RAJPATBHAI RAMSANSUKH DUBE vs INCOME TAX OFFICER WARD 3(2)(1)
- Court
- Gujarat High Court
C/SCA/6304/2026 (GJHC240312462026) JUDGMENT DATED: 24/08/2026
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 6304 of 2026
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
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Approved for Reporting Yes No
✔
===================================================
RAJPATBHAI RAMSANSUKH DUBE
Versus
INCOME TAX OFFICER WARD 3(2)(1)
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Appearance:
MR DARSHAN B GANDHI(9771) for the Petitioner(s) No. 1
MR AADITYA D BHATT(8580) for the Respondent(s) No. 1
===================================================
CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
Date : 24/08/2026
ORAL JUDGMENT
(PER : HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI)
1. With the consent of the learned advocates appearing for the
respective parties, the matter is taken up for final hearing.
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2. Heard Mr.Darshan B. Gandhi, the learned advocate appearing
for the petitioner and Mr.Aaditya Bhatt, the learned Senior
Standing Counsel appearing for the respondent- Revenue.
3. By way of present petition, the petitioner herein has invoked
Article 226 of the Constitution of India, being aggrieved and
dissatisfied by the issuance of the impugned show-cause notices
and order as referred to herein-below:
i. Impugned show cause notice issued under Section 148A(1) of
the Income Tax Act, 1961 (for short the IT Act, 1961) for the
Assessment Year (for short ‘AY’) 2021-22 on 31.03.2025;
ii. The impugned order passed under the Section 148A(3) of the
IT Act, 1961, for the AY 2021-22 on 25.06.2025;
iii. The impugned Notice issued under Section 148 of the IT Act,
1961 dated 25.06.2025 for the AY 2021-2022.
4. The aforesaid has given rise to the filing of the present
petition, for reliefs as referred to hereinbelow:
“10. In the premises aforesaid, the petitioner most humbly and
respectfully prays that:-
PRAYERS:
A. YOUR LORDSHIP may be pleased to issue a writ of certiorari
or writ in the nature of certiorari or any other appropriate writ
order quashing and setting aside the impugned Show Cause
Notice passed under Section 148A(1) dated 31.03.2025
(Annexure -A-Page no. 15), the impugned order passed under
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section 148A(3) dated 25.06.2025 (Annexure -F -Page no. 33-40)
and notice issued under section 148 of the Income Tax Act,
1961 on 25.06.2025 for the Asst. Year 2021-22 at(Annexure-G -
Page no. 41);
xxx.”
5. Briefly stated, the petitioner herein is a salaried person and
filing return under ITR (Income Tax Return) Form-I. For AY
2021-2022, the petitioner filed the return of income under
Section 139(1) of the IT Act, 1961 on 27.12.2021 declaring total
income of Rs.8,87,790/-, which was processed under Section
143(1) of the IT Act, 1961 on 15.03.2022.
6. The impugned show cause notice dated 31.03.2025 under
Section 148A(1) of the IT Act, 1961 issued by the respondent
herein is based on information from Insight portal and a search
action conducted on 07.09.2022 on a third party. Consequently,
the deduction of Rs.11,85,000/- claimed by the petitioner was
characterized as escapement of income.
7. The petitioner herein filed detailed submissions on 14.04.2025
raising jurisdictional objections stating that for AY 2021-2022, the
three years limitation period expired on 31.03.2025, since the
alleged escaped income is less than Rs.50 lakhs. Subsequently,
following a change of incumbent office, the respondent issued a
letter on 05.06.2025 providing a final opportunity of hearing and
requesting a reply on 08.06.2025. In compliance thereof, the
petitioner filed updated submissions on 06.06.2025 reiterating the
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legal objections regarding limitation period and quantum of the
alleged assessment. Disregarding the petitioner's objections,
applicability and validity of the entire proceedings commenced
under Section 148A of the IT Act, 1961 and Notice under Section
148 of the IT Act, 1961 was objected due to falling under the
condition provided under Section 152(3) of the IT Act, 1961, the
respondent officer passed an order under Section 148A(3) of the
IT Act, 1961 on 25.06.2025 concluding that this is a "fit case"
for reopening the assessment. On even date, the respondent
issued the impugned Notice under Section 148 of the IT Act,
1961 requiring the petitioner to file a return of income within 90
days. Thereafter, certain Notices were issued over the portal, and
the same could not be responded, as the petitioner was in Dubai
for a longer period.
8. Being aggrieved by the aforesaid, the petitioner herein has
preferred the present petition having prayed for the reliefs as
referred to herein-above.
9. Mr.Darshan Gandhi, the learned advocate appearing for the
applicant, at the outset submitted that the impugned Notice
under Section 148 of the IT Act, 1961 dated 25.06.2025 is time
barred. For AY 2021-2022, the statutory three years limitation
period under Section 149(1)(a) of the IT Act, 1961 expired on
31.03.2025. The respondent could have assumed jurisdiction
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under Section 149(1)(b) of the IT Act, 1961 only if the escaped
income was Rs.50 lakhs or more. It is submitted that, admittedly,
the alleged escapement in the facts of the present case is only
Rs.11,85,000/-, and in view thereof, the mandatory threshold of
ten years extended window is not available to the respondent
herein. The impugned notice in view thereof is clearly violative
of the statutory bar.
10. It is further submitted that the proceedings are invalid, in
view of the provision of Section 152(3) of the IT Act, 1961 which
mandates that, where a search is initiated under Section 132 of
the IT Act, 1961 on or after 01.04.2021 but before 01.09.2024,
the provision of Section 147 to 151 of the IT Act, 1961 shall
apply as they stood immediately before the commencement of the
Finance (No. 2) Act, 2024. It is submitted that in the present
case, admittedly, the search on third party (Apna Desh Party)
was conducted on 07.09.2022. Consequently, show cause notice
should have been issued under Section 148A(b) of the previous IT
Act, 1961 and other than Section 148A(1) of the IT Act, 1961,
rendering the initiation of the proceedings void ab initio.
11. Placing reliance on the aforesaid submissions, it is submitted
that on the aforesaid ground alone, the present petition is
required to be allowed. The issue in question is no longer res
integra, the same having been considered in Special Civil
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Application No.15105 of 2025, wherein, by judgment dated
15.06.2026, the writ petition was allowed.
12. Mr.Aaditya Bhatt, the learned Senior Standing Counsel
submits that no interference is called for in the impugned show
cause notice issued by the respondent authority and the
consequential order and the subsequent notice issued under
Section 148 of the IT Act, 1961.
13. Having heard the learned counsels appearing for the
respective parties at length and considering the facts as referred
to herein-above, which are not in dispute, the following emerge:
A. The petitioner was issued the impugned show cause Notice
under Section 148 of the IT Act, 1961 on 25.06.2025 for AY
2021-2022 for a search action conducted on 07.09.2022 on a
third party, alleging deduction of Rs.11,85,000/- claimed by the
petitioner as escapement of income.
B. Undisputedly, the proceedings are initiated upon a search
conducted on third party as referred to herein-above. In view
thereof, the proceedings are invalid as the provision of Section
152(3) of the IT Act, 1961, which provides that where a search
has been initiated under Section 132 of the IT Act, 1961 or
requisition is made under Section 132A of the IT Act, 1961 or a
survey is conducted under Section 133A of the IT Act, 1961 on
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or after the first day of April, 2021, but before first day of
September, 2024, the provision of Section 147 to 151 of the IT
Act, 1961 shall apply as they stood immediately before the
commencement of the Finance (No.2) Act, 2024.
C. In the facts of the present case, the search was conducted on
07.09.2022, which falls within the above time frame. Thus, the
pre-amended provision of Section 147 to 151 of the IT Act, 1961
shall come into play.
D. The respondent was therefore required to initiate proceedings
by issuance of Notice under Section 148 of the IT Act, 1961 of
the old regime.
E. In the facts of the present case, three years from AY 2021-
2022 lapsed on 31.03.2025. The alleged escapement of income is
Rs.11,85,000/-, which is less than Rs.50 lakhs. In view thereof,
the extended period of ten years limitation is not available to the
respondent authority.
F. In view thereof, the initiation of the proceedings under Section
148A of the IT Act, 1961 itself is contrary to the statute. The
aforesaid issue is no longer res integra, as decided on 15.06.2026
by this Court in Special Civil Application No. 15105 of 2025. At
this stage, it is apposite to refer to Paragraphs- 9 to 12 of the
said judgment and order, which reads thus:
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“9. Keeping in mind the aforesaid dates, we may now
incorporate the provision of Section 152(3) of the Act, which
reads as under:
“Section 152(3)
Where a search has been initiated under section 132 or
requisition is made under section 132A or a survey is
conducted under section 133A [other than under sub-section
(2A)] on or after the 1st day of April, 2021 but before the
1st day of September, 2024, the provisions of section 147 to
151 shall apply as they stood immediately before the
commencement of the Finance (No. 2) Act, 2024.”
Thus, since the date of search falls within the period from the
01.04.2021 to the 01.09.2024, the provision of Sections 147 to
151 of the Act, as they stood prior to the Finance Act (No. 2),
2024, shall apply.
10. Section 149 (Old regime) of the Act reads thus:
"Time limit for notice.
149. (1) No notice under section 148 shall be issued for the
relevant assessment year, -
(a) if three years have elapsed from the end of the relevant
assessment year, unless the case falls under clause (b);
(b) if three years, but not more than ten years, have elapsed
from the end of the relevant assessment year unless the
Assessing Officer has in his possession books of account or
other documents or evidence which reveal that the income
chargeable to tax, represented in the form of-
(i) an asset,
(ii) expenditure in respect of a transaction or in relation to
an event or occasion, or
(iii) an entry or entries in the books of account, which has
escaped assessment amounts to or is likely to amount to fifty
lakh rupees or more:]
Provided that no notice under section 148 shall be issued at
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any time in a case for the relevant assessment year
beginning on or before 1st day of April, 2021, if a notice
under section 148 or section 153A or section 153C could not
have been issued at that time on account of being beyond
the time limit specified under the provisions of clause (b) of
sub-section (1) of this section or section 153A or section
153C, as the case may be, as they stood immediately before
the commencement of the Finance Act, 2021:
Provided further that the provisions of this sub-section shall
not apply in a case, where a notice under Section 153-A, or
Section 153-C read with Section 153-A, is required to be
issued in relation to a search initiated under Section 132 or
books of account, other documents or any assets
requisitioned under Section 132-A, on or before the 31st day
of March,2021."
11. In the present case, the provision of Section 149(1)(a) of the
Act, which prescribes a time limit of three years, will get
attracted, as the alleged escapement of income is below the
amount of Rs.50 lakh, which finds place in the provision of
Section 149(1)(b) of the Act. The relevant assessment year in
the present case is A.Y. 2021-22, and hence, as per the
provision of Section 149(1)(a) of the Act, the end of the
relevant assessment year would be 31.03.2022. However, the
impugned notice under Section 148 of the Act has been issued
on 23.05.2025 for A.Y. 2021-22, which is beyond the limitation
of three years, and hence, the reopening of the assessment runs
contrary to the provision of Section 149 of the Finance (No. 1)
Act, 2024, and hence is liable to be interfered with.
12. The contention raised before us by the Revenue, to the
extent that the Finance (No. 2) Act of 2024 will apply in the
present case, as there is no search conducted against the
petitioner, is misconceived, since the reopening of the
assessment against the petitioner is exclusively premised upon
the incriminating materials found during the search under
Section 132 of the Act. The provisions of Section 152(3) of the
Act are not limited for undertaking the reassessment against
searched person only, as projected before us by the Revenue,
and not against other person, who is not subjected to search.
The provision of Section 152(3) of the Act is applicable to all
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the assessee, where the reassessment proceedings are initiated,
‘on the basis’ or ‘as a consequence’ of a search conducted
between 01.04.2021 and 01.09.2025, and against whom
incriminating material is found. However, the re-opening of the
assessment is subject to limitations as provided under Section
149 of the Act. As mentioned herein-above the provision of
Section 132 of the Act finds place in the provision of Section
149 of the Act and hence, the reassessment, since it emanates
on the incriminating material found during the search at M/s.
DCW Ltd. group, connecting the present petitioner with such
material, the provision of Section 149 of the Finance (No.1) Act
prescribing limitation gets attracted. Thus, on this sole ground,
the writ-petition succeeds, and the impugned reopening of the
assessment order dated 19.05.2025 and the impugned notice
dated 23.05.2025 are hereby quashed and set aside. The writ-
petition stands allowed.”
14. The aforesaid judgment is squarely applicable in the facts of
the present case as discussed herein-above, and in view thereof,
the prayers as prayed for in the present petition are required to
be allowed and accordingly the impugned show cause Notice
dated 31.03.2025 under Section 148A(1) of the IT Act, 1961,
impugned order dated 25.06.2025 under Section 148A(3) of the
IT Act, 1961 and Notice dated 25.06.2025 under Section 148 of
the IT Act are hereby quashed and set aside.
The present Petition stands allowed accordingly.
Sd/-
(A. S. SUPEHIA, J)
Sd/-
(VAIBHAVI D. NANAVATI,J)
Pradhyuman/61/
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