The statutory limits of tax reassessments have long been a battleground in Indian tax jurisprudence. In a highly anticipated ruling, the Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has delivered a decisive blow to legacy reassessment proceedings for Assessment Year (AY) 2015-16. Decided on August 3, 2026, in Archit Nandkumar Kotwal v. Income Tax Officer – 22(1)(6), Mumbai (ITA 2539/MUM/2026), the tribunal reaffirmed that even the expansive relief provisions under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) cannot resurrect notices issued outside the statutory six-year window.
A Procedural Tug-of-War
The dispute stems from a long, winding procedural history that mirrors the broader systemic transition from India’s old reassessment regime to the new framework introduced by the Finance Act, 2021.
Initially, the Revenue issued a notice under the old Section 148 of the Income Tax Act on April 5, 2021. However, following the landmark Supreme Court decision in Union of India v. Ashish Agarwal, this notice was legally deemed to be a mere show-cause notice under Section 148A(b) of the new regime. In compliance, the Revenue issued a fresh notice on March 23, 2022, followed by an order under Section 148A(d) on April 5, 2022. On that very same day—April 5, 2022—the Revenue issued the final Section 148 notice to reopen the assessment.
The core conflict rested on a straightforward, yet critical, calculation of time. The assessee argued that the statutory six-year limitation period for AY 2015-16 expired on March 31, 2022. Because the final Section 148 notice was dated April 5, 2022, it was issued five days too late and was therefore entirely barred by limitation.
The Battle of Representation
During the hearing before the ITAT’s SMC Bench—consisting of Hon’ble Shri Pawan Singh (Judicial Member) and Hon’ble Shri Girish Agrawal (Accountant Member)—both sides fielded experienced representatives to argue the jurisdiction of the tax authority.
- For the Assessee: Shri Ankush Karanpuria, CA, contested the validity of the notice, arguing that the jurisdictional foundation of the assessment was fundamentally broken due to the time-bar.
- For the Revenue: Shri Aditya M. Rai, Sr. DR, defended the Revenue’s actions, relying on the protective umbrella of TOLA to justify the delayed issuance.
Ultimately, the Bench sided with the taxpayer, recognizing that jurisdictional boundaries are absolute.
The Pivotal SC Precedent in Rajeev Bansal
The turning point in the tribunal’s analysis was the landmark Supreme Court ruling in Union of India v. Rajeev Bansal (October 3, 2024). The Apex Court had thoroughly mapped out the intersection of TOLA and the new reassessment regime.
Most significantly, during those Supreme Court proceedings, the Additional Solicitor General of India, Mr. N. Venkataraman, made a critical concession on behalf of the Revenue. Under paragraph 19(f) of the Rajeev Bansal judgment, the ASG conceded that for AY 2015-16, all notices issued on or after April 1, 2021, would have to be dropped because they did not fall for completion within the relaxation period prescribed under TOLA.
The ITAT Mumbai Bench noted that this concession effectively shut the door on the Revenue’s attempts to salvage reassessments for AY 2015-16 where notices were issued after March 31, 2022.
Reinforcing the Six-Year Cliff: IBIBO Group and Nehal Ashit Shah
To solidify its position, the ITAT drew upon subsequent jurisprudence that has consistently enforced this boundary:
- IBIBO Group Pvt. Ltd. v. ACIT (Delhi High Court, December 13, 2024): The High Court quashed a Section 148 notice and a Section 148A(d) order dated July 23, 2022, for AY 2015-16, ruling them unsustainable by applying the Rajeev Bansal precedent.
- ACIT v. Nehal Ashit Shah (Supreme Court, April 4, 2025): The Supreme Court dismissed the Revenue’s Special Leave Petition (SLP), referencing the ASG’s concession in Rajeev Bansal and reinforcing that AY 2015-16 notices issued after the limitation period simply cannot survive judicial scrutiny.
With the six-year limitation period for Archit Nandkumar Kotwal having expired on March 31, 2022, the April 5, 2022 notice was declared bad in law and quashed.
The Jurisdictional Knockout: Financial Disputes Rendered Academic
By quashing the reassessment at its jurisdictional roots, the ITAT avoided having to untangle a web of substantial financial and technical disputes. These secondary grievances, which became entirely academic, included:
- Salary Computation Discrepancy: The Assessing Officer (AO) had computed the taxpayer’s salary income at ₹34,97,563 in the final computation sheet, despite accepting the lower figure of ₹33,07,775 in the body of the assessment order itself.
- Withheld TDS Credit: The AO failed to grant a substantial Tax Deducted at Source (TDS) credit of ₹7,22,815.
- Self-Assessment Tax Credit: The AO completely overlooked a self-assessment tax payment of ₹11,280.
- Substantial Interest Levies: The taxpayer had contested steep interest levies under Section 234A (₹8,03,454) and Section 234B (₹8,50,716).
Because the very foundation of the reassessment was declared invalid, the ITAT allowed the taxpayer’s legal appeal on Ground No. 1, rendering all financial disputes academic and resulting in a total victory for the assessee.