Section 148 Notices and the ‘Surviving Period’: What Rajeev Bansal Means for Reassessment
Aug 09, 2026 | 06:09 PM
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Why the “surviving period” matters in reassessment
The limitation rules for income-tax reassessment became unusually complex during the transition from the pre-Finance Act, 2021 regime to the substituted framework governing sections 147 to 151. The Supreme Court’s decisions in Union of India v. Ashish Agarwal (2022 INSC 510) and Union of India v. Rajeev Bansal (2024 INSC 754) provide the controlling framework for dealing with notices originally issued under the old section 148 between 1 April 2021 and 30 June 2021.
The practical point is important: a high alleged amount of escaped income does not, by itself, cure a notice issued after the legally available time has expired. For transitional notices, tax professionals must reconstruct the chronology and calculate the period that actually survived after applying the Income-tax Act, the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA), and the directions issued by the Supreme Court.
How Ashish Agarwal reshaped the transitional notices
In Ashish Agarwal, the Supreme Court addressed reassessment notices that had been issued under the unamended section 148 after the substituted reassessment regime came into force. To balance the interests of the Revenue and assessees, the Court treated those old-regime notices as show-cause notices under section 148A(b) of the substituted law.
The Court also directed Assessing Officers to provide the information and material relied upon within thirty days of the judgment dated 4 May 2022. The affected assessees were allowed two weeks thereafter to respond. The judgment did not give the Revenue an unrestricted fresh limitation period; it created a procedural bridge so that the notices could be tested under the substituted provisions and the statutory defences available to the assessee.
What the Supreme Court clarified in Rajeev Bansal
Rajeev Bansal examined how the legal fiction created in Ashish Agarwal interacted with TOLA and the limitation provisions. The Supreme Court held that the deemed show-cause notices were effectively stayed from the date of their original issuance until the Assessing Officer supplied the relevant information and material. The two-week response period allowed to the assessee was also to be excluded while computing limitation.
After making the permitted exclusions, however, the Assessing Officer still had to complete the procedure under section 148A and issue the new-regime notice under section 148 within the time that remained available. The Court described this as the “surviving time limit” and expressly concluded that a reassessment notice issued beyond that surviving period would be time-barred.
A timeline-based test, not a headline-based test
The validity exercise is necessarily fact-specific. A defensible review should begin with a date chart covering at least the following events:
- the end of the relevant assessment year and the limitation applicable under the pre-Finance Act, 2021 law;
- the date of the original notice issued under the old section 148 between 1 April and 30 June 2021;
- the date on which the Assessing Officer supplied the information and material in compliance with Ashish Agarwal;
- the period allowed, including any valid extension, for the assessee’s response;
- the date of the order under section 148A(d); and
- the date on which the substituted section 148 notice was issued.
The calculation must then apply the exclusions recognised by the Supreme Court without treating them as a wholesale revival of an otherwise expired limitation period. Section 149 remains central to this exercise. Its first proviso also protects assessment years beginning on or before 1 April 2021 where a notice could not have been issued at the relevant time because it was already outside the limitation prescribed under the earlier law.
Practical implications for CA and tax teams
When reviewing a transitional reassessment, professionals should preserve the complete electronic record rather than relying only on the date printed on the final notice. Portal communications, the date on which relied-upon material became available, the assessee’s response, extension requests and the section 148A(d) order may all affect the computation.
Three checks deserve particular attention:
- Identify the correct statutory version. The law has changed more than once. A current limitation table should not be applied mechanically to a notice governed by the transitional regime.
- Separate exclusion from extension. Time validly excluded under the Supreme Court’s framework changes the computation, but it does not automatically create an entirely new period for the Revenue.
- Raise jurisdictional objections precisely. If the calculation shows that the notice was late, the objection should set out each relevant date, the governing provision and the resulting last permissible date.
Amount involved does not replace limitation analysis
Section 149 uses monetary thresholds and specified forms of alleged escaped income in determining the outer window in relevant versions of the law. Those conditions must be examined, but they do not displace the first proviso or the transitional computation mandated by the Supreme Court. The correct approach is cumulative: determine whether the statutory conditions for the longer period are met, apply the protection for older assessment years, and then calculate the surviving period after permissible exclusions.
Key takeaway
Rajeev Bansal confirms that the Ashish Agarwal directions preserved a lawful route for processing specified transitional notices, but did not remove limitation as a jurisdictional safeguard. Every such matter turns on a disciplined reconstruction of the timeline. A notice issued after the surviving period is not saved merely because the reassessment involves a substantial amount or because preliminary steps under section 148A were undertaken.
Author: CA Samaaj
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