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Union of India & Ors. vs. Rajeev Bansal

Not available · 2024 INSC 754Decided 3 Oct 2024
Not available
Chief Justice Dr. Dhananjaya Y. Chandrachud · Justice J.B. Pardiwala · Justice Manoj Misra

Background

This batch of roughly 90 connected appeals concerned the interplay between the Income Tax Act's reassessment provisions (Sections 147-151), the COVID-era Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 ("TOLA"), and the Finance Act 2021, which overhauled the reassessment regime from 1 April 2021 with more taxpayer-protective safeguards. Tax authorities had issued a large number of reassessment notices between 1 April and 30 June 2021 under the old (pre-amendment) procedure, relying on TOLA's time extensions; the Supreme Court's earlier decision in Union of India v. Ashish Agarwal (2022) had deemed such notices to be show-cause notices under the new regime, but various High Courts (Allahabad, Gujarat, Bombay, Rajasthan, Orissa, Delhi, and others) gave conflicting rulings on how far TOLA could extend the deadlines and sanction requirements under the new law, prompting the Revenue's appeals to the Supreme Court.

Decision Breakdown

The Supreme Court held that TOLA continues to apply even after the Finance Act 2021 came into force, and it extends the time limits for issuing reassessment notices under Section 148, and for obtaining the required sanction under Section 151, wherever the original time limit would have expired between 20 March 2020 and 31 March 2021. It ruled that all roughly 90,000 reassessment notices covered by the Ashish Agarwal directions were issued within the surviving, TOLA-extended time limit and were therefore valid, and it laid down a detailed formula for computing the extended deadlines depending on whether the case fell under the old or new reassessment regime. Reassessment notices issued beyond this surviving period, however, were held to be time-barred and liable to be set aside. Consequently, the Revenue's appeals were allowed and the High Court judgments that had taken a more restrictive view of TOLA's effect were set aside to the extent inconsistent with this ruling.

Lesson Learnt

Emergency relaxation laws like TOLA can operate alongside a later general amendment to extend statutory deadlines, but only within a carefully computed surviving time window: reassessment notices issued after that window closes remain invalid regardless of the pandemic-era relaxation.

Official source (sci.gov.in)View Judgment (PDF)

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