Gujarat HC Quashes AY 2015-16 Reassessment Notice: Confirms SC’s Stand that All Such Notices Post 01.04.2021 Are Invalid

Gujarat HC Quashes AY 2015-16 Reassessment Notice: Confirms SC’s Stand that All Such Notices Post 01.04.2021 Are Invalid

The Gujarat High Court in one of its recent rulings upheld Supreme Court rulings and quashed a reassessment notice issued under Section 148 of the Income Tax Act for Assessment Year 2015-16, calling it invalid.

The Petitioner, a proprietor of M/s Kapadia Brothers, received a notice dated 04.06.2021 under Section 148 for AY 2015-16 from the income tax department during the extended time permitted under the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance (TOLA) 2020. Later, another notice was issued in July 2022 and August 2022 after the ruling held in case of Union of India and others v. Ashish Agarwal.

The Petitioner challenged these notices before the Gujarat High Court, saying that for AY 2015-16, the three-year limitation period would end on 31.03.2019, which is before TOLA even came into effect, and the six-year limit ended on 31.03.2022, which is after the operation of TOLA.

The Bench comprising Mr Justice Bhargav D. Karia and Mr Justice Pranav Trivedi observed several rulings that had already held that all such notices for AY 2015-16 issued on or after 01.04.2021 are invalid. The Court also noted that in the case of Union of India and Ors. v. Rajeev Bansal, the Revenue had agreed that for AY 2015-16, all notices issued after April 1, 2021 will have to be dropped as they no longer meet the time period specified under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.

Since the notice issued under section 148 was issued during the extended period from 01.04.2021 to 30.06.2021 under TOLA, the Court quashed the same, calling it invalid.