to issue notice u/s 148 of the Act in this case within a period of sixty-eight days from the period of two weeks granted to the assessee to reply to the show cause notice. The assessee had filed its reply on the due date (last day of two-week period allowed) i.e. on 15.06.2022 and 17.06.2022 for the A.Y. 2016-17 and A.Y. 2017-18 respectively. Therefore, the time limit available to the Assessing Officer to issue the notice u/s 148 of the Act was till 22.08.2022 and 24.08.022 only for the A.Y. 2016-17 and A.Y. 2017-18 respectively. As the notices u/s 148 of the Act, in the present case, were issued for both the years on 27.08.2022, the same are found to be beyond the limitation period. In view of the explicit direction of the Hon’ble Supreme Court to complete the remaining proceedings within the surviving or balance time period, the provision of section 148A(d) of the Act was overridden to that effect.
, 1229 & 1230/Ahd/2025 (Assessment Years: 2015-16, 2016-17 & 2017-18) Waves Tradeline Private Limited vs. ITO Page 15 of 18 24. The Hon’ble Supreme Court in the case of Rajeev Bansal (supra) had examined the scope of Article 142 and observed as under:
Article 142 empowers this Court to pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it. The discretionary jurisdiction exercised by this Court under Article 142 is of the widest amplitude. The Constitution has left it to the judicial discretion of this Court to decide the scope and limits of its jurisdiction to render substantial justice in matters coming before it. The expression “any cause or matter” mentioned under Article 142 includes every kind of proceeding pending before this Court. Article 142 allows this Court to give precedence to equity over law, provided the exercise of the discretion is consistent with constitutional provisions and after due consideration of substantive provisions in statutory law.
The Hon’ble Court further held that the exercise of the jurisdiction under Article 142 is meant to supplement the existing legal framework to do complete justice between the parties. Further that in a given circumstance, the Apex Court can supplement a legal framework to craft a just outcome when strict adherence to a source of law and exclusive rule-based theories creates inequitable results. Therefore, the law as declared by the Supreme Court in the case of Rajeev Bansal (supra) overrides the provisions of section 148A(d) of the Act and the Revenue had surviving time period only to complete the remaining proceedings u/s 148A(d) of the Act and to issue notice u/s 148 of the Act as per new provisions.
It is found that identical issue was decided by the Hon’ble Gujarat High Court in the case of Dhanraj Govindram Kella [2025] 177 taxmann.com 194 (Gujarat). The findings given by the Hon’ble Court on this issue are reproduced below:
The alternative contention of the petitioner as to whether notices would be valid notice or invalid notice considering 'surviving time' between the date of the issuance of notices under TOLA and 30th June, 2021 or not is required to be considered and for that 1229 & 1230/Ahd/2025 (Assessment Years: 2015-16, 2016-17 & 2017-18) Waves Tradeline Private Limited vs. ITO Page 16 of 18 each matter has to be considered separately on the basis of the facts of case considering the date of issuance of notices under section 148 under TOLA by the Revenue and thereafter date of supplying information to the assessee and date of passing of order under section 148A(d) and date of issuance of notice under section 148 of the Act so as to consider whether issuance of notice under section 148 of the Act is within 'surviving time' as per the direction of Hon'ble Apex Court in case of Rajeev Bansal (supra) or not.
So far as Assessment Years 2013-2014 and 2014-2015 are concerned, the period of three years from the end of the assessment year would be over prior to 20.03.2020 and the period of six years would be over between 20.03.2020 and 30.06.2021. Therefore, the notices issued under section 148 of the Act under old regime between 01.04.2021 and 30.06.2021 as per TOLA, will be a valid notice if the notice under section 148 of the Act under new regime is issued within the period of 'surviving time' as per the directions issued by Hon'ble Apex Court in case of Rajeev Bansal (supra). For the Assessment Years 2016-2017 and 2017-2018 are concerned, the notice issued under section 148 of the Act under old regime between 01.04.2021 and 30.06.2021 under TOLA would be considered to be issued within three years from the end of the relevant assessment year as three years would complete within the period of 20.03.2020 and 30.06.2021.
Therefore, in facts of these petitions, following data is required to be considered to find out 'surviving time' to decide as to whether the impugned notices under section 148 of the Act issued under the new regime as per the decision of Hon'ble Apex Court in case of Ashish Agarwal (supra) would be valid notice or not in view of the decision of the Hon'ble Apex Court in case of Rajeev Bansal (supra): SCA NO AY Date of notice under No of days of Date of providing section 148 under surviving time information under TOLA available till section 148A(b) 30.06.2021 6387/2023 2013-2014 17.06.2021 13 26.05.2022 5688/2023 2014-2015 09.06.2021 21 23.05.2022 22260/2022 2016-2017 30.06.2021 1 23.05.2022 996/2023 2017-2018 30.06.2021 1 24.05.2022 SCA NO Due date of Date of reply:- Date of order Last date for issuance of notice filing reply under section under section 148 as per 148A(d) and surviving time:- notice under section 148:- 6387/2023 09.06.2022 04.06.2022 29.07.2022 22.06.2022 5688/2023 06.06.2022 - 27.07.2022 27.06.2022 22260/2022 07.06.2022 06.07.2022 30.07.2022 14.06.2022 996/2023 11.06.2022 10.06.2022 19.07.2022 18.06.2 Years: 2015-16, 2016-17 & 2017-18) Waves Tradeline Private Limited vs. ITO Page 17 of 18 68. It is apparent from the above details that impugned notice under section 148 of the Act is issued beyond the period of 'surviving time' as per the direction of Hon'ble Apex Court in case of Rajeev Bansal (supra)and therefore, such notices would be invalid notices.
The impugned notices issued under section 148 of the Act are accordingly quashed and set aside being invalid having been issued beyond the 'surviving time'. Accordingly, impugned orders passed under section 148A(d) of the Act would also not survive and are accordingly, quashed and set aside. Subsequent proceedings, if any, undertaken by the respondent would not survive and are also quashed and set aside.
The Hon’ble Court held that since the notices under section 148 were issued beyond period of 'surviving time' as per direction of Supreme Court in Union of India v. Rajeev Bansal (supra), such notices were invalid. Further, the surviving time period was upheld by the Hon’ble Jurisdictional Court from the due date of 15 days for filing of reply by the assessee and not from the actual date of reply filed by the assessee.
In view of the facts discussed above and the judgement of the Hon’ble Supreme Court as well as the jurisdictional High Court, the impugned notices dated 27.08.2022 issued u/s 148 of the Act for the A.Ys. 2016-17 and 2017-18 are held to be invalid as the same were issued beyond the surviving period as per the decision of Hon’ble Supreme Court in the case of Rajiv Bansal (supra). Accordingly, the proceedings initiated u/s 148 of the Act are quashed being time-barred. As a consequence, the impugned assessment orders for the A.Ys. 2016-17 and 2017-18 do not survive and the same are quashed and set aside. The legal ground taken by the assessee is allowed for both the years.
Since the legal ground taken by the assessee has been allowed, and the assessment orders have been consequently quashed and set , 1229 & 1230/Ahd/2025 (Assessment Years: 2015-16, 2016-17 & 2017-18) Waves Tradeline Private Limited vs. ITO Page 18 of 18 aside, the other grounds taken by the assessee have become infructuous. Accordingly, both the appeals of the assessee are allowed.
In the final result, all the appeals of the assessee are allowed.
Order pronounced in the open Court on this 24th December, 2025.