Income Tax Notice Dated 31 March but E-Mailed on 1 April is Invalid: HC

The current case, dated June 17, 2025, is an important judgment reinforcing procedural compliance under income tax laws. A reassessment order was passed by the Income Tax Department, the Gujarat High Court has cancelled the order on the reason that it was time-barred and not issued in accordance with legal procedures mandated by the Supreme Court.

The current case is titled as Saumil Avinash Baheti Vs. Income Tax Officer Ward 4(2)(3), Ahmedabad (R/Special Civil Application No. 3804 of 2022). The case was heard by a division bench comprising Justice Bhargav D. Karia and Justice Pranav Trivedi.

Background of Case

The issue arose from a notice dated March 31, 2021, issued under Section 148 of the Income Tax Act, 1961. The notice was regarding the reopening of the income tax assessment of the petitioner (Assessment year 2017-18).

In accordance with the petitioner, the notice was issued on March 31, 2021; however, it was received by the petitioner via email on April 1, 2021. This raised a significant question: Can a notice still be considered valid if it is sent even one day after the legal deadline?

Department’s Admission and Legal Gap

In a written reply, the income tax department confirmed that it actually served on April 1, 2021. Additionally, they accepted, no new notice was issued later under Section 148(b) of the Income Tax Act. This step was legally essential to be taken as per the Supreme Court’s landmark ruling in Union of India & Ors. vs. Ashish Agarwal [2022] 444 ITR 1 (SC). That ruling explained how reassessment notices should be managed if issued after the due date, i.e., March 31, 2021.

Additionally, the Central Board of Direct Taxes (CBDT) has issued an instruction no. 01/2022 dated May 11, 2022, which outlines that all such old notices must be treated as new notices under Section 148A(b), ensuring compliance with the revised law.

Since the department did not send a fresh notice as required, the entire reassessment process became legally invalid; it had no legal authority.

High Court’s Verdict

The High Court noticed that the notice was issued after the due date and that the required legal steps were not followed. Hence, the high court declared the notice invalid and had no legal authority. The court stated:

“In view of the above fact, admittedly, the notice dated 31.03.2021 is a time-barred notice and hence the same would be invalid and without jurisdiction, and only on this ground, the impugned notice is hereby quashed and set aside.”

Hence, the bench ruled in favour of the petitioner and completely allowed his request. They also said that no one has to pay legal costs to the other party.

What This Judgment Means

This decision clearly indicates that tax officers must strictly comply with the legal due dates and procedures, especially in reassessment cases, because important taxpayer rights are involved. It also indicates that the courts are serious about making sure tax rules are followed properly.

Individuals who have received similar reassessment notices issued around March 2021 might also get relief if those notices did not comply with the decision of the Supreme Court and the instructions of the CBDT.

For both lawyers and taxpayers, this judgment is a significant reminder that even being one day late or missing a required legal step can make the entire tax process invalid.