Notice under Section 148 of the Income Tax Act deemed invalid due to violation of Supreme Court guidelines on 'surviving time'.
In a significant ruling, the Gujarat High Court has quashed a notice issued under Section 148 of the Income Tax Act, 1961, deeming it invalid as it was issued beyond the permissible time limit set by the Supreme Court. The judgment, delivered by a division bench comprising Justices A.S. Supehia and Pranav Trivedi, addressed the petition filed by Ashaben Chandrakant Ashar against the Income Tax Officer, Ward 1.
The case revolved around a notice dated June 30, 2022, issued for the Assessment Year 2017-18. The petitioner contended that the notice was time-barred and violated the 'surviving time' provision as outlined in the Supreme Court's decisions in Union of India v. Ashish Agarwal and Union of India v. Rajeev Bansal. These landmark judgments had clarified the validity of notices issued under Section 148 during the transition period under the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (TOLA).
The Gujarat High Court meticulously examined the timeline of events, noting that the notice was issued after the permissible deadline of June 18, 2022. The court emphasized that any notice issued beyond this 'surviving time' is invalid, reaffirming the guidelines set by the Supreme Court. The court further quashed all consequential orders and proceedings based on the invalid notice under Section 148A(d).
This decision underscores the importance of adhering to the procedural timelines set by the Supreme Court and provides clarity on the interpretation of notices under the Income Tax Act during the transition period. The ruling not only quashes the notice in question but also sets a precedent for similar cases, reinforcing the principle of legal certainty and fairness in tax assessments.
Bottom Line:
Income Tax - Notice under Section 148 of the Income Tax Act, 1961 - Notices issued beyond the 'surviving time' as per the directions of the Supreme Court in Union of India v. Ashish Agarwal and Union of India v. Rajeev Bansal are invalid and liable to be quashed.
Statutory provision(s): Income Tax Act, 1961 Section 148, Income Tax Act, 1961 Section 148A(d), Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020, Article 226 of the Constitution of India
Ashaben Chandrakant Ashar v. Income Tax Officer, Ward 1, (Gujarat)(DB) : Law Finder Doc id # 2843576
