The Income Tax Appellate Tribunal, Surat Bench, has quashed reassessment proceedings initiated against an individual assessee for Assessment Year 2015-16, holding that the notice issued under Section 148 on 21.06.2021 and the consequential notice on 21.05.2022 were barred by limitation. The Tribunal followed the Supreme Court's decision in Union of India v. Rajeev Bansal and Deepak Steel and Power Ltd., which held that notices issued on or after 01.04.2021 for AY 2015-16 are invalid under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. The appeal was allowed, and the reassessment order was set aside.
Background & Facts
The Dispute
The assessee, an individual, filed her income tax return for Assessment Year (AY) 2015-16 declaring a total income of Rs. 14,840. Subsequently, the Assessing Officer (AO) issued a notice under Section 148 on 21.06.2021 to reopen the assessment, alleging that capital gains from the sale of immovable property had escaped assessment. The AO relied on the extended time limit under The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA).
Key Facts
- The assessee filed her return of income for AY 2015-16 declaring Rs. 14,840.
- The AO issued an initial notice under Section 148 on 21.06.2021 to reopen the assessment.
- Due to changes in the re-assessment procedure effective from 01.04.2021, the AO issued a fresh notice under Section 148 on 21.05.2022 after complying with Section 148A(d).
- The AO passed a re-assessment order on 24.04.2023, enhancing the total income to Rs. 44,63,090 and making an addition of Rs. 44,48,250.
- The assessee filed an appeal before the Commissioner of Income-Tax (Appeals)-National Faceless Appeal Centre, Delhi (CIT(A)), which was dismissed on 25.10.2025.
Procedural History
- 21.06.2021: Initial notice under Section 148 issued by the AO.
- 21.05.2022: Fresh notice under Section 148 issued after complying with Section 148A(d).
- 24.04.2023: Re-assessment order passed by the AO enhancing total income to Rs. 44,63,090.
- 25.10.2025: Order passed by CIT(A) dismissing the assessee's appeal.
- 09.07.2026: Hearing before the ITAT, Surat Bench.
- 16.07.2026: Order pronounced by the ITAT, Surat Bench.
Relief Sought
The assessee challenged the validity of the reassessment proceedings on the ground that the notice issued under Section 148 was barred by limitation. The assessee sought quashing of the reassessment order dated 24.04.2023 and the consequential order of the CIT(A) dated 25.10.2025.
The Legal Issue
The central question was whether notices issued under Section 148 on or after 01.04.2021 for Assessment Year 2015-16 are valid and within the limitation period prescribed under Section 149 of the Income Tax Act, 1961.
Arguments Presented
For the Appellant/Petitioner
The assessee relied on the Supreme Court's decision in Union of India v. Rajeev Bansal (2024) 469 ITR 46 (SC), which held that notices issued on or after 01.04.2021 for AY 2015-16 are invalid as they do not fall within the period prescribed under TOLA. The assessee also cited subsequent judgments of the Gujarat High Court in Mayurkumar Babubhai Patel v. Assistant Commissioner of Income-Tax (2025) 176 taxmann.com 25 (Gujarat) and Sorathia Mahesh Veljibhai HUF v. Income-Tax Officer (2025) 179 taxmann.com 54 (Gujarat), which followed Rajeev Bansal and held that such notices are barred by limitation.
For the Respondent/State
The Revenue did not contest the issue, as the Supreme Court in Rajeev Bansal had recorded the Revenue's concession that notices issued on or after 01.04.2021 for AY 2015-16 are liable to be dropped. The Revenue relied on this concession and did not advance further arguments against the assessee's contentions.
The Court's Analysis
The ITAT, Surat Bench, examined the issue of the validity of the reassessment notice issued under Section 148 for AY 2015-16. The Tribunal noted that the Supreme Court in Rajeev Bansal had recorded the Revenue's concession in para 19(f) that all notices issued on or after 01.04.2021 for AY 2015-16 are liable to be dropped as they do not fall within the period prescribed under TOLA.
The Tribunal also referred to the Supreme Court's decision in Deepak Steel and Power Ltd. v. Central Board of Direct Taxes (2025) 174 taxmann.com 144/305 Taxman 169/476 ITR 369 (SC), which followed Rajeev Bansal and quashed notices issued after 01.04.2021 for AY 2015-16. The Tribunal observed that the Gujarat High Court in Mayurkumar Babubhai Patel and Sorathia Mahesh Veljibhai HUF had also followed Rajeev Bansal and held that notices issued after 01.04.2021 for AY 2015-16 are barred by limitation.
The Tribunal noted that in the present case, the initial notice under Section 148 was issued on 21.06.2021 and the consequential notice was issued on 21.05.2022. The Tribunal held that these notices were issued after 01.04.2021 and were therefore barred by limitation. The Tribunal observed:
"Thus, we find that the issue is no longer res integra. The Hon'ble Supreme Court in Rajeev Bansal (supra) has recorded the Revenue's concession in para 19(f) that all notices issued on or after 01.04.2021 for AY 2015-16 are liable to be dropped. Further, the Hon'ble Gujarat High Court in Mayurkumar Babubhai Patel (supra) and Sorathia Mahesh Veljibhai HUF (supra), following Rajeev Bansal and Deepak Steel & Power Ltd., has held that notices issued after 01.04.2021 for AY 2015-16 are barred by limitation. Admittedly, in the present case, the original notice u/s 148 was issued on 21.06.2021 and the consequential notice after the decision in Ashish Agarwal was issued on 21.05.2022. Therefore, respectfully following the aforesaid binding precedents, we hold that the impugned re-assessment proceedings are barred by limitation and without jurisdiction."
The Tribunal concluded that the reassessment proceedings were barred by limitation and without jurisdiction, and accordingly quashed the reassessment order.
The Verdict
The ITAT, Surat Bench, allowed the assessee's appeal. The Tribunal held that the reassessment proceedings initiated against the assessee for AY 2015-16 were barred by limitation as the notices issued under Section 148 on 21.06.2021 and 21.05.2022 were issued after 01.04.2021 and did not fall within the period prescribed under TOLA. The Tribunal quashed the reassessment order dated 24.04.2023 and set aside the order of the CIT(A) dated 25.10.2025. The appeal was allowed, and the matter was disposed of accordingly.
What This Means For Similar Cases
Reassessment Notices Issued After 01.04.2021 for AY 2015-16 Are Void
Practitioners must note that reassessment notices issued under Section 148 on or after 01.04.2021 for AY 2015-16 are invalid and liable to be quashed. This principle has been affirmed by the Supreme Court in Rajeev Bansal and Deepak Steel and Power Ltd., and followed by multiple High Courts, including the Gujarat High Court.
- Actionable Takeaway: Challenge any reassessment notice issued after 01.04.2021 for AY 2015-16 on the ground of limitation.
Revenue's Concession in Rajeev Bansal Is Binding
The Supreme Court's decision in Rajeev Bansal recorded the Revenue's concession that notices issued on or after 01.04.2021 for AY 2015-16 are liable to be dropped. This concession is binding on all authorities and courts.
- Actionable Takeaway: Cite Rajeev Bansal to challenge reassessment notices issued after 01.04.2021 for AY 2015-16.
Strict Adherence to Limitation Periods in Reassessment Proceedings
The decision underscores the importance of strict adherence to limitation periods in reassessment proceedings. Notices issued outside the prescribed period are liable to be quashed, and reassessment orders based on such notices are invalid.
- Actionable Takeaway: Ensure that reassessment notices are issued within the prescribed limitation period to avoid invalidation of proceedings.
