Gujarat High Court Invalidates Time-Barred Section 148 Notice
- Mayur Bhadani
- 2 days ago
- 2 min read
Case: Babubhai Ganeshbhai Prajapati vs ITO
Date: 03 December 2025
Court: Gujarat High Court
Law Involved: Section 148, Section 148A, TOLA, Limitation
📌 What Was the Dispute?
The Income Tax Department issued a reassessment notice u/s 148 on 30.08.2022.
The assessee challenged it, arguing it was time-barred under the Supreme Court rulings:
Union of India vs Ashish Agarwal (2022)
Union of India vs Rajeev Bansal (2024)
These cases created a special framework to determine whether old 148 notices (issued under TOLA during COVID) are valid under the new law.
🧠 Important Timeline (Very Crucial!)
✔ Old 148 notice (TOLA) issued: 30.06.2021
✔ AO shared 148A(b) information: 27.05.2022
✔ Assessee reply period ended: 10.06.2022
✔ Fresh 148 notice issued: 30.08.2022
But according to Supreme Court, AO must issue 148 notice within the “surviving time” available as of 30.06.2021.
👉 In this case, the surviving time expired on 23.07.2022.
👉 The AO issued notice 38 days late.
⚖️ What Did the High Court Say?
1️⃣ Notice issued on 30.08.2022 = Time-Barred
Court held the AO had no power to issue a notice beyond the surviving time fixed by SC.
2️⃣ This violates the legal framework set by SC
The Court relied heavily on:
Ashish Agarwal (conversion of old 148 notices into 148A(b))
Rajeev Bansal (strict limitation timeline)
3️⃣ Entire proceedings fail
Since the initial notice is invalid:
❌ Section 148 notice quashed
❌ Order u/s 148A(d) quashed
❌ All consequential actions quashed
⭐ Why This Judgment Is Important
This ruling reinforces that:
The Department cannot extend limitation unlawfully.
Reassessment notices must strictly follow SC’s “surviving time” rule.
Even a delay of one day makes the entire reassessment invalid.
Assessees have a strong ground to challenge late 148 notices issued post-TOLA.
🧮Practical Learning for CAs, Tax Professionals & Taxpayers
If you receive a Section 148 notice post-2021:
Check original TOLA notice date
Calculate surviving time till 30.06.2021
Check when AO issued final 148 notice
If delay exists → the notice is automatically invalid
This case is a perfect example of how limitation rules protect taxpayers.
Download Court Copy here :
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